Though the mainstream media has mostly moved on from their daily obsession with the foreclosure housing crisis, those on the front line (such as real estate and mortgage professionals) are all too aware that the Monster that Ate the American Dream is still crunching its way through millions of lives. Like it or not, foreclosures and upside down mortgages aren’t leaving any time soon.

Long time readers are well aware that we at AIPIS.org rarely miss a chance to encourage our agents to do everything humanly possible to stay on the cutting edge of customer service. These days, we’d be hard pressed to find an area more ready for your help than those desperate for a mortgage modification but at serious risk of stumbling into the scam industry. It’s a veritable feeding frenzy out there. Rest assured that where there are people in need, liars, cheats, and thieves will be along shortly to keep them company.

If, through the daily course of your business, you discover a client pondering mortgage modification, it behooves you to be the trusted voice helping them stay clear of the reefs. Everyone likes to think they’re smart enough to avoid a scam, but brains don’t have much to do with it. Financial predators are clever and ruthless and good people fall into their clutches every day.

There are a couple of ways to go when considering a mortgage modification.

For-Profit-Companies
There’s nothing intrinsically wrong with charging money for a service. That’s the foundation of capitalism. The trouble arises when the value of the service is shoddy or nonexistent. A borrower caught in the throes of financial devastation can be tempted to simply hand over everything to a “professional” and let them deal with it. With fees that often fall in the $2,500 to $4,000 range, this is the area of the industry scammers love to frequent. Make no mistake, there are good companies out there who will work hard on your behalf. One way to find them is to ask for references to satisfied former customers. Don’t stop at just one. Shoot for a handful. If they can’t provide them or get prissy about the request, keep moving. You don’t need them and there are plenty other fish in the sea.

Another good way to evaluate for-profit mortgage modification companies is to contact your state’s Attorney General office and ask if there have been any complaints filed against the company. People who have been treated badly like to tell the government about it loudly and often. Use this knowledge to your advantage.

Non-Profit Counselors
If they’re not in it for the money, you can trust them, right? Unfortunately, it’s not quite as cut-and-dried as that. The problem with non-profit mortgage counselors is that some of them are downright incompetent and, ultimately, might be as harmful to your financial predicament as an outright scam. Though the Federal Department of Housing and Urban Development (HUD) maintains a list of approved counselors, many of them won’t actually prepare the loan modification paperwork for you. Their job is to explain the process, provide an “action plan,” and send you out the door with a reassuring pat on the back and mumbled “Good luck. You’re going to need it.”

We’re not saying there’s anything wrong with this, just that you should be prepared for the reality that these free counselors are probably going to expect you to do some of the legwork on your own.

For clients who have already expended some time and effort in pursuing a mortgage modification, perhaps with unsatisfying results, it could be time to suggest they consider purchasing the Loan Modification / Q.W.R Short Sale Letter from our affiliate JasonHartman.com. Especially handy if you’ve been unable to get your bank or mortgage company to respond “yea” or “nay” to your request, this attractively priced ($47) package includes a letter template that loan holders are required by law to respond to. Of course, we can’t guarantee what they’re going to say, but sometimes ANY answer is better than none. As with all Jason Hartman products, buyers can rest assured it was put together by a careful, experienced team of respected real estate professionals.

Suffering through a foreclosure threat or upside down mortgage is one of the worst personal financial experiences out there. There’s no way to sugarcoat that fact. However, armed with the preceding information, you can help your clients gird their loins for battle more prepared to avoid the potholes populated by scammers and incompetents.

Good luck out there!

The AIPIS Team