Do you need to PAY for a Loan Modification?

I recently received an advertisement in my email that said "Learn how to Create a Loan Modification business and earn 'lazy money'".   I was horrified.  Is this the new way to prey on homeowners in distress?  Does paying for Note Modification assistance increase your liklihood of getting your Note Modified? No.

Lenders have specific requirements that must be met to obtain a Note Modification and specific documents that must be provided to support your request.  I have coached several homeowners through the Note Modification process at no charge and can state unequivocably that no one cares more about the Note Modification or is more diligent about follow-up with the lender than the homeowners!

All the homeowners need for a 'self-help' Loan Modification is:

• The specific documents required by the lender
• Help demonstrating the current hardship and, equally important, the long-term ability to pay the modified mortgage going forward
• The specific process, timeline and potential road-blocks
• Someone to call when they hit a wall or get frustrated

The charge for Loan Modification services appears to range from $2,000 - $3,500 or more and, yet, it only takes a one-hour appointment and availability by phone to provide those services.

I am often asked why, as a realtor with a 20 year background in lending, I would offer this service for free when I could easily charge for my expertise.  The answer is simple.  Some modifications aren't granted and some homeowners will need to sell in order to avoid foreclosure.  If I honestly and diligently do everything I can to help them SAVE THEIR HOME, they will trust that the ultimate sale was truly in their best interest. Those that DO receive Note Modifications are my most outspoken referral sources and I couldn't be happier that they didn't have to sell.

It is true that some homeowners simply don't have the time or patience to tackle this task on their own and would prefer to pay someone else to take on the responsibility.  There ARE good people offering Note Modification services for a fee but it can be difficult to sort the good from the bad.  The California Department of Real Estate has issued a Consumer Alert regarding Loan Modification Services which offers some good tips for evaluating the service providers.