Expert: Loan modification companies may not be good for you
With the growing number of foreclosures across the country, experts are warning homeowners about the dangers of loan modification companies.
They work by charging you a fee, and trying to talk your mortgage holder into dropping your interest rates or monthly payments.
Irene King, 66, knows about the companies. You see, King is facing foreclosure.
She said that her mortgage problems began in June when a company named Mortgage Shield, which once operated out of Katy, told her that for $159, they could get her a better interest rate.
King said that the company took the money out of her account. She said that she was told to sit back, relax and not to pay any notes because Mortgage Shield would take care of everything.
King said she didn’t pay anything for the next seven months.
She said that Mortgage Shield did nothing during that time, so she filed a complaint with the Better Business Bureau.
Now, she says with interest and penalties, she needs to come up with $20,000 to keep her home
And she doesn’t have it.
“I would say the majority of the companies who are doing loan modification aren’t doing them the right way, including the non profits,” said Kevin McGill who teaches loan modification seminars.
He said that if it is done right, it can help, but you still need to be cautious.
Mortgage Shield is no longer in business.
Meanwhile, Irene King is wondering if her home will soon belong to the bank.
“I’m worried. I have five kids I’m taking care of and it would be pretty hard to start over,” she said.
Reports indicate that King is schedule for foreclosure in March.
She said that she’s working with an attorney to broker a deal with the bank.
The Better Business Bureau said that Mortgage Shield has gone out of business and will not respond to their complaints.
