For many Americans loan modification has become a very popular foreclosure prevention mechanism. As real estate values continue their steep return to earth and sub-prime mortgage terms expire, homeowners are finding themselves owing more than their house is worth. As a result the Government has introduced legislation offering guidelines to financial incentives for the banks to stop foreclosure programs and improve the terms and conditions of the mortgage for the homeowner.
Nonetheless, many uninformed property owners have placed themselves in a stressful situation because they have chosen loan modification companies with no true expertise. In fact, many have employed the same real estate and mortgage brokers that put them in bad loans in the first place!
To protect yourself when applying for a loan modification, you need to follow some basic guidelines. These rules won't guarantee that you obtain the perfect solution but it should weed out the predators and scam artists.
1. Use Attorney Based Loan Modification Services
First, and most important, get an attorney backed loan modification from a firm specializing in these types of cases. Law firms have two basic advantages over a private loan modification firm; legal acumen and leverage. Law offices have a deeper knowledge of the guidelines and of the ramifications of any step.
Because of their knowledge of the law, they might get ways to solve the problem where other companies could not. Banks, lenders and servicers tend to pay more attention to communications from a law firm than from an individual home owner or a real estate or mortgage business. Only an officer of the court can threaten litigation or bankruptcy as a nuclear option should the lender choose to ignore your request. It's in many of their policies to be willing to be more flexible when negotiating with a law business because they understand that law firms are more willing to go into court to protect your rights.
2. Look for a results based money back guarantee
If they can't guarantee at least a ten percent (10%) reduction in your payment, then walk away. Many companies will claim and even boast money back guarantees. But read the fine print, most of these guarantees require you to prove they did not attempt work on your file. Others will only refund half of the money at best.
3. Beware Quantitative Claims
If anyone tells you they can obtain a loan modification with a specific rate and/or a specific payment amount before negotiating with the bank, then walk away! An experienced group of attorneys well versed in the loss mitigation game, would never make such claims. Never mind they risk losing their license to practice law. They know that each case is unique and there is no standard modification.
4. Start the Process Now
Don't let another day pass you by while you stress over the decision. If you want to keep your home you must take action now. It costs you nothing to consult an attorney based loan modification service. There is no time like the present to explore your options.
Foreclosure can creep up on you quickly and before you know it, it's too late. Mortgage lenders do not want to foreclose on you. They are willing to negotiate with experienced professionals who understand how they work and will not waste their time.
