Legitimate Reasons Why You SHOULD PAY For a Loan Modification
It’s been almost a year since my last post regarding Seattle loan modifications. Get ready for a new perspective.
In the last 11 months, I’ve realized that many, many homeowners out there simply do not have the capacity to negotiate their own loan modifications. Here is why:
1. They do not find HUD agencies helpful (not to say that they aren’t, but many homeowners have had this complaint)
2. They are under too much stress and end up arguing with HUD or loss mitigation (thus ruining their chances of successfully negotiating a loan mod)
3. They do not have the time to negotiate their own mods and end up going back and forth with lenders for many months.
Many of these homeowners end up turning to short sale, only to realize a couple days before the sale that they could have qualified for a loan modification. Better yet, they may have been qualified for rates better than what was originally offered.
One thing homeowners must realize is that lenders are NOT NEGOTIATING IN YOUR BEST INTEREST. IT IS NOT IN THE LENDERS INTEREST TO GIVE YOU THE BEST TERMS FOR YOUR MODIFICATION, BUT RATHER, THEY WILL PROBABLY BEGIN WITH THE WORST.
Moreover, lenders will do the following to “encourage” (scare) homeowners into coughing up as much money as possible:
1. Requiring the homeowner to pay their arrears in full before pursuing a loan mod (this is not a requirement for most lenders and is often a flat out lie)
2. Offering very short term loan modifications (often they are just forbearance agreements)
3. “Hard balling” in their communication with the homeowner (being unresponsive or evasive).
After seeing countless complaints, failed loan mods (even those that were negotiated by ATTORNEYS) & other horror stories with seller-negotiated loan modifications, I decided to search for a SOLUTION.
I spent many months carrying out my due diligence in search of legitimate, for profit loan modification companies. I contacted the Department of Financial Institution regarding their opinion on certain loan modification practices (The Department of Financial Institution is the very institution that regulates what for-profit loan modification companies can and cannot do in Washington State). I studied the interpretive statement released by the DFI addressing everything from how much a loan modification company can charge up front to how they are to bill for their services and what those services must entail.
After months of researching, interviewing and investigating different companies, I finally found a mortgage company with a loan modification division that can do the job. They now process all loan modifications brought in by my company. Here is why I trust them with my clients:
1. Their pricing is based directly off the DFI released interpretive statement (you can download this below).
2. They have a powerful track record of successful loan modifications with virtually no consumer complaints.
3. They are all licensed mortgage officers (DFI requirement)
4. Should a homeowner decided not to move forward with a loan modification prior to negotiations, they will return the upfront fee and retain only a $75 research fee. The upfront fee is deposited in a trust account, to be released only upon completion of the phase. This is important, since loan mod scam artists will often collect an upfront fee and simply run away with it.
Here is a link to the DFI interpretive statement that I am referring to:
If you are not sure whether a short sale is right for you and would keep your home if the mortgage was more affordable, it is absolutely imperative that you first explore the loan modification route. Do not short sell your home if it`s not in your best interest! A loan modification by itself will not damage your credit, unlike short sales. It is extremely important to make sure that you`ve eliminated all other options before pursuing the short sale.
KEEP IN MIND THAT A SOLID FOR PROFIT LOAN MODIFICATION CAN NEGOTIATE INTEREST RATE REDUCTIONS FOR THE ENTIRE LIFE OF THE LOAN. Loan modifications should NOT ALWAYS BE SHORT TERM. Our partners have done everything from 5 year arms at an extremely low rate (rates do not revert back to original rate, but according to LIBOR) to 30 year fixed.
Click this link to obtain immediate, professional consultation regarding your loan mod. Make sure you read the disclaimer; Homeowners can often figure out whether they are candidates for a loan modification based on the disclaimer alone.
If you are an agent, I highly recommend having your homeowners pre-screen for a loan modification before pursuing a short sale (that is, if the homeowner has expressed interest in keeping their home). It is a grand waste of time for everybody involved if the homeowner is qualified for a loan modification and ends up realizing that only a few days before the closing date on your short sale.
Take advantage of the resources around you and do something about your situation. Continuing to miss payments without a plan of attack is a perfect recipe for a foreclosure. If you do not have the time, resources and the general capacity to negotiate your own loan modifications, then work with professionals who can. It is never good to simply allow your property to go into foreclosure.
Thus concludes my take on for profit loan modification companies.