Do Your Own Loan Modification, Why Pay?

By
Real Estate Agent with Young Realty Group, Inc. BK3055753

I hope my blog reaches as many strapped homeowners as possible.  If you live in Florida and are looking at trying to save your home from foreclosure you have options.

First, you may contact your lender or if your lender hired a company like Titanium Solutions (Countrywide, WAMU and Litton) to facilitate a workout, assemble the required docs yourself.  This is no mystery on what the lender/servicer typically needs from borrowers but I will cover what I see typically requested:

Borrower Hardship letter, financial worksheet, last two paystubs, last two most recent bank statements, w-2's, last two years tax returns.  Ok, why a company would charge someone $$ to assemble your paperwork is beyond me.  DO IT YOURSELF.  The catch here is you have to have income to show the lender you can afford the modification.  Any company who claims to be able to work a loan modification and charges you an advanced fee is out of line.  Each servicer and investor for your loan has a different requirement.  Don't think for one minute that these are cookie cutters and work smoothly because they are difficult.  Put as much time into working out a loan modification as you did getting the loan in the first place.

 Lori Young, Realtor and CDPE

 

 

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Topic:
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Location:
Florida
Groups:
Short Sales Specialists
Short Sale Specialists & Pre-Foreclosure Education
Realtors®
Foreclosure Help and Prevention
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Rainmaker
204,408
Mike Jackson
Bradley Real Estate - San Rafael, CA
Realtor - Certified Distressed Property Expert

Great point Lorri. A lot of homeowners dread calling their mortgage company because they know they are going to ask them about their hardship and why they are behind. If they can overcome that they could possibly modify their own loan.

Mar 04, 2009 06:50 PM #1
Rainer
68,892
Lori Young
Young Realty Group, Inc. - Naples, FL
Broker/Owner

You can on most sites pull of the packages, fill them out and fax to the servicers number.  The servicer is not the judge, if the borrower feels like they are having a hardship then they are having a hardship period.

Lori Young, Realtor and CDPE

Mar 04, 2009 06:54 PM #2
Rainmaker
453,505
John Mulkey
TheHousingGuru.com - Waleska, GA
Housing Guru

Lori, it's unfortunate but the vultures come out when they smell food--or in this case money.  I've tried to spread the word on this problem, but many don't hear it. Unscrupulous companies are preying on those with the least ability to afford it, many times charging several thousand dollars for nothing.

Mar 04, 2009 07:10 PM #3
Anonymous
Anonymous

Lori, good point. Very easy but few home owners actually know it. Actually, I was talking to another realtor today and even he does not know this.

Mar 04, 2009 07:12 PM #4
Anonymous
Craig

Everybody thinks they know all about how easy it is to do loan mods themselves.  Why do I read that the national avg of success for the do it your selfers is only 20% & that many of those get minimal or only temporary reductions in their payments.  Could that be why the national stattic for defalts after a loan mod is around 50%.  The process is similar to doing a short sale & I don't hear agents reporting that people should jump in & do those themselves.  The banks loss mitigation departments are typically going to give the least reduction possible & when people try to do it themselves that is they typically get. There is a lot more to getting a successful significant reduction if payment than just turning in some papers.  If you have done a short sale negotiation you know how many times you have to keep calling the lender & sitting there on hold.  How many home owners have that kind of time?  How many home owners even know that they should not talk to the servicing department because it is a wast of time?  You have to get escalated up into the loss mitigation or loan modification department.  I have personally talked with many homeowners who have tried themselves to do a loan mod for months & months & got absolutely nowhere. If you want a maximum perm. reduction, with a high rate of success get a reliable professional.  And don't expect them to do all the work for free, give me a break.  If they succeed in getting you the max reduction, they are going to change your life.  That's worth something, don't call them vultures.  I do agree that some so called loan mod companies are vultures & do not perform what they claim.  So the owner should for sure check any prospective co. out as carefully as possible.  Some offer no money up front which may be ok, but how much confidence does that sound like they have?  Some charge up front money, but part or all is not refundable if they don't get you a mod.  No one should do that.  I found 1 that does charge an up front fee but has a 100% money back gaurantee if they don't get you at least 10% off your payment, but they avg 35 - 50% off & they have a 98 - 99% success rate. They get the owner 2 mo w/o payments after the mod, no one does that.  They are the largest mod co in AZ & growing fast. They do thousands of mods each mo. I spent months searching for a mod co that I felt I could referr clients to that needed this kind of service.  These guys beat everyone that I found hands down.  

We have a national epidemic of people in financial trouble, no one is helping by being negative about some of the people trying to help.  It's too bad there are some sharks mixed in the tank, but if we a carefull & use our heads I think we can navigate around them at least most of the time. Please feel free to e-mail me if you have an interest in the loan mod co that I found. CraigsHouseDeals@yahoo.com

 

 

Mar 05, 2009 05:51 PM #5
Rainer
68,892
Lori Young
Young Realty Group, Inc. - Naples, FL
Broker/Owner

Gov. Charlie Crist has signed the Foreclosure Rescue Fraud Prevention Act of 2008 that became law on October 1st of 2008 in Florida.  His intent was to stop companies from praying on borrowers who were given a promise to change their loans and charging lots of money up front for the service.  In Florida, the Attorney General and local police are always on the look out for these "rescue" companies.  My point is try and do it yourself.  If they can't pay their mortgage then how can someone ask them for $$$.  As a CDPE I hear of homeowners being told all kinds of information that just doesn't sound right.  We don't charge homeowners a dime.  My suggestion is to call and get the information yourself.  If you can't save your home, you have options.  Now more than ever the borrowers need to pick up the phone and make a call if they are having a hard time making ends meet. 

Ok so you had a bad call with someone a few months ago but today is a different day and tomorrow is gone.

Craig I appreciate your post and don't know what state you do business in but we have vultures coming out and it makes me sick.

 

Mar 05, 2009 08:24 PM #6
Rainmaker
289,867
Kate Bourland
Marketing with Kate - Redding, CA
Onlilne Marketing Mobile Marketing

Lori, Unfortunately you are right.  There are plenty of start up companies that only want to make a buck.

That said, putting together a successful loan modification package is more difficult than people realize.  Can it be done on your own, absolutely.  It depends on the lender.  Knowing how to package and present the financials is important.  Certainly try on your own as each lender is different.  I'm finding more and more homeowners turning to me after months of getting the run around.

If you are going to hire a company, make sure that they are attorney based and that they give a free, no obligation analysis prior to committing.  My company reviews the information prior to taking on the client.  If we don't think it can be done, we don't attempt it.  We also give a Guarantee if we do accept you as a client.

We've been doing this for 15 years.  Our success rate is 90%.

 

Mar 13, 2009 03:04 AM #7
Anonymous
Ricky

Hi all,

 

I went to work for a loan mod company a couple of weeks ago that is charging an upfront fee of 3000.00 and is law firm based. They want to take 450.00 of the monies no matter what and "promise" an interest rate reduction. If you want a pricipal reduction, it's 4 k and no refund if they are not succesful. It smelled bad and I never showed up again. I want to know if it is illegal to charge upfront fees in Fl. if it is attny. based? I googled a lot and there is tons of misinformation. A law goes into effect July 1 2009 preventing it? It's just a shame and I've had first hand experience with the process.

Mar 21, 2009 08:20 AM #8
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