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Latino Families Targeted in Loan Modification Scam

Many families facing foreclosure assume that they cannot afford a real estate attorney. The fact remains that mistakes made during the foreclosure process often prove costlier than the price of retaining a lawyer. Recently, a number of Latino families in Southern California who needed loan modifications ended up losing their homes because they were targeted by an illegal family-run loan modification scam.

Three men and two women were charged with felonies, including grand theft, forgery, and conspiracy to commit a crime. According to a news report in The Orange County Register, the Irvine-based family accepted illegal upfront loan modification fees and home mortgage payments from homeowners and then deposited those fees into their own bank accounts. The Latino families who gave them money never received modifications on their home loans and many lost their homes to foreclosure.

This is a cautionary tale of why legal assistance is critical when dealing with loan modifications and foreclosures. An attorney who regularly handles loan modifications can help protect homeowners at a reasonable rate. In fact, legal fees and related foreclosure costs can be capitalized into the modified principal balance. So, the fees for an attorney can be incorporated into the modified loan.

A loan modification is ideal for a family who has fallen behind on payments but does not want to lose their home to foreclosure. During the mortgage modification process, the terms of the mortgage are adjusted. Typically, a loan modification will result in a change to the loan’s monthly payment, interest rate, and even the outstanding principal.

If your financial situation has changed and you are no longer able to make mortgage payments as previously scheduled, you may be eligible to receive a reduction in interest rate, reduced monthly payments, lengthening of the loan term, and a number of other beneficial modifications. The modifications made available are at the discretion of the lender. Ideally, your lender will want to adjust your loan to continue receiving payments.

If you are worried that you could lose your home, do not jump into a loan modification program without considering all of your options. There are a number of scam artists out there who will take advantage of your situation. You want to make sure that you and your home are protected. Please contact an experienced Irvine loan modification lawyer for more information.