1/25/2011 10:47 AM (PST)

Eva, are they asking for any upfront fees? That's illegal.

In general, we recommend that if you are having trouble making your mortgage payments we would recommend that you first seek a loan modification through an approved HUD approved non-profit housing counselor ASAP. Call the national foreclosure prevention hotline at 888-995-4673 to speak with a HUD certified housing counseling agency. They can evaluate your housing options, open lines of communication with mortgage lenders, negotiate a loan modification, and help you with household budgeting, all at no cost.

By the way, when you call this nat'l housing counseling hotline you can have any complaints against any foreclosure/loan modification company you've dealt with entered into the national loan mod complaint database (www.preventloanscams.org) at the same time, so that you don't have to go to that site and duplicate your effort). Be sure to mention to the housing counselor that you want to do this.

www.preventloanscams.org was launched in March 2010 and they’ve got an online complaint form for referring loan mod scams to law enforcement agencies (but again, you shouldn't need to do this separately if you call the national housing hotline at 888-995-4673).

The FTC also is trying to stop the rampant abuse by loan mod companies. We have an article on our Facebook page article about the new FTC rules for loan modifications that have recently gone into effect nationwide:

http://www.facebook.com/notes/bbb-of-the-southland/ftc-issues-final-rule-to-protect-struggling-homeowners-from-mortgage-relief-scam/10150105515042195

California Homeowners:
In 2010 California received $2 billion from the Treasury Department to help low and moderate income families who are struggling to pay their mortgages. The funds are being administered by the California Housing Finance Agency under an umbrella initiative called “Keep Your Home”:
see www.keepyourhomecalifornia.org
call 888-954-KEEP (5337)

The four Keep Your Home Programs are:
Unemployment Mortgage Assistance – launched, call 888-954-KEEP (5337)
Mortgage Reinstatement Assistance Program – expected to launch 2/7/11
Principal Reduction Program – expected to launch 2/7/11
Transition Assistance Program – expected to launch 2/7/11

Good luck, the loan mod journey is not an easy one.