Consumers facing foreclosure might be tempted to retain the services of a loan modification company to help them to obtain more favorable terms on their loan. Before doing so, the Office of the Attorney General encourages consumers to bear in mind several facts about Colorado law and the fact that they may be able to accomplish a modification without hiring anyone.
When dealing with a loan modification company remember:
- Before retaining an outside company or firm to attempt to modify your home loan, Colorado consumers are advised they should first obtain free help from the Colorado Foreclosure Hotline at 1-877-601-HOPE (4673). For more information on the hotline, visit their Web site at www.coloradoforeclosurehotline.org.
- It is illegal in Colorado for a loan modification or renegotiation company to charge you an upfront fee. Ongoing or monthly service charges also are forbidden under Colorado law. These companies can only charge you once their services are completed.
- Never stop making your monthly payments. Consumers who do so could find themselves in foreclosure.
- Do not ignore communication from your lender. Most lenders have loan modification programs that can help you save your home. In some cases, all a borrower needs to do is call the lender and provide some current financial information.
- Beware of any advice from a loan modification company urging you not to contact your lender.
- If any company promised they will get rid of your debt, they are making a promise they cannot keep.
- Check out any loan modification company you are considering hiring. The Better Business Bureau maintains ratings of businesses. Any company with an “F” rating should be avoided.
To file a complaint against a loan modification company, visit www.coloradoattorneygeneral.gov/complaint.