Shady Loan Modification Companies Told To Get Out Of Town By AG

Loan Modification companies have been in the limelight for the last few months and for once that is probably not a good thing. The adage “there is no such thing as bad publicity” might fail in this occasion when all government institutions are teaming up to put out of business shady loan modification companies.

California Attorney General Jerry Brown said last Wednesday in his best cowboy language that he was “coming after” loan modification companies that were on the fringe of illegal activities. Mr Brown sent letters to 386 loan modification companies and instructed them to register with the Attorney General office and post a $100,000 bond or face criminal charges. Up to now there has been no loan modification that has registered. Attorney General Brown’s fighting talk did not stop there. He is reported to have said: “If you pay these people, you’re not going to get it back. They’re not financially solvent”. The reasoning is that if they are not willing to pay a $100,000 bond they are probably not a financially viable company and are just out for the quick buck. The worst part is that these companies are probably doing more than duping homeowners for loan modifications they can’t deliver. If they are willing to break the law in that way they are probably happy to do it in other ways.

The situation with the loan modification industry is probably just the peak of the iceberg. AG Brown’s language bordered on the humorous when he warned shady loan modifications: “We’re going to find that, too [the other criminal offences]. I would recommend anybody in this business get out of town, because we’re coming after you”. These statements come after AG Brown formed part of a nationwide raid on large and small loan modification companies and consultants. The message is clear, the government is struggling as it is to help ailing homeowners to save their homes and don’t appreciate conmen making things worse for desperate mortgage owners.

How to Spot a Shady Loan modification Company?

1) They offer hard to believe deals and guarantee results. Big giveaway as nobody can guarantee a loan modification, it depends on the bank that ownsthe loan.

2) They demand up front payment. This is actually illegal. Loan Modification companies cannot demand payment for services that have not been carried out.

3) They tell you to stop communicating with your mortgage provider and to stop making payments. This is the worse thing you can do. It will destroy your credit rating and really annoy your mortgage provider. Two things you really don’t want to do.