10 Reasons You May Want an Attorney for a Loan Mod

The subject of distressed homeowners having to pay for an attorney is controversial for homeowners and professionals because for every loan modification company or foreclosure attorney that’s available to help you, there are 3 other sources (your lender, the government and the media) warning you not to pay anyone to help you with a loan modification.

Balance

The naysayers tell homeowners that loan modifications are free when their lender or the government can help them. And, they say, that it’s illegal to charge for a loan modification.

But there are only half truths buried in these statements. While loan mods are technically at no direct cost to the homeowner when they work with their lender or a nonprofit government agency, there are a couple things to consider:

  1. The banks are lenders, and don’t have the homeowner’s best interest in mind. So, loan mods are often dragged out until a foreclosure sale date is set unless you prove that it’s in the best interest of the lender to modify.
  2. The government programs are only available to those who qualify under their strict criteria, so not everyone will be accepted.

The other statement that’s made often is that it’s illegal to charge for a loan modification. However, any compliant organization can charge for a loan modification. The federal government came out with a nationwide ban on upfront fees for loan modifications back in 2010, but attorneys were made exempt. As such, it is perfectly OK to pay a reputable, effective and reliable loan modification attorney.

In fact, here are 10 reasons why you may want to hire an attorney for a loan mod:

  1. Banks have illegally foreclosed on millions of unsuspecting homeowners that thought solely relying on their bank to help them was the right thing to do.
  2. Banks are known for erroneous denials, and not giving you the best loan modification option.
  3. The bank has attorneys, so you should have one, too.
  4. One seemingly minor mistake can cause your application to get denied, such as a missing page, signature or number.
  5. Working with an attorney typically results in a faster response from your bank and a lower payment, because they take you more seriously.
  6. Peace of mind knowing you have professionals who understand your rights as a homeowner.
  7. The only way to get a substantial settlement is by having an attorney in your corner who knows compliance and the law.
  8. There are hundreds of guidelines in order for you to qualify for the government modification programs, which is why the majority fail.
  9. Putting together the perfect “bank ready” package is complicated, and most homeowners lack the experience. Your package needs to be 100% complete with all the right numbers in place to qualify.
  10. Homeowners that work with their bank on their own often fail or re-default again, so getting the right help results in a higher success rate and lower payment.

Your attorney can also work out a monthly payment plan for you that’s doable until you get approved for a lower mortgage payment.

Remember that prior to paying anyone to help you, it’s important for you to be aware of the regulations associated with loan modifications, because attorneys, loan modification companies and even your bank — especially banks that received bailout funds from the government — are all regulated in some fashion.

But unfortunately, the loan modification and foreclosure industries have been and are still very complex, which is why most homeowners that attempt to make it on their own fail or seek the wrong kind of help.

I hope these 10 reasons for seeking an attorney will help you be successful in your load mod journey.

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