According to XAVIER BECERRA California State Attorney General,
1. Don't pay up-front fees. Foreclosure consultants and other companies offering loan modification services are prohibited by law from collecting money before services are performed.
2. Don't ignore letters from your lender or loan servicer. Responding to those letters is your best bet for saving your house.
3. Don't transfer title or sell your house to a "foreclosure rescuer." Beware! This is a scam to convince homeowners they can stay in the home as renters and buy their home back later. It might also be part of a fraudulent bankruptcy filing. Either way, a scammer can then evict the victim and take the home.
4. Don't pay your mortgage payments to anyone other than your lender or loan servicer. Mortgage consultants often keep the money for themselves.
5. Never sign any documents without reading them first. Many homeowners think that they are signing documents for a loan modification or for a new loan to pay off the mortgage they are behind on. Later, they discover that they actually transferred ownership of their home to someone who is now trying to evict them.
6. Be suspicious of any guarantees made to stop the foreclosure process—no matter what your circumstances are. Only your mortgage lender or servicer has the discretion to stop foreclosure and grant a loan modification. No third party can guarantee or pre-approve your mortgage modification application.
7. Be suspicious of any letters or postcards you receive that use language such as “Lender Investigation Notification,” or say that your bank or lender “is currently under investigation for predatory lending.”
8. Avoid dealing with “attorney-backed” businesses or law offices that refuse to provide an attorney’s name or State Bar number.
9. Avoid companies offering “forensic loan audits” or “predatory lending investigations.”
10. Verify the license of someone servicing or negotiating the terms of your mortgage loan by contacting the Department of Business Oversight at 866-275-2677 or visit the DBO website.
To find a HUD-approved housing counseling agency near you, access HUD's database for Foreclosure Avoidance Counseling or call 888-995-HOPETM (4673).