Okay let's cut right to the chase. This new vehicle that promises to help homeowners who are in financial trouble avoid foreclosure and save their homes -- known as loan modification -- sound like it might be the real deal.
And it makes sense. It basically plays off the fact that the banks are completely desperate to avoid foreclosing on properties, and they're willing to work with people who are having trouble, or may have trouble in the near future, meeting their mortgage obligation.
It makes sense for the banks, it makes sense for the homeowner, and it makes sense for the economy.
So if loan modification makes sense, why is everybody going out and having success doing it?
Now I don't know for sure, but I think that one of the reasons is probably because a lot of homeowners are trying to do this on their own with out the help of a professional -- someone who knows what they're doing.
And I think this is because a lot of people have been scared off of hiring a lone modification specialist, because if you morons in the news media have gotten the story all wrong. Here's what I mean...
Back before the economy totally hit bottom, a few people tried loan modification with their bank. Now, because things weren't nearly as bad then as they are now, the banks were far less willing to work with people and to really substantially lower their rate.
So what did you get? You got people who said they were successful in getting a loan modification, but who in reality only got a very very slight reduction on their payment. So of course it wasn't going to help them very much.
In recent months, lots of loan modification companies have sprung up. And this is sparked all new round of controversy. The problem is, that a lot of these companies are simply rehashed mortgage hacks looking to replace their lost income since no one is looking for a new mortgage anymore.
And these know nothings are giving the legitimate companies in the industry a bad name. Here's what I look for when choosing a loan modification company. You're free to do what you want but these are the criteria I would hold anyone I hired to:
Make sure they do loan modifications and only loan modifications. You want someone who specializes in this day in and day out. Who knows how to negotiate with the banks and who knows how to get you a true reduction. Don't hire a divorce lawyer to do a loan modification.
Make sure they're a lawyer. I mentioned tired old mortgage hacks above. Don't hire the same guys that got us in this mess to get you out. It's like asking the fox to guard the henhouse. Enough said.
Get a guarantee. Anyone who does business, no matter what that business is, will offer a guarantee if they stand behind their product or service at all. If the loan modification company you're talking with doesn't offer a guarantee, go with someone else.
Get proof. Again, anyone who's been successful in getting loan modifications for their clients will have a paper trail. Ask to see it. Not only should they show it to you, they should offer to show it to you before you even ask. This is the mark of someone who is not afraid for you to look at the results they've already gotten.
I hope all this helps.
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494
Date Published :
Feb 18 2009