You need some help. You’ve heard lenders everywhere are modifying mortgages for those in trouble. So you call yours. You wait on hold for 45 minutes. Someone finally answers, speaks to you for 15 seconds, and promises to send you a form. And there you are, days later, formless and your next payment due with no help forthcoming.
Treasury Secretary Henry Paulson has pretty much consigned troubled borrowers to the trash-heap, claiming, ““We’re never going to be able to process the number of workouts and modifications that are going to be necessary doing it just sort of one-off, I’ve talked to enough people now to know there’s no way that’s going to work.”
If you look online you’ll find hundreds of firms promising to work with your lender and get you the help you need. For a not-so-small upfront fee, of course. Is it worth it?
Look out for phonies. Mortgage modification is a new field and there are no licensing requirements, oversight boards, etc. Anyone can hang a shingle and claim to be a modification specialist. Recently, two California firms were shut down for perpetrating fraud on their clients. However, some professionals do have a code of conduct and board they answer to. Attorneys, CPAs, Certified Financial Planners, and nationally-regulated credit counseling or debt settlement firms have standards of ethics that at least in theory preclude them from making promises they can’t keep or ripping you off.
When You Have a Need for Speed
Attorneys who offer modification service claim that their calls get answered and their letters responded to more readily than those of consumers. If you are on the brink of foreclosure and need help fast, it may be worth it to engage a lawyer with a good reputation. Beyond making contact with your lender, negotiating changes to the loan, and in some cases financial counseling, a reputable firm cannot make any guarantees. For example promising a $100,000 principal reduction or a 3% lower rate is a red flag that should have you running.
Beware High Upfront Fees
Avoid any outfit that wants a large fee before doing any work; these are non-refundable to you even if there is no progress in your modification. And that’s money you could be using to pay for necessities when you’re pinched for funds.
Try DIY or Non-profits First
An online search turns up all kinds of examples of hardship letters and instruction for making your request to your lender. Before contracting with a for-profit company, at-risk borrowers should contact their lenders or the Homeowner’s Help Hotline (1-888-995-HOPE) run by the Homeowner’s Preservation Foundation. They might get a comprehensive, affordable mortgage modification that won’t cost them a dime
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(3 votes, average: 5 out of 5)
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