With interest rates at an all-time low, many homeowners may be looking to modify their existing loans. Some home equity lines of credit, having been acquired by homeowners as long as 10 years ago, are due to be adjusted to higher rates over the next three years. For many struggling homeowners, particularly those underwater, securing a loan modification may provide the relief needed to avoid going into default.
When seeking a loan modification, consider the following helpful tips:
- Read carefully any and all documents that you are asked to sign.
- Be wary of businesses that aggressively seek clients for loan modification.
- Do not pay any fees until after the promised services have been provided. Federal and state law prohibits loan modification companies from charging upfront fees prior to performing the contracted services.
Nevada Attorney General Adam Paul Laxalt, in partnership with the Home Again Nevada Homeowner Relief Program sponsored by the Office of the Nevada Attorney General, issued the warning.
The Office of the Nevada Attorney General’s Home Again Program offers free assistance regarding loan modification in partnership with Housing of Urban Development (HUD) counseling agencies and legal services partners.
“With refinance opportunities come the potential for falling victim to loan modification scams, where scammers charge victims fees upfront,” said Laxalt. “It is in your best interest to explore all options by contacting your original lender and my office’s Home Again Program for assistance.”