Mortgage Modification Crackdown: Operation Loan Lies

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Mortgage Consultants that feed off desperate homeowners that are struggling with their monthly payments and risk foreclosure are becoming a priority for law enforcement agencies.
The Federal Trade Commission has recently started “Operation Loan Lies” a nationwide operation that involves 25 federal and state agencies. The goal is simple to shut down businesses that deceive homeowners by offering foreclosure rescue and mortgage modification services that don’t help but cost homeowners large sums in consultation and processing fees.
What are the results of Operation Loan Lies?
The Federal Trade Commission claims to have brought 14 cases, with the help of 23 state attorneys general and other law enforcement agencies, against 178 companies.
Even with the combined efforts of nationwide law enforcement agencies cracking down on mortgage modification conmen is going to be hard work. In a matter of months thousands of loan modification consultants appeared feeding off the millions of homeowners that risk foreclosure.
Unfortunately these conmen feed off the misconception that for profit companies that offer to reduce your debt and monthly payments will get better results than non profit government agencies.
What can we do to protect ourselves against the feeding frenzy of mortgage vultures?
Good information is your best weapon. As with all predators mortgage modification vultures will go for the weakest victim every time. Make yourself a hard target, ask questions, keep informed.
Having a quick checklist can help to avoid mortgage modification vultures. Avoid any company or consultant that:
1)   Wants to get paid before he or the company does anything. Not a good idea to pay someone before he does his job, it kind of takes away all incentive and is a basic tool for conmen.
2)   Say they can GUARANTEE they will stop your foreclosure and reduce your debt. Nobody can guarantee that because it is in the power of the bank not the loan modification company or you. If you do not pay your mortgage payments your mortgage will foreclose. Banks can accept workarounds, debt reductions and loan modifications but it is not a guarantee.
3)   Tell you to stop paying or communicating with your lender. You should never do this. Good communication with your lender is vital for a satisfactory debt reduction or loan modification. Conmen and fraudulent loan modification companies will ask you to stop communicating with your bank and let them deal with it all, while you pay their fees and they take your money with nothing to show for it.
Mortgage vultures can be avoided and government authorities are working hard to crackdown on this type of fraud that feeds off our weakest. Don’t become a victim, get smart and find quality counseling to avoid foreclosure. Surprisingly the best kind tends to be that which is free and offered by unbiased government institutions.