Loan Modification Companies- 4 Tips To Help You Find A Legitimate One

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The current mortgage and housing crisis has resulted in an increased demand for loan modifications.  To meet this demand, new loan modification companies and services are cropping up everywhere.  While some of these services and companies are legitimate and may be able to help you with your loan modification, others are not.  There are scam artists out there looking to take advantage of struggling homeowners who are in fear of losing their homes.  They offer big promises and guarantees but are only there to take your money.  Other companies may not be out to scam you, but they really don't have the sufficient experience to effectively help you.  So how do you tell if a loan modification company is legitimate or not?  Here are 4 tips to help you.

First you should check to see if the loan modification company has any association with any lenders or banks who offer loan modifications.  In particular, it will be helpful if the loan modification company has an association with your particular lender since they will be working on your behalf to help negotiate a loan modification for you.  If a loan modification does not have relationships or experience working with lenders then you should not work with them.

Next you need to research the company's experience and qualifications.  You will want to know if they have experience with loan modifications.  Ask for references.  Also find out what the employees educational and professional backgrounds are.  If the company cannot provide references or point to their experience and background with loan modifications, you should avoid them at all costs.

Third, the company you are considering working with should have a physical address and you should check to see whether or not the company has the proper licenses required in your state for loan modifications.

Fourth, look out for any company who is offering guarantees or big promises.  No legitimate loan modification service will offer you a guarantee that your loan modification request will be approved.  A loan modification will depend on whether you meet the lender's eligibility requirements and the final decision rests with your lender.  Also be very wary of companies who require large upfront payments.

There are some legitimate loan modification companies and services out there that may be able to help you, but you must do your upfront research to make sure they are legitimate.  Another option available to you is to spend that time learning about the loan modification process and dealing with your lender directly to request a loan modification.

Comments (2)

Edward moloney
Edward Moloney Loan Officer GMH Mortgage Services - Holliston, MA
Loan Officer Providing 5 STAR SERVICE

Chris, My thought is that people can do this on there own and not through a company. What are your thoughts

Sep 16, 2009 02:53 PM
Shellie Alicia Carter
REAL. | Realtyka, LLC - Maplewood, NJ

Hi Edward, I put up a site to offer loan modification services to homeowners for free and was surprised that more of the people who contacted me just simply didn't want to do it. 

What is sad about the modification process is that the system is designed so that homeowners can move through the process without our assistance.  But all too often homeowners are treated so poorly by the representatives - lied to - disrespected - that they get to a point where they just don't want to be bothered any more.

In New Jersey where I am there are quite a few [good] rules that govern how we do business.   Chris nailed it down when he said we need to check on the legitimacy of our service providers.  It two me two or three tries to find companies that were legitimate and committed to helping clients.

In the end I just took a processing position with an attorney here in New Jersey.  It took several interviews to find an attorney that actually did the work for the client.  Many attorney's charge clients $3000 and they don't even do the work. I began to identify with the pain my clients were feeling.  In the end I found someone that I am proud to work for.  Our clients need to put in the same effort. 

There are a lot of good companies out there doing good work.  I hope our clients take your advice and choose carefully.

Sep 19, 2009 06:45 AM