Should You Modify Your Own Loan?

There is no simple answer to this question, but generally someone who is a good candidate for modifying his or her own loan is organized and persistent.

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Modifications are getting easier, especially with the tools that are currently available to simply the process, since regardless if you are a homeowner or a professional, you MUST know how to speak the lenders language in order to get the best results. It must make financial sense to them, its not just what works for you, so if you know what to expect ahead of time you will be at a huge advantage and know if it is even worth pursuing!

When we started in 2008, HAMP wasn’t yet created and loan modifications were calculated by hand, based on trials and error and eventually discovering patterns that we could identify that got positive results. Back then, we were effectively using audits and getting principal reductions frequently, so I would have recommended a professional to get you better terms, rather than you experimenting with your home and putting it at further risk. But, now many things have changed.

Now, if you hire a pro, make sure you get a good one! There are a lot of bad ones out there just trying to make a buck on people who are in a very vulnerable situation. Our team has reviewed over 700 companies and only a few have been able to provide written documentation of what they stated they could accomplish, so although they may have good intentions they may not be worth the investment. Think about it – if you are working with a loan modification company, you will have to send the same documents that you would otherwise have to send to your lender, so now you have to follow up with a 3rd party and your lender, which is a recipe for disaster.

If you do seek a professional help, it does not necessarily need to be an attorney, unless perhaps you were a victim of shady lending practices or predatory lending. Again you want to ensure the attorney has a clean record and is experienced. Most attorneys do not like to take on foreclosure defense cases because it is a LOT of work, so be prepared for a long costly battle and NO guarantees.

If you’re in California, make sure you know about SB 94, passed October 2009, which prohibits companies from charging upfront fees, including attorneys.

We suggest taking the path of least resistance and focus on what works rather than reinventing the wheel. It seems like there are new strategies and companies popping up daily. Keep in mind if it sounds too good to be true then it probably is.

 

About Brett Robbins

Brett Robbins is the founder and CEO of The Homeowner Defense Network. The HDN offers systems that help homeowners discover what programs they may or may not qualify for and why in less than a week. The HDN also has a trusted network of mortgage relief service providers, and offers a proven credit education program.

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