Hire Attorney or Loan Modification Company?

Real Estate Broker/Owner with Property Xchange Solutions Property Wholesaler

These questions are coming up more often than I expected. Homeowners are becoming more and more aware and are doing research to make sure their hard earned money will be an investment rather than a loss due to hiring an unscrupulous company.

What is the difference between hiring a licensed Attorney and an" Attorney-based" company?

Which is more affordable and/or beneficial?

Can't I just work with my lender?

I am here to state facts. Distressed homeowners usually end up contacting me for advice because they Know I will deliver honest answers. Sometimes you will not like what I have to tell you but will appreciate my being straight forward.

If you would like some assistance in locating an affordable, established, and reputable Attorney, (with credentials and a money back guarantee) feel free to contact me.

 Okay so let's address the first question: What is the difference between hiring a licensed Attorney and an "Attorney based company" to handle my loan modification  needs?

1a. Attorneys have experience in analysis and arbitration necessary to reach a fair agreement. You will obtain legal representation and consultation with a licensed Attorney that will be fully disclosed in your Retainer Agreement.

1b. Loan modification Companies usually consist of former loan officers, brokers or processors. An Attorney may be A phone call away if advice is needed, but in most cases your contract will not consist of Attorneys and will  deflect any legal advice. This term, "Attorney based" is being widely abused.

2a. Lawyers must be licensed through the state in which they practice and each state keeps a file of the lawyer’s credentials.

2b. Loan modification companies usually only consist of an LLC license, maybe even incorporated.  This does not at all imply they are familiar and abide by laws and regulations. It simply means they have acquired a business license.

3a. Attorneys are retained to fight and negotiate on your behalf as well as advising you of your options that are in your best interest and are closely monitored by the Bar Association.

3b. Loan modification companies often attempt to scam borrowers by accepting money or fees for loan modification services and then rejecting any type of loan modification that is plausible for the borrower,  or imply minimal work on a file and  do not implement negotiating tactics  which will end up in less favorable results for the homeowner.

4a. Attorneys have a lot more at risk. Example: Schooling, licensing, establishing a Firm. The need for third party interference for loan modifications are temporary. They know this so why risk an entire establishment over an economy phase?

4b. Loan Modification companies were established recently due to the foreclosure crisis and has been abused. Many are in it for  the short haul and to make fast easy money. Doesn't take much to establish an LLC or to destroy it and start over with  the new phase.

5a. Attorneys show a much stronger and threatening presence in front of the lender than a loan modification company. Lawyers know what is required of the lender by law. Lenders will deal more honestly with a lawyer and be much more cooperative.

5b. Not all loan modification companies are bad but none of them  can offer the same degree of professionalism and the full spectrum of representation that a licensed Attorney can.

Very Important: "Attorney based" loan modification companies are not law firms. When you discuss the details of your mortgage with these companies, there is no attorney/client privilege. Any conversation you have with a non-law firm loan modification company is discoverable by a state agency and not protected by attorney client privilege and therefore not confidential.

Second Question: Which is more affordable and/or beneficial?

I think I answered which is more beneficial. But cost is most definitely a top factor in the equation.

In most cases you will find Attorneys to be a little more costly than loan modification companies.  But this can easily be argued if you calculate this over long term savings.

 Here is an example:

 You hire Attorney (A)to negotiate a loan modification that costs you $3000.(I know an Attorney that is more affordable but this is a typical fee)

You save $500 per month which adds up to $30,000 over a period of 5 years.  And the savings over 6 months would pay for that Retainer fee. (hypothetically speaking)


You hire a loan modification company who may charge $1500.(could cost up to $3,000 but $1,500 is typical)

 Being said that nearly 80% of loan modification companies  are fraudulent, the chances are very high for an unfavorable outcome which usually results in the homeowner out of $1500  and possibly losing their home.

But let's say you hire one of the "good "loan mod companies.  First of all, consider yourself lucky. Second, the chances of your results even coming close  to what an Attorney can do is almost nil to none.

Instead of saving you $500 they save you $300 per month. That is a savings of $18,000  over 5 years or a loss of over $10,000 depending on how you look at it.

 So my opinion is to invest in an Attorney to ensure most favorable results for You! $1,000 -$1,500 is not worth the risk to me.

Third (very commonly asked) question: Can't I just work with my lender?

Of course you can try to and I always suggest that you do before exploring  your options to hire outside help.

But in most cases you will find that you are being "put off", denied for ridiculous reasons,  ignored, or offered an undesirable plan. There is still that slight chance your lender will happily work out a plan that will be  beneficial to you. Therefore, I think it would be in your best interest to explore this option first.

It is imperative that you do not verbally agree or sign an agreement unless you are satisfied with the offer.  A lot of times, one of the stipulations will be that you will not be eligible for a modification for 12 months once you accept that offer.  And remember. your phone calls are monitored and recorded so be careful of what you say.

If you would like some assistance in locating an affordable, established, and reputable Attorney, (with credentials and a money back guarantee) feel free to contact me.


Important Links:

Pre-Approval Loan Modification Application


How to Avoid Loan Modification / Loss Mitigation Scams

Loan Mitigation Services FAQ's

Investors Facing Foreclosure

Why won't my lender won't work with me?

How to Prevent Foreclosure on Your Investment Property


C Thompson

Case Manager

Call me: 407-219-8739

Email me: cthompson@keepyourproperty.info


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Irene Tron
Valparaiso, IN

Thanks for a great explanation of terms and differences.  I'll be bookmarking this one for later reference.

Aug 05, 2009 12:56 AM #1



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If you would like some assistance in locating an affordable, established, and reputable Attorney, (with credentials and a money back guarantee) feel free to contact me. I need assistance in finding a lawyer in tampa fl

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Callie Thompson

Property Xchange Solutions
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