As the number of foreclosures rises and the number of frustrated borrowers trying to negotiate their own modifications increases, there has also been a dramatic increase in the amount of loan modification scams turning up both on and offline.

While it is worrying to think that you may be getting cheated, there are some definite warning signs to look for when inquiring about a modification. The following are some examples (not intended to be a complete list) of signs that a company may be a scam.

• You are offered a guarantee of a successful modification.


• You are offered a strong chance of successful modification without being asked any details of your situation and circumstances


• You are required to pay a large fee upfront when your file has not been reviewed (different from a licensed attorney's fee)


• You are asked to transfer title or sell your house by a "foreclosure rescuer"


• You are asked to "pass your payment on" through a third party other than your lender or loan servicer


• You are forced into terms that are not beneficial to either you or your lender


• You are promised a certain term, interest rate, or principle reduction amount (especially if it has not been verified by your lender or put into writing)

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