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Homeowners struggling to pay their mortgages have been taking advantage of the government's new loan modification program. Unfortunately, so have scam artists.

The effort has given rise to a slew of loan modification companies that target the more than 5 million homeowners behind on their payments. Some of them are legit, but many aren't. They usually charge a few thousand dollars for their work. What borrowers don't realize is they can complete the process themselves for free.

To get started, contact your lender. The lender is the only company with the authority to change your loan terms. The process will be similar to when you applied for your mortgage. You will need to provide financial documents and a letter that explains your economic hardship.

Loan modification companies argue that the process can get complicated and they can save time and prevent frustration. But this convenience is pricey, especially for people who can't afford their payments. If a company charges $3,000 for a loan modification, that's like paying $25 an hour for 120 hours of work. You can complete the entire process in far less time.

It's also important that you fully understand your new loan terms. By going through the modification process yourself, you will be more familiar with what you're signing. It will also give you the opportunity to ask questions and avoid surprises.

There's also free help available from the U.S. Department of Housing and Urban Development and through the Homeownership Preservation Foundation Web site.

If you decide to pay a company to help you modify your loan, keep in mind that:

1. Only lenders can arrange lower payments. If a modification company guarantees that your loan will be changed, walk away. It's a scam.

2. Modification companies might promise to keep you in your home, but they have no control over that. Be sure to avoid any company that asks you to transfer the deed of your house. The only time you should sign a property deed over to someone is if you're working directly with your mortgage company to forgive your debt.

3. Be wary of companies that charge large fees upfront. A reputable company will impose fees after it has secured the changes. Remember that you can do all the work yourself and receive government assistance for free. Before starting the process, find out if you qualify through the Federal Housing Administration.

5. Never agree to make payments to anyone other than your loan company. At the least, middle men slow down the process. At worst, intermediaries might be trying to scam you.

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