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Is Mortgage Modification for You?

Beware of false promises that your bank will ease your loan terms

Q. I’ve fallen behind in my mortgage. I was recently approached by a company that’s promising to get me a loan modification. I would make lower mortgage payments and keep my home. But I’d have to pay the company a fee. Does this seem legitimate?

See also: 6 steps to a realistic debt repayment plan.

A. Red flags are popping up all over the place. No company can guarantee that your lender will agree to modify your mortgage. You stand to lose big-time if you pay for a promise that can’t be delivered.

Have you contacted your lender yourself to discuss your situation and ask for a modification? If you’ve had no luck there, consider seeking help from a government program designed to help struggling homeowners hang on to their homes, the Home Affordable Modification Program.

The program, run by the newly created Consumer Financial Protection Bureau, offers assistance and application forms by phone, toll-free, at 855-411-2372. You can also file complaints online or by phone if you suspect wrongdoing by a third party or lender.

There’s also the Homeowner’s HOPE Hotline, endorsed by the Treasury and the Housing and Urban Development departments. The hotline works with homeowners by putting them in touch with government-approved housing counselors who know about programs and resources in particular states. You can call the hotline toll-free at 888-995-HOPE (4673) or visit the Homeowner’s HOPE Hotline’s website.