Here are several questions you should ask when trying to find a loan modification company and some key takeaways for how to get your home mortgage modified.
Many people are considering hiring a mortgage loan modification lawyer or company to help you with your loan modification, and the questions below will help you determine the good companies and the poor companies.
This is the first question to ask before you say anything specific about your personal situation. In most cases, the person looking for a loan modification will be scared or upset about their situation, and they will look for someone to listen to them explain their situation first. But resist that temptation.
Instead, you need to ask the loan modification company how do you know you can help me in my situation first. Then let them do the talking. They should explain how they can help you or not (without knowing your exact situation), what they look for in order to know if they can assist someone and what they have accomplished as far as results.
The more information on their mortgage loan modification program that you can get from them up front, before you tell them about your personal situation, the more you will get a good understanding if they really know what they are doing.
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Then be sure to follow up with their references first, before hiring the company. In most cases you will learn more from the three references that they provide you than you will from talking to anyone at the loan modification company. You will learn what the process was like, what their overall impression of the company and process was, and be sure you ask the question of was the modification worth it.
In the loan modification process, there is typically an “easy way” to modify the loan and a “hard way”. The easy way is that the loan modification company starts talking with your mortgage lender or servicer and then negotiates out a loan modification that will be based on the amount of monthly payment that you can afford based on your “hardship” case. Sometimes these types of loan modifications can be completed in a matter of minutes and really don’t involve any kind of renegotiation of the loan (because there is not a principal reduction involved) but instead they just involve a modification of your payments. And for some type of situations, this type of loan modification is fine.
However, for other situations (as an example) for those families who are hundreds of thousands of dollars upside down on their house., the hard way of loan modification may yield better results. This hard way involves the loan modification company staff going through your loan documents to looking for violations of law and trickery that the lender may have used. Many loans do in fact have these types of violations and “the hard way” involves using these violations of the law as negotiation for a principal reduction or even a complete rescission of your loan, which means your entire loan is rescinded and you will no longer even have a mortgage and you will need to get a new loan.
That is correct, this this is not the first question to ask. While how much a company charges is an important question and you need to consider it, it is not the most important. The most important question and issue is whether or not they can help you, can they be successful at getting your mortgage loan modified and the question of how much do you charge for your service tells you nothing about if they will be successful or not.
In general you should expect to pay a fee up front, which will generally range from zero to $3,000 and also expect to pay a fee if they are successful, which will generally be 1-2% of your loan amount. Remember, how successful and how much help they can provide is most important. In other words, if a company offers to modify your mortgage for no money up front, but then they don’t end up being successful, it can be more expensive than if you paid $3,000 up front and a 2% of your loan amount as a success fee as you could lose your home, end up paying more money for many years as the loan wasn’t modified, etc.
This question will help tell you something about their overall experience and success rate. If they say that they have not yet worked with your particular servicer or lender before, then that needs to be an indicator that they probably don’t have much experience yet.
If they answer this question by telling you that they have a dedicated person to work with them at your lender that can be a good sign that the easy kind of loan modification will be more likely and easy, but the hard way of modifying a loan is still going to be the hard way because it is still going to involve attorneys fighting and arguing with other attorneys.
So, to summarize this, if you are currently looking into hiring a law firm to help you modify your mortgage, by asking these 5 questions you will learn how it is done, and you will be in a much better position to identify the good companies from the “bad”.
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