Recently there have been warnings by many in the government and the media regardiing the services of loan modification companies.
I for one agree that the newest mortgage meltdown crisis has given way to a new group of would be predators. But I differ greatly on how to handle this problem.
It is my opinion that the Federal Government should enact legislation governing the operation of these companies with regards to their ethical and fiduciary responbsibilities, as well as the ability to collect fees.
Instead of restricting the operation of loan modification companies, I believe their work should be encouraged, regulated and monitored.
Due to the stalling and uncooperative nature of MOST lenders and servicers there is a tremendous need and many benefits to having these companies available in the market place today.
Consumers have always benefited from having as many choices as possible in the market when it comes to service providers and I don't believe that this industry should be any different.
Many loan modification companies are run ethically and employ highly experienced finance and real estate professionals with years of banking, loss mitigation and loan workout experience.
If the government is going to get involved in oversight of this new business model, it should do so with an eye towards opening up competition and protecting the consumer simultaneously.
The current RUSH to curtail the operation of such companies will hurt consumers in the long run.
For example the State of Washington DFI has put rules in place as follows: "The Department of Financial Institutions (DFI) has received a number of inquiries regarding the legality of providing this service in this state. While there is nothing inherently illegal about this business, those providing this service in the State of Washington must be licensed as loan originators, mortgage brokers, or consumer loan companies and be overseen by the Department of Financial Institutions."
In other words, you MUST use the services of the same guys who put you in the loan in the 1st place.
Didn't "The Department" have oversight responsibilities on this same group that should have prevented the mortgage meltdown in the 1st place?
Is it me? Or do you also want to climb the mountain and SCREAM - ARE YOU PEOPLE OUT OF YOUR MINDS?
I have a GREAT idea, why don't we have some hearings on the hill that matter. Call in some of the more prominant loan modification, loss mitigation, finance, and real estate experts and figure out how to craft meaningful legislation that will allow loan modification companies to help consumers under the law, with strict oversight.