Loanmod Approval

Loan Modification: Who can you really trust?

In the sea of rising foreclosures, who really are the sharks? The banks or, the loan modification firms? Well, it seems every article you read or every time you watch the news, it’s about the housing market. And it’s never good news! Whether it’s the bank taking homes away from families or predatory modification firm taking thousands of dollars from desperate homeowners, it just seems as if everyone wants a piece of the action. The sad truth is, you can’t trust anyone but yourself. No one will work as hard as you because, no one has as much to lose as you do.

You have to ask yourself, why would any Loan Modification company want to help me? They’ve already taken my money!?!? What do they have to lose? NOTHING! The news is out that there are many companies over promising and under delivering and it has prompted The California State Attorney General’s Office to investigate and keep a closer eye on many of these companies, in which most operate out of the state of California. Many companies have already been forced to shutdown and several arrests have also been made.

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Brown Orders Mortgage Foreclosure Consultants to Post $100,000 Bond or Face Prosecution

Threatening possible criminal and civil prosecution, Attorney General Edmund G. Brown Jr. today ordered 386 mortgage foreclosure consultants to post $100,000 bonds and register with his office. 

He also ordered more than two dozen companies to justify suspicious loan modification claims made in “slick advertising,” online and through the mail…” to read more, Click Here.

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This is not to say all loan modification firms are crooks. Unfortunately, it’s the bad ones that you hear about. But, if you have decided to hire a firm, there are a few things you need to be aware of:

• Beware of firms advising you not to make any payments while your modification is in process. What happens if they deny you for a modification? The banks will demand that you pay the total past due to bring the account current. Otherwise, the banks will have the legal right to proceed with foreclosure.
• Beware of firms promising rates or payments. No one can guarantee a rates or payments, not even your bank.
• Beware of firms or individuals who claim they’ve been in the business for over 10+ years. The word “Loan Modification” was barely on the radar 3 years ago. Most banks weren’t even offering modifications 5 years ago, let alone 10 years ago.
• Beware of firms that claim they can add or remove someone from your loan. That can only be done through refinancing or assuming the loan. And, it’s very rare that a bank will allow anyone to assume your loan.
• Beware of firms that promises to get you a modification completed in 30 days or less. You may be able to get set up on a trial plan or a repayment plan within 30 days, but, most modification reviews take an excess or 90+ days. I’ve seen Chase and Bank of America take as long as 1 year.
• Beware of firms that promise principle reductions. Lenders are in the business of making money, not losing it. A principle reduction is an automatic loss and if they agree to do that, then they would just consider foreclosing on the house. Most of the time principle reduction must be approved by the investor of the loan but, many banks are doing principle deferment instead.
• Beware of firms promising that you will get a fixed rate. Although, some lenders will consider fixing your rate, most lenders are approving step rate modifications instead. Loan modification companies cannot guarantee fixed rate.
• Keep in mind that just because you retain an attorney firm to help you with a modification, the attorney may not have any involvement in the process. Like most loan modification firms, only the processors will be handling your file.

Believe it or not, many of these companies know just as much or as little as you do. Also, a lot of what modification firms do, you can do yourself. Don’t believe everything these firm tells you. Remember, many of the reps that you initially speak to are sales people. They are simply trying to make a sale to get paid on their commission. Many of the sales people that work for loan modification firms are the same people that put you into the toxic loan in the first place. But, if you have done your research and have decided to hire a firm, then understand that there are no guarantees and you really can’t fault the firms if they are unsuccessful in helping you. You may want to look into their refund policies before you hire them.

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