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 debt relief. With rising rates of loan default and foreclosure, the amount of scams targeted at borrowers under financial stress has sky rocketed.

Many different kinds of scams have emerged from this explosive growth—refinance scams, repurchase scams, internet and phone scams, etc. While their names are different, their methods are usually similar. So what can you look out for? They will often claim that they can eliminate all of your debt and you can just tell your creditors you aren’t paying them back. They may also offer to “negotiate” your debts for you. Notice, they will often charge you a hefty upfront fee and the paper agreement that you sign won’t look exactly as they promised.

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. Though I’ve outlined some warning signs for you, I can’t possibly know them all. If you know you need help with your debt, consider talking to a bankruptcy attorney. They can give you the real legal perspective you need to find the right way to relieve your debt.

Tags: dangers of modifying loans, FDIC Warning, internet and phone scams, legal protection, loan modification scams, options for debt relief, refinance scams, repurchase scams, St. Louis bankruptcy attorney

This entry was posted on Monday, September 21st, 2009 at 10:25 am and is filed under bankruptcy. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.