Four Tips to Avoid Loan Modification Scams Offered by Loan Relief Services

Today, loan modifications are growing increasingly popular as more homeowners fall behind on their monthly mortgage payments. This increased popularity brings a growing number of scams by companies offering their loan modification assistance for a sizeable fee. So how do you avoid being the victim of loan modification fraud? Loan Relief Services shows you how.

Lake Forest, CA (PRWEB) May 4, 2009

Today, loan modifications are growing increasingly popular as more homeowners fall behind on their monthly mortgage payments. This increased popularity brings a growing number of scams by companies offering their loan modification assistance for a sizeable fee. Jason Lines, spokesman for Loan Relief Services, publisher of the do it yourself Loan Modification Guide and DYOLoanModification.com, today offered advice to help homeowners avoid loan modification frauds.

A loan modification is the process by which a lender agrees to modify the existing terms of a mortgage to more favorable terms, such as a loan term extension, a modification of the monthly payment amounts, or a revised interest rate. It is not a refinance, but rather, a modification of an existing loan.

According to recent news reports*, the FBI is currently investigating roughly 2,100 mortgage fraud cases, up 400 percent from five years ago. To help you avoid becoming a victim of mortgage fraud, Lines offers the following tips.

Tip #1: There are no loan modification guarantees.
"Each borrower's financial situation is unique and each lender has its own loan modification criteria, making it impossible for any company to guarantee a loan modification," says Lines. Successful loan modifications include knowing what paperwork to prepare and how to prepare it, understanding your credit and how to improve it, and presenting your case in terms that resonate with your lender. Even then, there is a chance - not a guarantee - that your loan will be modified.

Tip #2: Never pay a large amount of money up front.
Some loan modification companies ask anywhere from $2,000 to $5,000 in upfront fees - fees that may not obtain a successful loan modification. According to Lines, if you have $2,000 to $5,000, you're probably better off paying your mortgage. Instead, he suggests using a loan modification package to help you do your own loan modification, for a fraction of the price.    

Tip #3: Never sign over your title.
Legitimate loan advisors would never ask you to sign over the title to your home or ask you for power of attorney. "Signing over your home deed or granting this type of decision making power to a third party is rarely a good idea. You could end up losing your home to a scam artist."

Tip #4: Do not put money in an escrow account.
Lines says never put money into an escrow account on the advice of a third party, even if they tell you they'll make house payments on your behalf. If you have money for an escrow account, send it directly to your lender as a good faith payment. You'll be in better standing with your lender while avoiding the risk of fraud in the process.

For more loan modification tips and advice, or to purchase a Loan Modification Guide so you can modify your own home loan, visit http://www.DYOLoanModification.com/.

About Loan Relief Services
Loan Relief Services, publisher of the Do It Yourself Loan Modification Guide and DYOLoanModification.com, specializes in do-it-yourself loan modification tips and advice, to help homeowners modify their mortgages, on their own. The DYO Loan Modification Package is a do-it-yourself (DIY) loan modification kit consisting of a detailed guidebook, a DVD and a CD audio series with step-by-step instructions and dos and don'ts advice designed to increase your chances of a home loan modification.

This news release is for informational purposes only and is not a solicitation for loan modification services nor is it to be considered financial advice or recommendation. HughesNet

*"Government cracks down on mortgage scams," April 6, 2009, from the Associated Press as reported by MSNBC, http://www.msnbc.msn.com/id/30070197/.

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