Loan Modifications a Lucrative Business for Scammers

By: Jason Rich, Community Outreach Coordinator, NHS of Baltimore

While my associates and I were flyering for NHS in Fells Point the other day, we were asked by a muscular man with a beaming smile if we were doing loan modifications.

We said, "Yes, Neighborhood Housing Services offers free counseling to help homeowners obtain a loan modification. Unfortunately, these same free services are being offered by scam companies for thousands of dollars. We are out here trying to get the word out so that people in vulnerable situations don't lose even more money."

Without missing a beat, the young man replied excitedly, "It's great work! I'm about to get into the foreclosure business too. People are making a killing on it right now! You can charge like $1,500 or more for a loan modification!"

Troubled by his response, we replied to him, "OK, but we help homeowners obtain loan modifications for free. Why would a person in financial trouble pay $1,500 for a free service?"

His ever-glowing optimism unrelenting, "Well, it's still helping people!"

"It's not though," we said.

After a brief period of silence that lasted five seconds, but felt like forever, we said our socially acceptable goodbyes and went on with our day. As soon as he was gone, my associate and I looked at each other incredulously. Did he really believe that he would be helping people by taking a large sum of money that they probably don't have to give? Or was he just deluding himself so that he could cash in on the times? Either way, the experience showed us that these scams are coming from every direction indeed, even the boy next door.

If you are facing foreclosure, you may get phone calls, flyers, or e-mails from companies claiming they can save your home if you pay their fee. Don't fall for it. In Maryland, it is illegal to charge consumers up-front fees for a loan modification. These companies are out to scam you.

Neighborhood Housing Services provides reputable, quality loan modification and home-ownership counseling services for free. If you live in the Baltimore area and are facing foreclosure, call us at: 410-327-1200.