Castle Law Office Blog | Missouri & Illinois Bankruptcy Legal Blog

FDIC Shows Concern for Loan Modification Scams

As discussed earlier this month , foreclosures are at an all time high—and the credible banks are not necessarily prepared to handle it. Big companies like Bank of America and JP Morgan Chase are approving only a small percentage of the people that apply for loan modification, forcing homeowners facing foreclosure to look to loan modification firms for relief.

The FDIC issued a warning to “beware of foreclosure rescue and loan modification scams.” The subtitle reads, “If it’s too good to be true, it probably is.” And, just like debt settlement, the truth begins to surface about loan modifications. Hefty upfront fees and written agreements that stray from what you discussed with the company are often a sign that you may need to investigate your company further. Many other warning signs, however, are not as easy to identify and can easily be passed over by consumers.

I have many clients that come in to see us after they find out that loan modification offices have no legal protection to offer, no method of stopping harassing creditor calls, and no real plan for helping them with their debt. If you are in danger of defaulting on your mortgage, you may want to consider more than just loan modification. There are many types of bankruptcy relief. More importantly, there is a specific type that will allow you to save your home and get the legal protection you need to maintain a normal life. If you think you may need help with your debt, you would be well-advised to speak with a bankruptcy attorney that can provide you straight answers and a real legal perspective on your options.