It seems like almost every day I see either an article or a news story on companies that are targeting vulnerable and desperate consumers and taking advantage of them. The last one I read was about a local company being shut down for fraudulent loan modifications after taking money from clients and never pursuing the lender for the modification at all.  Aside from the disturbing fact that these businesses are out ripping people off, it offends me so much because it hurts the credibility of the many legitimate businesses that are out there operating legally and ethically and truly trying to help consumers in an economic recession.

A loan modification can truly be a life-saver for homeowners that have loans that have adjusted beyond where they can pay and it's a valid an legitimate service when you hire a professional.  But the program is not for everyone.

Here are a few tips to help make sure that you don't get scammed.

• Carefully check the company's reputation.  A loan modification should be done by an attorney.  You can verify with the state bar association if the attorney is in good standing.  If the company you hire is not attorney-based, they should be licensed by the state and you can check that license as well to make sure they have the proper credentials to be in business.
• Make sure you are evaluated and pre-qualified before you sign or pay anything.  A loan modification doesn't work for everyone and a legitimate company will pre-qualify you to make sure you have a good chance at success before they sign you up.
• Avoid ads that "promise" or "guarantee" results.  No one can guarantee the results as it must be negotiated with the bank.  The company's success rate is more important.
• Make sure they have experience.  Don't hire someone who has no experience in the lending/real estate or legal fields to do your loan modification.  There are too many new "fly-by-night" companies that just opened and have no interest in long-term success (yours or theirs).
• Read your contract.  Do not sign anything with blanks not filled in and never sign anything that would turn over the deed of your house (the worse type of scam out there).

Remember, to qualify for a loan modification, you must be able to pay the "new" modified payment which means some type of income.  If you are out of work and have no income, you are not going to qualify.  Beware of anyone who tells you otherwise.  By following a few common sense tips and asking a lot of questions, you should be able to locate an honest and legitimate company that will explain their program in detail, answer all of your questions and help you determine if a loan modification is right for you.

The consultants at First Rate Debt Solutions are always happy to provide a free consultation with no obligation or commitment.

In this crazy credit crunch, even having good credit can hurt you.  How, you ask?  Because the credit card companies aren't just penalizing those who are making late payments or maxed out.  It's just one more example of why consumers must always be looking out for themselves and making sure that they aren't getting into trouble.  Read this article in Time magazine about how consumers with good credit are experiencing problems too.

http://www.time.com/time/magazine/article/0,9171,1904129,00.html

And if you have questions about credit cards or your credit card debt, the experts at First Rate Debt Solutions are here to help.