A proposal for loan modification of mortgage property from a lender does not happen everyday. When it's initiated by then it would appear genial and tempting. However, homeowners must be on the guard during this moment, there are scams with this scheme. To summarize, here are five things for homeowners to hate about loan modification initiated by lenders.

They pose as loan rescue

They project as 911-like that they promise to rescue homeowners from becoming homeless. However, be aware that they may lure homeowner into an immediate agreement for transfer of full ownership of the property. And a promise to allow them to stay in the property until such a time a new mortgage can be entered. This should cause for alarm, because lenders now have the right to sell the property to anyone interested.

Too friendly lenders

It's not usual that lenders initiate a loan modification proposal to a homeowner. The latter should be cautious with this action, no matter how tempting. The lenders' action could be motivated with the potential value of property when sold to someone else. A loan modification might be drawn out that will still eventually foreclose later.

Promise of low interest rates

Lower interest rate of loans is like some fairy tale concept. Remember that lenders vital purpose is to make a profit, so low interest rates are a suicide. They might offer a low interest for the first six months, but doubles them after wards immediately. And this might be done without prior notice, with homeowners caught off guard and will be left unable to comply.

Extended mortgage period

Basic accounting will teach you that extended mortgage period means a lower amortization amount. Again, very tempting when such amortization is affordable, but beware. This would mean more amounts for interests will be added to the principal loan amount. This might take a lifetime of paying off for a mortgage.

Blank loan modification contract

Contracts are commonly constructed in ways that no one wants to read them all lest get lost with the jargon. More often inserted with the stack of papers are blank documents. Usually, the only lines written are a header of the contract, and the portion which homeowner can sign. This portion of the contract might be used against the borrower, simply a red for a distressed homeowner.

So there you have it, and let these five things be a reminder for homeowners to be proactive with mortgage issues. Let this be a guide to avoid being fooled with profiting lenders.