With the recent news that home foreclosures reached a historic high last month, more and more divorcing Californians are trying to stave off foreclosures and considering whether to apply for mortgage modification.
California has one of the highest default rates for home mortgages in the country, which makes our borrowers ripe targets for many of the scam artists that have popped up over the past few years. As is is typically the case, thousands of people fall victim to mortgage scams before the government becomes aware of the problem and can step in to address it. Fortunately, according to USA Today, both federal and state authorities have recently begun to address the problem and are clamping down on refinancing schemes.
If you find yourself facing an impending balloon payment, interest rate adjustment or even foreclosure, you may still want to consider a mortgage modification. However, it is generally best if you work with an experienced real estate attorney who can walk you through the process and can help you ensure you are working with a legitimate provider and not an unscrupulous thief. While no attorney can guarantee that your home won't ultimately fall victim to foreclosure, you give yourself the best odds when you work with an attorney.
Should you choose to move forward with mortgage modification on your own, pay close attention to the following red flags:
(1) Guarantees to save your home from foreclosure
(2) Unknown telemarketers who cold-call you with promises of saving your home
(3) Companies that ask for sensitive and confidential information over the phone
(4) Demands for large, up-front payments
(5) Promises of making large chunks of your principal "go away"
If you see any of these red flags, or have an uncomfortable feeling that someone is probing you far too extensively, then walk the other direction immediately. We've seen far too many stories of creative identity thieves weaseling their way into borrowers' bank accounts, draining all of the funds, and then disappearing into the night only to attack another unsuspecting victim the next day.
For more information about community property and other California family law issues, please contact attorney Gary D. Sparks.