Loan modification services are companies that homeowners hire in order to help them negotiate a loan modification with their lender or servicer. While modification services might be a good option for some borrowers, they (the borrowers) need to keep in mind that they themselves can do most if not all of what a modification company can do.

Do You Need Someone to Help You Get a Loan Modification?

Borrowers who are truly intimidated by the process, and are less than confident in their own ability to get done what they need to get done with the lender, are best to seek the guidance of someone who understands what needs to happen, be it a trusted friend or relative, a counseling service, an attorney, or a mortgage modification service.

Using Legal Aid or Attorney for Loan Modification

Hiring an attorney who understands how mortgage modifications work, can offer guidance, and write letters to the lenders as needed is also something to look into. In the face of what a mortgage modification service charges, having an attorney who can fill in the blanks for borrowers as they have questions is a great thing to have, if it is within the means of the borrower.

If hiring an attorney is financially beyond the means of the borrower, but they still feel that they need the advice of an attorney, they should contact local counseling services.

These local counseling services include Department of Housing and Urban Development (HUD) offices, or a local affiliate partner of theirs.

Those people should be able to put them in touch with discounted or pro bono legal services. To search for a local agency, borrowers should visit:

Mortgage Modification Companies & Specialists

Mortgage loan modification companies are for-hire companies that will work with the lender, on behalf of a borrower, in negotiating a loan modification. Often though, these modification companies charge high, and often upfront, fees and make no guarantee as to the outcome of their work.

As stated above, borrowers are usually able to do most, if not all of what a modification company can, without the often hefty fees.

What borrowers lack in experience though they can probably more than make up for in persistence and are most likely able to devote more time. Loan modification company employees are often overworked, and may have less than the same determination to get through to the right people at the lender than someone who may be on the verge of losing their home unless a loan modification agreement is reached.

What to Avoid in a Loan Modification Company

Of anything that a borrower should be aware of in a loan modification company, it is fraud. Yes, there are many legitimate and reputable companies that do good work for reasonable fees on the behalf of their clients.

But just as with any industry, there is a segment that looks to exploit clients that are less knowledgeable about the process of loan modifications, and desperate to find a way out of their situation.

One good way for a borrower to avoid fraud is to thoroughly research any company they do business with. The Internet is one such way, as there are many resources available, as well as blogs where former clients write about their experiences.

If at all possible, borrowers should avoid paying in advance for loan modification services. Paying in full for services ahead of time, when the loan modification company is unable to even guarantee a specific outcome, is unwise on the part of the borrower.

An attorney will often require a retainer before undertaking work on behalf of a client. Borrowers need to be clear, before they pay a retainer, of their expectations as to what the attorney will do, and if the attorney will be paid in full only on completion of a successful modification.


Published on January 28, 2014