Florida Homeowners Need to Beware of Loan Modification Scams

The South Florida economy appears to be slowly improving; however, many homeowners continue to struggle to pay their mortgage because of unfavorable adjustable-rate mortgage (ARM) loans, negative equity, job loss and other adverse economic or personal factors. While a Chapter 7 or Chapter 13 bankruptcy may halt a foreclosure sale and provide a viable financial option for saving your home, many property owners fall for loan modification scams in an attempt to avoid bankruptcy.

Although there are legitimate loan modification programs, the vulnerability and desperation of those facing foreclosure has given rise to a multitude of shady businesses that exploit distressed homeowners. Loan modification scams are on the rise because many people do not understand the loan modification process and fail to consult with an experienced Florida loan modification attorney.

Although there are a significant number of inappropriate practices and warning signs that can tip homeowners off to a scam. One of the most common red flags homeowners need to recognize is a request for upfront payment for mortgage relief services. The Federal Trade Commission’s Mortgage Assistance Relief Services Rule establishes certain prerequisites before a business offering loan modifications or foreclosure rescue services can collect a fee. Loan modification services must provide a written offer from the lender or mortgage servicer that the consumer decides to accept before any fee is paid. The party receiving a loan modification also must be provided with a written summary of significant changes to the loan terms.

Despite this rule, many unethical scammers are still able to extract a fee in advance because homeowners are deceived by misleading radio and television advertising. Below are some tips to help Florida homeowners looking for legitimate foreclosure solution:

  • Do not work with any company or service that requires you to pay an advance fee to negotiating refinanced terms, modifications or a mortgage work out;
  • Exercise caution if the company instructs you to send payments directly to its office rather than the lender;
  • Avoid guarantees from individuals and companies indicating they can obtain a modification or terminate a foreclosure;
  • Work with a loan modification attorney who is licensed by the Florida State Bar Association. Advantages to working with an attorney licensed by the state bar include the fact that attorneys are forced to adhere to strict ethical rules that go beyond obligations imposed by law.

That’s why it is important to hire an experience bankruptcy attorney to make sure this system does not take advantage of you. At Hoskins, Turco, Lloyd & Lloyd, our experienced team of bankruptcy attorneys are dedicated to guiding our clients out of difficult financial situations. Led by Bankruptcy Attorney and Partner Colin Lloyd, our firm’s Bankruptcy Department has helped thousands of clients make a fresh start and get back on their financial feet.

During your complimentary bankruptcy consultation at any of our offices in Port St. Lucie, Vero Beach, Fort Pierce, and Okeechobee, we’ll sit down with you and take the time to discuss the personalized bankruptcy or foreclosure option that best fits your particular scenario.

To set up a FREE Consultation with Colin Lloyd or one of his Bankruptcy Attorneys in Port St. Lucie, Vero Beach, Fort Pierce, or Okeechobee, call us today at 866-460-1990.

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