Programs to modify loans – a false hope for many

Houston continues to struggle with increased home foreclosures and just as more people need help, it appears more scams are cropping up from companies promising foreclosure relief, but what the do is they make things worse.

Loan modification is very hard to obtain when you are having financial problems. Homeowners need lots of time and hard work to get it, so it’s not a surprise the appearance of companies that make false promises.

The Blanca Osollo’s case reflects exactly how scammers work. Her husband lost his job and so they fell behind on their mortgage payments. However, they were looking for help getting out of trouble, so they looked for a mortgage modification company and they find one, online.

Osollo recalls the first meanting: "The first thing they told me, not to talk to my lender and not to make any payments".

The Osollo’s payed the loan modification company $4,000 and the company explained it would get the home loan modified. Six month later, they got a foreclosure notice, what they showed to the company. They replied: "There is nothing they can do anyway". Finally the Osollo’s found that the company didn’t make any payment to their lender and the loan was never modified.

What happened to this family is happening across the country. One powerful reason people are giving money to companies promising foreclosures rescue is that getting a loan modification isn’t an easy process.

Celine Thomasson, a Neighborhood Works representative – an agency trying to get the word out about fake foreclosure rescue companies – advises people who have financial problems not to shut off communication with their lenders.

Posted by Istvan Fekete on Aug 2 2010. Filed under Foreclosures. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry