Beware of Advance Pay Scams - Loan Modification Help Available

Consumer information sheets detailing the various mortgage modification programs available through large lenders and government entities are now available through the website of the California Association of Realtors.

C.A.R. also has created an easy-to-use reference chart about available programs.

The consumer sheets contain information such as eligibility requirements, who to contact to apply, costs associated with the program, and other vital data. The sheets are available in an easy to use format enabling Realtors to print and e-mail them to clients.

The information is available on-line by going to www.CAR.org The information includes a compilation of programs offered by the larger lenders and government entities, such as: Hope for Homeowners, Countrywide Financial (Bank of America), Citigroup, CitiMortgage, JP Morgan Chase & Co., IndyMac Federal Bank, FDIC, and government-backed programs offered through Freddie Mac and Fannie Mae.

Consumers need to be wary of any loan modification service that charges an advance fee, which is illegal if a property is in foreclosure.

Charging an advance fee is permissible only if the loan is not in foreclosure AND the modification service has won approval in advance by the California Dept. of Real Estate.

If the company is not on the DRE's list of approved services, do not pay an advance fee.

While there are many legitimate services available to help with a loan modification, there also are many scam artists.

These phony services will tell a borrower that they can negotiate a deal with the lender if the borrower pays a fee first.

They tell the borrower not to contact their lender or credit counselor and to let the "negotiator" handle the details.

However, once they have the money, the crook takes off.

Or, worse yet, the scam artist has the owner sign documents that surrender the title to the house in exchange for a worthless or an expensive "rescue" loan.

Owners who are behind on their mortgage payments, may be contacted by individuals or companies that will offer to help work out a loan modification with the lender or provide other services to help the owner prevent a foreclosure.

Be especially cautious if the service requires advance payment of a fee.