A Warning Regarding Loan Modification Scams
With the recent increase in New Jersey foreclosures, there has been a rise in fraudulent companies claiming to offer the following:
- “Loss Mitigation Consulting”
- “Foreclosure Prevention”
- “Mortgage Loan Modification”
- Any related service where the company is offering to negotiate your loan with your lender in exchange for upfront fees.
The New Jersey Department of Banking and Insurance receives complaints that these companies post advertisements and send direct mailers and other forms of marketing and solicitations to homeowners who have been served with foreclosure papers. These companies say that they can help. However, many are not properly licensed and are not legally permitted to offer these services in New Jersey. Homeowners are cautioned not to work with companies and individuals that are not in New Jersey, and to only deal with companies and individuals that are properly licensed in New Jersey.
Who is Permitted to Provide Loan Modification Assistance?
Loan modification assistance in New Jersey can only be offered by a licensed attorney or licensed debt adjuster. According to the New Jersey Debt Adjuster Act, a debt adjuster license is required in order to act as an intermediary between a borrower and lender to alter the payment terms of a loan. If the person contacting you is not a licensed attorney or debt adjuster, they cannot legally provide the loan modification help they are offering. Additionally, unless the individual assisting the homeowner is a New Jersey licensed attorney, they are not permitted to accept any payments until the modification is received and accepted.
How Can I Avoid a Loan Modification Scam?
Fake loan modification companies are aiming to take advantage of people in a stressful time. Seeking or accepting help from these fraudulent and unlicensed companies can end up costing you a lot of time and money in an already difficult situation such as foreclosure, without receiving any help in return. In many instances, homeowners who fall victim to a loan modification scam pay thousands of dollars and do not receive any assistance, and are left facing a sheriff sale without any representation.
Make sure that you are receiving assistance from a New Jersey licensed debt adjuster or attorney. Contact Ira J. Metrick today for experienced loan modification assistance. We can help you access your loan information and figure out which loan modification options are available to you.