Loan Modification Companies

by admin on February 10, 2009

The global recession along with increasing job cuts and losses has had a major impact on the mortgage industry. With many people unable to pay their monthly mortgage payment, the possibility of foreclosure increases every day. As a consequence, many companies claiming expertise in loan restructuring have surfaced and are targeting consumers who are near foreclosure or want to get out of a horrible loan.

Before hiring a loan modification company, you must do your homework. Check to see if they are licensed and ask to talk to 3 references. References are a great way to tell if a company is legitimate – these references will tell it to you straight so you get an idea of what other people have gone through before you shell out your own money.

There are some unsavory companies that are looking to take advantage of the fear people have. These businesses will tell you they can fix your problem and when your home is about to get repossessed you may jump at the first helping hand. They also may make tall claims of reducing the interest rate to sub 2% levels and large reductions in the principal. The truth is that though a loan modification can be worked out, no company can guarantee you what you’re going to save – that is going to be entirely up to your lender.

It is advisable that you keep your guard up as you interview different loan mod companies. Some businesses may only be a year old as loan modification have been around, but they’re really only been around in full force for the last year and a half.

Be wary if you are advised to stop paying your scheduled mortgage payments. Some companies may counsel you to stop paying your mortgage, but your lender may end up charging you interest, fees and penalties on the delinquent payments. It is thus imperative that you do your due diligence and understand the various facets of loan modification before choosing an agency. Avoid fly by night operators who have sprung up all of a sudden just to take advantage of the latest craze.

It does not make commercial sense for a home owner to get stuck with an agency not equipped with either the experience or the knowledge to execute loan modification arrangements. Working with the right person is important also because, as a house owner you only get one opportunity in a year from your lender and if that is not utilized properly; you could end up losing your home due to foreclosure.

So how do you identify such scamsters? One common give away is the sort of guarantees and empty assurances these people make even without knowing your financial status. A genuine loan modification company will never make commitments before hand since they know that it is only the lender who can decide your ultimate fate. Do your homework and use common sense and you can find a quality loan modification company.

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