From a reader: My husband and I were approached in May by a woman from a local real estate company. She offered to do our loan modification for our house and charged us a flat-rate fee of $1,200. I was a little apprehensive as it sounded too good to be true so I asked her to guarantee the modification. The woman sent us a guarantee that stated that within 30 days should our modification not go through we will get a full refund.
The company never did any modification or follow-up on our behalf. The only thing the company did was file the paperwork. When my husband and I inquired, another woman from the company stated that their company is not an authorized entity for loan modifications. At this point, we requested a full refund.
It has been more than three months and we are not getting any replies. What can we do now?
Action Line: When shopping for loan modifications, first check with cencal.bbb.org. Contact the U.S. Department of Housing and Urban Development at (888) 995-4673 for information and assistance to avoid foreclosure.
If you choose a loan modification company, contact the California Department of Real Estate to make sure the company is properly licensed.
Shop around, get some comparative bids. Be sure to check on the company BEFORE you give any personal information. And never pay any fees up front. If you need to file a complaint, go to bbb.org.
Many people just like you have been trying to modify their loans or refinance or sell. Here is some great information from HUD about loan modifications:
• Borrowers are permitted to receive a loan modification or FHA-HARP only once within a 24-month period.
• Lenders are to use specific financial analysis criteria when determining a borrower's eligibility for a modified loan. The lender may conduct any review it deems necessary to verify that the property has no physical conditions adversely impacting the borrower's continued ability to support the modified mortgage payment.
• The lender is expected to waive all accrued late fees.
• The lender should modify the interest rate to the current market rate. The lender must re-amortize the total unpaid amount due over a 360-month period from the due date of the first installment required under the modified mortgage.
Action Line is written by Blair Looney, president and CEO for the Better Business Bureau serving Central California. Send your consumer concerns, questions and problems to Action Line at the Better Business Bureau, 4201 W. Shaw Ave., Suite 107, Fresno, CA 93722 or firstname.lastname@example.org.