What Does an Average Loan Modification Company Charge?

by tammy on March 21, 2010

When trying to determine a fair price for loan modification services, the first thing the consumer should realize is that the industry as such is completely unregulated. Virtually anyone can claim offer loan modification services and they can charge as much as they would like for this service. Most serious loan modification services are offered by licensed or unlicensed brokers and agents, loan officers, and attorneys, but there is no regulating authority preventing anyone from offering these services, from convicted con men to they guy next door. Therefore, it is difficult to say what an “average” cost for these services is; however, like much else in life, the old maxim “you get what you pay for” does apply to the loan modification industry.

In general, the loan modification industry can be broken down into three basic groups: low-end, mid-range, and high-end. The low-end companies just provide more or less general information, explaining how to start the process, what to ask for, and helping their customers understand what they will have to provide and what to expect. These services usually do not provide ongoing consultation and they do not go through the process with you. Instead they just provide you the basics of how it all works – something that might amount to nothing more than an e-book – and then collect your money. These are the companies most likely not to be run by professionals and least likely to offer any sort of additional support or a money back guarantee. These are also the companies most likely to sell you bad or dated information. The costs for these services tend to range from as low as $199 to as high as $1,400.

The mid-range companies provide all the basic information that the low-end ones do, but they also work with you through the whole loan modification process. They usually serve as constant consultants as the process unfolds and will sometimes do a lot of the negotiation directly on your behalf. These companies will frequently be operated by licensed mortgage brokers or other professionals, will likely have the most up to date information available, and will frequently offer at least a partial satisfaction guarantee for their services. As loan modification negotiations can be very time consuming and complex affairs, consumers should expect to pay in the range of $1,200 to $2,500 for these med-range services, but you can also expect to get your money’s worth.

The high-end companies are usually either law firms or companies that retain attorneys on behalf of their clients. The simple fact of the matter is that having a legitimate attorney representing you in negotiations for a loan modification radically improves your chances of success. The lenders and servicing agents tend to take attorneys much more seriously because just their involvement at least implies the threat of future litigation. Further, attorneys are much less likely to overlook important details or be fooled by tricky language in the modification agreement. Not surprisingly, the cost for high end loan modification services jumps up dramatically, usually starting at around $3,000 and going up to as high as $8,000 in some cases. However, if you hire a high-end loan modification company you stand a much better chance of getting an excellent deal which may end up saving you a lot more money in the long run.

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