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Which mortgage modification programs are for real?

Q: I keep getting phone calls with offers to refinance my mortgage loan through a government program called HAMP. I wouldn't mind refinancing -- our mortgage is still under water, so I feel we may be missing the opportunity of a lifetime -- but these callers don't seem trustworthy. How can I tell if these offers are legit, or just a scam?

A: Your suspicions about these calls may be well-placed. Apparently, there has been enough fraudulent activity surrounding HAMP (short for the Home Affordable Modification Program) that a group of federal agencies has put out a "Consumer Fraud Alert" containing tips on how to avoid scams involving this program. Here are some of the highlights:

  1. Only your current loan servicer can approve a loan modification under HAMP. If anyone else says they can do this for you, they are not telling the truth.
  2. Applying for a loan modification through the HAMP program is free. If someone mentions any application fees, it is a scam.
  3. If you need mortgage counseling, get it from a reliable source. The US Department of Housing and Urban Development has a list of approved counselors you can choose from.
  4. Your chances of approval depend solely on the facts and circumstances of your situation. Be wary of anyone claiming any sort of special expertise that can help your chances of approval.
  5. It is a government-sponsored program, so get information direct from the source. For more information on loan modification through HAMP, visit the special website the federal government has set up for this purpose at www.MakingHomeAffordable.gov.

As a general rule, you should never do any business, or even give information to, people you are unfamiliar with who contact you by phone. Simply ask them for a business name, address, and website -- information that will help you track down whether or not they are legitimate. Chances are, someone running a scam will simply hang up without giving you this information.

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