| Someone calls you on the phone and claims a "special relationship" or to have an "inside person" with your lender. Telemarketers (though they say they are calling from an attorney's office) even go so far as to say they have something to do with a government program that can help you. Watch out for official-looking mail that is not from your lender but a modification con artist.
2. A middle man to a middle man.
Everyone wants a piece of the pie and there are thousands of people saying they can get you a loan modification, but most of them have little or  nothing to do with the actual process. More middlemen means more fees and zero quality control or accountability for you, the homeowner.
3. Never use someone you can't meet with...at their office.
Beware of out of town firms. As we speak there are phony companies popping up by the day, especially in Southern California, who have one goal - to take your money. NEVER do business with someone over the phone you can't meet with at their office to check them out. Remember anyone can tell you anything over the phone (I could tell you that I'm 6'4" and have a full head of hair!) but it probably ain't so! If they were really that good you would probably be calling them instead of them calling you. 4. Selling you the sunshine. Loan modification telemarketers are operating off a script and telling you exactly what you want to to hear so you'll write a check. Stop. Think. A true professional will go over the risk and reward of their service and not just give you all the good news (that they can't guarantee in writing).
5. Stay away from Craigs List
Craigs List is great if you want to buy a nasty used futon but please do not find your representation  for important financial services there. Think about it - there are hundeds of thousands of dollars at stake so get it right! 6. Make sure you get advice about all of your options. Generals want to go to war, doctors want to operate, and loan modification salesman want to...you got it! This is a very serious process and you need to get the total picture including the foreclosure process, short sale, bankruptcy, taxes, deficiency judgments, credit, etc. Clients need to know all of their options and the pro's and con's of each before proceeding.
7. Never give credit card or financial information over the phone. This should be self explanatory but I'm continually amazed how easily people hand over their money without ever meeting the company. They may clean you out and come back for more. Have you ever heard the saying "a fool and their money are easily parted?" 8. Get proof of successful modifications. The guy on the phone will tell you about all of these amazing things, but ask for proof of their recent successful files - evidenced by before and after mortgage statements - and they'll start backpeddling so fast your head will spin. The proof is in the completion...not what they say they'll do! 9. The principal reduction trap. This is where they get a lot of people. Many homeowners are so angry and emotional about their house going down in value that they are easy prey for salesman who promise that they'll lower their house down to fair market value. Here's the truth - you can afford to keep your home based on what your monthly payment is, not  based on what it's worth, and lenders know this. Principal reduction does happen, but maybe only 10% of the time (for everyone) and more so with some lenders (Litton and US Bank). Even if the bank reduces your principal, who do you think might get a 1099 for that amount as taxable income? Be careful what you wish for! 11. Get everything in writing. Get everything documented before you commit to doing business, including physical addresses, names of attorneys or brokers and staff, state license numbers, phone numbers, agreements, receipt of payments, scheduled points of communication, refund policies, and proof of correspondence with your lender. | 
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