Staff Writer
Associated Press

Salt Lake City, UT / June 17, 2010 / --  The "Notice" is taped to the door, its placed strategically in the local newspaper and recorded at the county recorder. For those that have never experienced the attention, stress and anxiety associated with a Notice of Default, the mental state can be overwhelming. 

The fear of losing your home; the wonder of who to call; what to do next; and how to convince your lender that reducing your monthly payment, interest rate or both is the best solution for all parties involved is no easy task.  Yet in every state there exists loan modification companies complete with counselors claiming to do just that. 

Loan modification companies advertise that they are the game-changers for families facing foreclosure.  According to many loan modification companies they advertise via their websites that they have a direct contact with lenders which in turn improves the delinquent borrowers chances for a loan modification.  Often their websites are dotted with testimonials with names like Sandy C or list high-end city names like Brentwood, Hurstbourne, or Park City at the end of testimonials in hopes of convincing families and individuals less educated about the loan modification process to use their services.

The business of home loan modifications over the past two years has skyrocketed.  But now many within law enforcement, financial institutions and members of Congress are realizing that home loan modification companies have the potential to cause more harm than good.         

Consider Christopher Lee Diener, a once practicing attorney and his partners Stefano Joseph Marrero and Terrence Greene Sr. who defrauded 400 homeowners in a $1.25 million loan modification scam. "What most people don't understand is that individuals or families that seek a loan modification are giving up information that in the wrong hands can and often does lead to identity theft or other similar crimes," says Michael Blackburn of the non-profit Perfect Home Living.  In the case of Diener and his partners, they targeted homeowners at risk of losing their home in upscale neighborhoods.

While growing criticisms against the FBI concerning its involvement in investigating mortgage fraud schemes that are tied directly to loan modification companies has been slow,  the Agency by Direction of President Obama's interagency Financial Fraud Enforcement Task Force has increased efforts to investigate and prosecute these financial crimes.  According to Attorney General Eric Holder, the task force since March 1, 2010 has through "Operation Stolen Dreams" made 485 arrests that accounted for $2.3 billion in losses and to date have recovered more than $147 million. 

Mortgage Fraud ruins lives, destroys families and devastates whole communities so attacking the problem from every possible direction is vital," said Attorney General Holder.

Yet while federal and some state agencies attack the more problematic areas of mortgage fraud, like loan modification companies another bigger problem exists according to experts.  "Most families that receive assistance from a loan modification company don't qualify in the first place but are made to believe that they do," says Blackburn.  "Keep in mind most loan modification companies are not regulated and use controlled licensed real estate professionals and attorneys with hefty up-front fees," Blackburn added. 

For families seeking a loan modification remember there are no shortcuts.  Ensure to due background checks and because a group is claiming to be non-profit or an advocacy group doesn't mean that you or your family are assured safe passage through the loan modification process.  HUD Housing Counselors are able to assist but ensure to work with a housing counselor and agency that has more than five years of experience as a HUD Housing Counselor.  If working with a HUD Housing Counselor ensure that as the consumer you are not making the calls to your lender on your own behalf and always ensure to remain in contact with your lender first and foremost as many financial institutions offer programs and assistance vital to your qualifying for a loan modification. 

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About Perfect Home Living 

Perfect Home Living is a nationally recognized non-profit leader that assists in implementing programs and providing training and education to financial lenders, government entities, banking regulators, consumers and licensed professionals to red flags within today's  real estate market.   For more information or to request assistance please visit us online at:  http://www.PerfectHomeLiving.com or email sheri@perfecthomeliving.com