Loan Modification Step One: Do Your Homework
The California Department of Real Estate initiated over 2000 investigations involving loan modification complaints last year, record numbers of real estate licensees either surrendered their licenses or had their licenses revoked, and the worst part is, most of the people who received "Desist and Refrain" orders from the DRE were not even licensed.
The California State Legislature has, since October of last year, prohibited anyone providing any loan modification services from charging any kind of advance fee, yet the loan modification scams continue.
Borrowers who are in danger of default or foreclosure as a consequence of the public or their own private economic downturn should very carefully evaluate their financial options before seeking out any fee-based or nonprofit loan modification help.
Loan modification step one is, do your own homework. An excellent starting point for your investigation is the DRE's comprehensive Consumer Alert, Fraud Warnings for California Homeowners (PDF) republished in November of last year (after California outlawed advance fees) and its consumer tips for working directly with your lender on loan modification (PDF). These publications are loaded with good information and links to other resources without charge.
