Loan Modification: Beware of Con Artist

The buzz word in the industry today is "compliance", I'd imagine that many would be surprised at how many "Modification" companies do not qualify under regulatory compliance. If you ever wondered where these people have come from and have popped up businesses overnight. Maybe you were not even looking for a modification company prior to you having a mortgage problem. Well guess what, you would be surprised at how many of the people that helped create this mortgage meltdown are the same ones that are attempting to help you "save your home". There were millions of dollars made in the refinance boom, many of those dollars were made by manipulating or massaging your numbers to make your loan work. When that industry dried up those same people who got wealthy had to figure out how to maintain their lifestyle...enter loan modifications.

These bad option ARM, Pick A Pay, Negative Amortization and interest only loans that were written 5 to 10 years ago have come to bite us in the rear. This has effected the industry so much the government has claimed to step in for an assist. Guess what, the same person that wrote the bad loan you are in today is probably now working in the new booming industry of loan modifications. You must protect yourself, I'll say that again YOU MUST PROTECT YOURSELF. Take the time to do your due diligence and investigate the company that you are considering doing business with.

I do not want you to misunderstand what I am saying, everyone is not bad however most of them are. A few bad companies have damaged it for the good ones. Many so called modification companies have imploded and gone out of business leaving many people like you high and dry. People who have paid for modifications and are now waiting for it to be completed. Unbeknownst to them that modification company is out of business, now they are looking foreclosure in the mouth.

You may ask yourself who do I trust, who should I work with, who is going to get me the best option. Most people think an attorney would be the best way to go, well that is only part of it. Most attorneys have no idea of how to negotiate properly with the mortgage companies nor do they speak their language to get the best offer for you. Then you may think a firm that specializes in negotiation with the mortgage companies. First of all good luck in finding that company. Really what you need is both. A good negotiator can get in the door to speak to the right person and get all the imperative information that is necessary to make your modification effective. When the negotiator hits a wall the company needs to be able to have a qualified attorney keep the ball rolling so you win in the end.

Then there is a third option, a free program or do it yourself. Have you ever found yourself trying to cut a corner or save money by using a free or do it yourself option and wind up spending more money trying to correct the mess. I am not saying that there is no success if you do it yourself or utilize some free option assistance organizations. Remember the old saying, "you get what you pay for", it still holds true hear. There is a lot of free assistance out there however there is not enough funds to pay qualified, quality individuals to provide that assistance. In the state of New Jersey millions of dollars was set aside to hire individuals to assist in getting foreclosure under control, offer between $8-$12 and hour. Have you ever tried to get great service at McDonald's? Would you put your home in the hands of a "may I take your order" employee. Take the time and do your homework.

So I venture to say you can't have one without the other, negotiators and an attorney network. Having both of these in place doesn't necessarily guarantee a modification, because ultimately your mortgage company makes the determination of who (gets modified) and how much (reduction of principle or interest rate). No one, I repeat, NO ONE can tell you how much your payment or interest rate will decrease. If they do, it is a lie. Here are some helpful hints when you are considering a modification company:

Now don't just go to anybody investigate a few areas:

Are they regulatory compliant in all 50 states

Length of time in business doing loss mitigation

Who is running the company and their background

The track record. Can THEY provide Referrals?

Before you spend a dime, can they give you a written guarantee

Are they giving you a guarantee, either the modification will be done GUARANTEED and/or any money spent will be refunded back to you if it is not modified

The most important of all of these; can you track your progress yourself with a system you can access 24/7. Although updates don't happen everyday you should be able to see you progress and communicate with your negotiator via phone or email.

Unfortunately you may not find out you are losing your home until it is too late. Do your homework and your due diligence, don't be a statistic.