Robb Hicken: Avoid loan modifications with upfront fees

An Idaho man spent nearly $3,000 trying to get an interest-rate modification from an Oklahoma company.

According to the Better Business Bureau of Central Oklahoma, mortgage lender Best Rate Financial claims to offer loss-mitigation services, loan modification and interest-rate adjustment services. It requires consumers to pay a security fee upfront to receive a loan and other services.

There’s one problem: Advance-fee loans are illegal in the United States and Canada.

Mortgage scams like this can be hard to detect. Homeowners are promised financial assistance from businesses that appear to have legitimate websites, use government program names like TARP or HAMP, or offer money-back guarantees. These can all be misleading tactics. That’s why BBB urges consumers to use our Business Review service on our website to research a company.

Best Rate Financial targets consumers by phone and by using two separate street addresses in Oklahoma City, according to BBB.

The unidentified Idaho scam victim told BBB that he spoke with a company representative who claimed Best Rate Financial could reduce his interest rate from 9 percent to 2.44 percent by using the Troubled Asset Relief Program, or TARP. The actual TARP program was established during the financial meltdown to help banks, not homeowners.

The Idahoan was asked to pay $2,882 upfront to begin processing the loan. A check was sent to an address in Oklahoma City, but the victim received nothing in return.

BBB has been unable to verify the registration status of Best Rate Financial with the Oklahoma Secretary of State or verify a license with the Oklahoma Department of Consumer Credit. BBB attempts to reach the company were unsuccessful. The company is not registered in Idaho, either.

Idaho law requires lenders or loan brokers to register, as do most states, when they do business here.

BBB offers these tips:

• Deal only with reputable companies.

• Be skeptical of any offer where you have to pay money upfront, especially if it’s for “insurance,” “processing” or “paperwork.”

• Don’t give personal information to firms offering loans, grants, credit cards or unsolicited services over the phone or Internet.

• Be wary of businesses that operate using a post office box and don’t have a street address.

• Find the company independently by getting its phone number from phone book or directory assistance.

• Contact the Idaho Attorney General’s Office or the Idaho Deaprtment of Finance to confirm the company is registered here.

• Contact BBB for a BBB Business Review by visiting

A note about home loans: “Mortgage broker” businesses rank No. 16 in terms of overall BBB inquiries. The federal Consumer Financial Protection Bureau has a “home loan toolkit” at That seems to be an interesting approach to help home buyers.