Many homeowners are looking into mortgage loan modification to lower their monthly payments. However, the potential among these businesses for scams is very great. The following will delve into how to recognize legitimate loan modification companies so someone seeking help won’t end up in having more trouble than just being unable to pay their mortgage.

Phoenix, AZ -- (SBWire) -- 12/31/2012 --The tools necessary for researching reputable loan modification companies are a telephone and a computer that has Internet access. Using either of these, check into whether or not a business has good credentials and accreditation. Contact the Better Business Bureau, the Federal Trade Commission, or the state attorney general’s office to learn of any complaints against a particular company. If a company advertises that anyone can get a loan modification through employing its services, it’s likely to be a fraudulent company. Be sure to enquire about the cost of the service. The federal loan modification plan commands that loan modification service be done for no cost to the homeowner, so if a business quotes a specific price, it’s trying to run a scam. To further ascertain the loan modification company’s legitimacy, request an explanation of the services it offers in writing and be sure to read the fine print. Loan modification con artists rely on the fear and uncertainty of troubled homeowners to trick them out of their money, so take time to thoroughly read through the document.

Legitimate loan modification companies offer to help struggling homeowners cut the amount of their mortgage payment down. This can be done by lowering the interest rate on the mortgage loan, by allowing more time to pay it off, or by getting the lien holder to reduce the principal of the loan. If one’s current lender does not have an in-house program for modification of loans, perhaps it is time to look to the federal government for assistance. The Obama administration designed the HAMP (home affordable modification program) to help property owners who are having a hard time making their mortgage payments. To qualify, one must show proof of financial hardship, documentation that a new, lower payment will be affordable, and must guarantee that the property is not condemned. When the program first came about, a homeowner had to live on premises; now that has changed and he can ask for modification on a property he rents or on a second mortgage. The property holder must have gotten the original mortgage on or before Jan. 1, 2009, and he must not have been arrested for a felony within the past 10 years.

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