Loan Modification Firms: The Leading 11 Concerns to Ask Before You Employ A Professional To Negotiate With Your Bank

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Most homeowners that are experiencing financial difficulty have probably heard of loan modifications by now. My Personal Experience with Financial Hardship and Loan Modification

If it is a brand new company, or they just started doing loan modifications, you want to use more caution. 2.) What is the loan modification company’s success rate in achieving successful loan modifications?

Most loan modification firms will claim to have above a “90% success rate”.

That the company got a modification with a payment higher than before and the homeowner defaulted 3 months into it – is that considered a “successful modification”?

Any loan modification company that takes fees after they have a client’s budget and knows they can’t afford the payment, is inherently unethical.

If the loan modification company can’t give you a solid idea of what their real success rate is in getting quality loan modifications done that allow the borrowers to stay in their homes at their current income level, then you need to look elsewhere.

The loan modification company should be able to produce some documentation of the work they have done. A typical scam operation will use “generic” testimonials and loan modifications, or will take the liberty “As Seen on TV” because they talk about loan modifications on TV shows, but not that actual company.

Examine the answer to this one carefully, and try to get the loan modification company to answer it before they know about your situation.

Unfortunately, not every homeowner qualifies for a loan modification.

If your lender is not doing loan modifications at this time, you may not qualify. A competent, professional loan modification company, that does hundreds or thousands of loan modifications each month is going to have a general idea of what lenders are willing to do in terms of modification. 6.);Does the company offer a money bank guarantee for their services? Stories abound of people that were promised the world by a loan modification company, paid a fee of several thousand dollars, and ended up never hearing back from the company.

If a company does not offer a guarantee, or gives an excuse such as “..Some inexperienced loan modification companies do not have the skill to get quality loan modifications done, resulting in payments that are even higher than before!

Bear in mind that loan modification companies take significant risk in offering a guarantee. If your state requires that a loan modification company be registered, are they?

A good loan modification company will generally not charge an application fee, as their goal is to actually help people get their loan modified and stay in their home, not to collect as many application fees as they can.

Certain states such as California are regulated in how loan modification companies can take upfront payments. 8.);Will I be kept informed throughout the modification process? 9.);What other lines of business is the company in besides loan modifications? What lines of business were you in prior to loan modification?

When evaluating a loan modification company, the one thing you need to realize is that the businesses are typically small (less than 100 employees).

If a loan modification effort fails, you need to know what “Plan B” is.

Some loan modification companies offer alternate services, such as a Deed in Lieu of Foreclosure free of charge if the initial effort to modify the loan is not successful and the homeowner is unable to keep the house.

If a company has complaints it doesn’t necessarily mean they are a bad company, depending on their volume of transactions.