Loan modification companies have sprung up like wildfires the past few years to fill a need to help homeowners negotiate loan modifications. While the majority of loan modification companies are reputable, there are a number of them that are not. Unfortunately, crooks have been preying on the misfortune of homeowners who are about to lose their homes to foreclosure. These shady companies are interested in taking your money and doing nothing to help you get a loan modification to save your home. So before you hire a modification company, it is a good idea to check them out with the Better Business Bureau and to verify references. Ask to talk to former clients to make sure they were satisfied with the modification they received.
Questions to Ask When Interviewing a Modification Company
There are some questions you should ask when interviewing a modification company to help you decide if they are legitimate. Move on to another company if they won't answer the following questions:
- How many successful modifications have they negotiated recently?
- What are their fees?
- Experience and qualifications of negotiators.
- How long they have been in business?
- What services will they be performing?
Many states have enacted consumer protection laws stating that loan modification companies can only charge a fee after they are successful in obtaining a modification for you. You should check your state laws, or talk to an attorney. Also no company can guarantee you a modification. Even if you qualify because your debt to income ratio is under 31%, which most banks require, there are other factors that banks take into consideration. The only company that can promise you a modification is your bank. If anyone asks you for a large upfront fee that is also a red flag that they are probably a scam artist. An attorney is the only person who can ask for an upfront fee known as a retainer.
Modification Company vs. Modification Attorney
A reputable modification company can help you negotiate a modification with your bank. Many modification companies employ mortgage brokers and some have attorneys on staff or on retainer. However, an attorney can do more than just negotiate your modification. The modification attorney can conduct a forensic loan audit by reviewing your mortgage documents to look for violations committed by your lender. The attorney will use the information as leverage in negotiating with your bank to get you more favorable loan modification terms. The attorney is the only person who can give you legal advice and legally represent you in court.
Getting Legal Help
The modification attorney understands the mortgage laws and the modification process. The attorney can negotiate the modification with your lender. You will get better service from your lender when you use an attorney because lenders know that you are serious about wanting to keep your home when you hire an attorney.
