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When to use a Loan Modification Services Provider

By
Services for Real Estate Pros with S.P.O.C.H. a 501c3 Charitable NP

Is your mortgage loan at risk of default? Foreclosure?

Has your lender turned you down for a loan modification? 

Your loan servicer's boondoggle and backlog may be easing

up a bit, so you should renew your request for workout

consideration, but don't be suckered into thinking you

must use a loan modification service promoted on radio, TV,

or commercial web sites. 

 

Most lenders and consumer credit counseling organizations

(both for-profit, and nonprofit) will guide qualified homeowners

through the loan modification application process at little, or no

charge... for the asking.  But not everyone can be helped by traditional

counseling efforts.

 

For example, if you have been disqualified for a loan modification,

you may need specialized advocacy services which

challenge the lender's practices.

 

  • Have you been a victim of predatory lending?
  • Do you have an adjustable rate mortgage?
  • Have you been denied a Loan Modification?
  • Did the loan officer accurately disclose the loan terms to you?
  • Did you sign a separate broker fee agreement?
  • Do you owe more than your home is worth?
  • Was your home's value inflated by the appraiser?
  • Did the lender fail to verify your ability to repay the loan?
  • Were you given all federal and state disclosures in a timely fashion?
  • Were you properly notified of your right to cancel the loan?
  • Do your loan documents contain any technical errors?
  • Were you charged excessive or undisclosed fees?
  • Has your loan been sold without your knowledge?
  • Have they "lost" the note with your original signature?

Unconventional foreclosure defense options may not be readily available from, or

even endorsed by HUD or other lender-sponsored default services providers.

 

Before you engage a loan modification service provider, you should

exhaust your self-efforts with your lender's loss mitigation department.

 

But if your lender turns you down... it may be time to explore alternative

strategies.    E mail for more information:  info@spoch.org

 

Comments(5)

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Debra Kukulski, Broker Associate
RE/MAX Suburban - Cary, IL
SRES;SFR,CDPE;GRI;ABR;e-PRO Realtor, Northern IL

HI David, great post.  Everyone is talking about these mortgage modifications, but I have heard they rarely get done.  What has your experience with these been?  Do you always advise the homeowner to contact the lender personally first?

Mar 31, 2009 02:41 AM
David Petrovich
S.P.O.C.H. a 501c3 Charitable NP - Oakhurst, NJ

It has been my organization's practice to encourage and empower self-help.  I also recommend anyone facing mortage foreclosure read Fight Foreclosure! in preparation for the struggle ahead.

I've been facilitating loan mods for more than 20 years... but have never seen the loan servicer boondoggle we are seeing today. 

In the dozens of forensic loan audits we've completed recently, only two or three came back as  "clean" and free of lender non-compliance to state or federal lending law.  

Our approach is to offer the lender an easy way out, to avoid litigation, and arrive at a mutually  benefical workout scenario. 

Lenders have been slow to acknowledge or even admit their mistakes... but seem to be more willing to modify loans for previously "unqualified" homeowners.  Coincidence? 

 

 

 

 

 

 

Mar 31, 2009 04:21 AM
Kate Bourland
Marketing with Kate - Redding, CA
Onlilne Marketing Mobile Marketing

I agree, we are seeing lenders starting to be easier to work with.  They still don't get it but there is so much clogging the system. 

Mar 31, 2009 04:51 PM
Debra Kukulski, Broker Associate
RE/MAX Suburban - Cary, IL
SRES;SFR,CDPE;GRI;ABR;e-PRO Realtor, Northern IL

Very interesting!  It does seem like some of the banks are expediting short sales a little more quickly.  I am finding it really has a lot to do with how much the listing agent actually knows what they are doing when presenting a short sale offer to the bank.

Apr 02, 2009 06:54 AM
Nate Garvin
NRG Marketing Solutions - Folsom, CA

Loan modifications are going to be around for a long time. I hope we can all keep up with the changes and make this service available to our clients. Not everyone needs help with their modifications. But there are a lot out there that do.

Apr 13, 2009 11:57 AM