Mortgage Modifications: Careful Whom You Call

If someone offers to help modify your mortgage for the low-low upfront fee of $3,500, run for the hills! In many states, it's illegal to charge upfront fees or payments for loan-modification help.

The problem is twofold: Homeowners who can't afford their mortgages really can't afford to spend several thousand dollars on mortgage help. But when firms take the money and do nothing, they're also robbing borrowers of valuable time that could have been used for actual loan-modification attempts.

Rather than falling for a mortgage modification scam, consider a non-profit housing counseling agency, the Hope Now Alliance, or put in a direct call to your mortgage servicer, but don't sign on with any firm demanding a fee before any work is done.

The big foreclosure scam used to be equity thefts — so-called consultants targeting struggling borrowers whose homes were worth more than their mortgages. But so many people are under water these days that upfront fees are the "it" scam. Think you've been scammed? Contact the Federal Trade Commission at 1-877-FTC-HELP.