Because of the home mortgage crisis, many new businesses have popped up offering to do loan modifications. If you cannot afford your first mortgage, a loan modification is probably the only way to save your home or other property, but beware! Many, if not most, of these outfits are dishonest.

Some of these companies will charge you money up front. Before October 11, 2009, only attorneys and certain realtors could charge up front for loan modifications. Since that date, it has been illegal for anyone in California to charge money up front for loan modifications. Even if someone gets you a good loan mod, they are legally required to wait until the entire process is finished before charging you any money. If someone asks you for money up front, walk away; they are breaking the law at your expense.

But charging up front is the least harm that some of these outfits do. The reason that the exceptions for attorneys and certain realtors was removed was because some attorneys, all in southern California to my knowledge, charged people up front for loan modifications, then did little or nothing for them. This not only ripped these people off by taking their money, but probably worse, it caused them to lose their houses in foreclosure.

Because of the change in the law that prohibits charging up front for loan modifications, almost all honest attorneys have gotten out of that line of work. I used to do loan modifications with another law firm before the law change, and we had a very high success rate. But once we could not charge up front, we quickly began to lose money and had to leave that area of practice.

So be very careful about who you hire to do a loan modification. NACA, a national non-profit, does not charge any money for its services. However, it merely teaches you how to do your own loan modifications; it does not do them for you.

If you cannot save your house with a loan modification, contact a competent bankruptcy attorney for a free consultation.  They can ensure that you will at least not owe any money for the house after foreclosure, plus get you out of other debts as well.