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Beware of The New Predators in Lending

With the fall of the subprime mortgage industry, the ripple effect has been felt by other areas as well, such as mortgage brokerage firms. For years, they suckered people into bad loans until the market caught up with them and everything came crashing down like a house of cards.

Well, they are back and in the hunt more aggressive than ever. Always looking for a new opportunity to cash in on the average consumer in financial trouble, many of these predatory brokers groups have returned to their old ways, this time as loan-modification companies. They prey on people that are entering the foreclosure process promising to be able to work out a deal between the lender and the borrower - for cash up front.

With the mortgage industry and economy in the current state, there is no shortage of people desparate to avoid losing their home. It has become a very high volume business in which new customers can be attracted for very little money. Using talk-radio ads, web pop-ups and other mass media ads full of glossy promises, like: "Reduce your mortgage rate to as low as 4%. No refinancing — no closing costs. Reduce your monthly payment. Foreclosures, late pays/bad credit okay."

No doubt that ads like that will attract a lot of attention. But, it'll cost you — in this case, 1 percent of your outstanding loan, half of it in advance. In most cases, there is nothing illegal about this type of business, but some of these shops are outright scams that take the money and run. Even the seemingly legitimate ones are operating on the borderline of immoral behavior, making huge profits off people's fear. In many cases, they fill them full of false hope and hook them into expensive services that many nonprofit and government agencies offer for free.

Troubled homeowners are finding their mailboxes filled with offers. Foreclosure filings are public records, and loan modifiers pound the courthouse steps to find good leads. The painful truth is that not every loan will qualify. Banks have recently made public commitments to putting more effort into working loans out. But homeowners need to realize that the best way to do that is directly with the lender.

Many times, the homeowner finds out on the eve of a foreclosure date that, unfortunately, the loan modifier wasn't able to help in their case, leaving them with almost no alternative. Recently, I have seen many new clients forced to race in to my office to see if I can stop the foreclosure through a Chapter 13 bankruptcy. In most cases, we can do that, but it would have been a lot less stressful if they would have come in to see about their option much earlier.

If you are behind in your mortgage and facing a possible foreclosure, don't fall for the emotional based advertising and claims of these loan modification companies. Ask them up front if they will guarantee in writing that you will be successful in avoiding foreclosure. My bet is they will not do that.

I have spent the last 15 years helping families avoid foreclosure and keep their homes. I know what the law provides and I can tell you it is a lot more definite and powerful than what a loan modification company can "try" to get done for you. If you would like to find out more, request a copy of our free consumer guide "7 Critical Mistakes To Avoid The Dismissal Of Your Bankruptcy Case" or call us for free at 1-866-570-8484 today.

The St. Louis bankruptcy attorneys at Castle Law Office provide legal assistance for those who are going through severe financial difficulties. Filing for bankruptcy is a way to move past crippling debt and to get on with your life. If you or a loved one in the St. Louis, Missouri and Illinois area are considering filing for bankruptcy, contact Castle Law Office for a free legal consultation today. We can offer help and a fresh start to citizens in St. Louis County, Jefferson County, St. Charles County, East St. Louis, Franklin County, St. Clair County, Boone County, and the entire state of Missouri, as well as Belleville, Granite City, Fairview Heights, O'Fallon and Alton. We help to stop foreclosure, repossession and wage garnishments. All of our attorneys are licensed as Missouri bankruptcy attorneys and Illinois bankruptcy lawyers.

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