Published on June 16, 2011
Written by The Servion Group
CU Companies' Home Retention Department came across an instance where a member was contacted by a third party (Fidelity Corporation) who claimed to work very closely with CU Companies on a day to day basis. They offered to assist the member in getting approved for a loan modification, for a fee.
This is a scam. There is generally no need for a third party intermediary in this situation. Unfortunately, this agency sold their services to our borrower as a guarantee that they would quickly negotiate a plan for them. Loan modifications and repayment plans are objectives of CU Companies' Home Retention Department and are services for which we do not charge.
Although many legitimate agencies require some upfront processing fees, they typically are not substantial amounts. It should be an immediate red flag if someone is asking for an excessive upfront, non-refundable fee before they deliver any results-even if they provide correct documentation which is easily obtained and publicly available.
Precautionary Steps CU Companies Takes
Even if there is an authorization from our member to speak to a specific third party, we will take the time to investigate the nature of that agency's involvement in the process.
If the member has already made a payment to a third party which we believe may not be legitimate, we will suggest the member contact the financial institution from which they made the payment to find out their stop payment/resolution options.
Precautionary Steps for the Consumer/Member
Proceed with caution when dealing with anyone other than the lender (or the lender's mortgage servicer such as CU Companies) helping to modify the loan to avoid foreclosure. Remember that although using such a third party may make the process easier, it is not a requirement.
To avoid being taken advantage of, contact the lender or servicer first. They will explain the available options. Even if it is determined that using a third party is necessary, ongoing contact with the lender or servicer is important. Payments will continue to be made directly to the lender or servicer. There should be no reason to make payments through an outside party/company. (There may be an exception in bankruptcy cases.)
Avoid paying up-front fees. With the exception of small consultation fees to a legitimate housing counselor, it is unnecessary to pay substantial fees before receiving any service/results. Specifically, CU Companies does not charge for its loan modification services.