Loan Modification Scams

There seems to be an abundant numbers of these scams in Southern California and there's also a new education campaign to warn homeowners.

How do most of these scams work? They charge people thousands of dollars for credit mediation and credit counseling, services provided free by the federal government.

How often do these loan modification schemes work out better mortgage terms with your lender? Not often.

The Los Angeles Times says:

Seniors, Latinos, African Americans and Asian Americans have been particularly victimized and will be a focus of the education campaign, Fitzgerald said.

For the next three weeks, community organizers and volunteers working with NeighborWorks and its local affiliate, Los Angeles Neighborhood Housing Services, will be distributing marketing materials to people and warning companies about loan modification fraud. The first stop today was the Sun Valley Workforce Center in Sun Valley.

“Many of these families believe they have nowhere to turn, nowhere to go for help or assistance,” Los Angeles Mayor Antonio Villaraigosa said at the news conference.

In April, the Los Angeles City Council passed an ordinance imposing penalties on companies that charge for such services.