Four warning signs your home loan modification may be a scam

In the news, I've been reading more and more about people who are falling victim to financial scams. One type of scam in particular can impact your home: a home loan modification scam. Our homes are where we keep warm, where we keep food in our bellies, and where we spend time with our family and friends. Wouldn't it be awful to lose all of that because of some dishonest people? So let's talk about what this scam looks like and how you can avoid it.

First off, it's important to know that home loan modifications themselves can be a great product. They allow people who are in danger of losing their home to modify the terms of their mortgage loan in order .

However, there are always people in the world who are willing to take advantage of others for their own personal gain, and unfortunately, they know that desperate times call for desperate measures. If people are experiencing financial hardship, they may be feeling like they'd do whatever it takes to hold onto their homes -and it's during this vulnerable time that people are the most susceptible to scams.

Before you accept a home loan modification, keep some of these warnings in mind so you don't accidentally fall victim to a scam:

Don't trust anyone who comes to your door. If someone comes to your front door and offers solutions to help you keep your home, a big red flag should go up in your mind. Identity fraud can be a major part of a home loan modification scam. It is very possible that the scammer got a hold of your mortgage statement, saw that your payments were past due, and then came knocking.

Always read the fine print. Banks are notorious for providing clients with too much information, but the truth is that everyone needs to read the fine print (even if you completely trust your financial planner). If someone comes to you with a long, detailed explanation of your home modification loan and even longer paper work, take your time to read it. Those extra couple of hours could save your home.

Never pay a fee upfront. Many financial scams start with the client paying a fee up front - and then never receiving services in return. Trustworthy banks should always tell you about the fees upfront but not charge you until the service is provided. If you're asked to pay any fees upfront, do some investigating before you go further.

Don't let someone else do the talking. If you are in danger of foreclosure, make an appointment with your bank yourself. There are a ton of companies out there who may offer to negotiate with your mortgage lender on your behalf. However, banks will not usually negotiate with third parties other than bankruptcy agencies and, possibly, the federal government. If you need to make a modification to your home loan, then contact your bank directly.

Let's review: don't trust strangers at the door, read the fine print, no payments upfront, and see your bank to work out the details. Though they're each small tasks, they can help you avoid a huge financial mistake. Financial predators are out there; don't fall victim to their scams.