Consumer News

The White House Blog: Help for Homeowners
Feb 18th, 2009 - The White House Blog

The White House blog discusses "Questions and Answers for Borrowers about the Homeowner and Affordability and Stability Plan"...

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Consumer Alert

Advance Fees and Loan Modification Services

If you fall behind on your mortgage payments, you may be solicited by individuals or companies via mail, by phone, or through the internet. Loan modification companies offer to help you work out a loan modification with your lender to avoid foreclosure. Some companies will require that you pay an upfront fee. Depending on the state that you reside in, licensing a company holds, will determine whether or not they are able to collect an upfront fee.

In cases where companies require you to pay an upfront fee, make sure you have a clear understanding of the services they will provide, a timeline of those services, and an agreed payment amount for each phase of service. This should clearly be stated and included in an “Advance Fee Agreement for Loan Modification”.

Halo Mac members are required to have an Advance Fee Agreement for Loan Modification services signed by the homeowner when homeowners are asked to pay a fee upfront.

Special rules apply for collecting advance fees and may depend, among other things, the state you live in and how far delinquent you’ve become on your mortgage. If a Notice of Default, (“NOD”) has been filed against your home, an attorney when rendering services in the course of their legal practice(s) may still be able to collect an upfront fee, others typically cannot.