Loan Modification Questions And Answers

Modification Q&A

 

I daily research articles and information put out by all sorts of entities to keep informed and up to date on the current mortgage crisis and modifications. It becomes a jumble of information, opinions, slander, and scams. Using my 10 years experience as an educator, as well as my experiences with lawyers, loan officers, brokers, auditors and real estate professionals, I will attempt to clarify the most common issues and questions I encounter on a daily basis. I hope you find this clear and helpful.   

           

Is a loan audit valuable for a modification?

An attorney can use discrepancies and violations found in loan documents to negotiate the most beneficial modification and can threaten and carry out litigation based on the violations if necessary to achieve a successful resolution.  An audit can also help in a short sale or a deed in lieu negotiation.  Information is power.

 

Should a specialty attorney be used for a modification?

If you want the absolute best chance at success then yes. Real Estate and Contract Law Attorneys have the expertise in this field and can use litigation if necessary. A broker or modification company may have some successes and may be able to do the job, but do not possess the contract and real estate knowledge and expertise to propose or review a mortgage contract. 

 

Can a person modify their loan on their own?

Yes. However any information given to the lender is an attempt to collect a debt. Lender offered modifications are in the best interest of the lender, not the borrower.  If you possess extensive knowledge of real estate contract law, mortgage loans and how they work, can thoroughly understand a modification offer contract, and can decipher how arrears, fees, and penalties are figured into the principle balance, you may have a chance at a favorable outcome. 

 

How do I avoid a scam?

Check out the attorney on the Bar Associations Website. Find out their specialty and how many years experience they possess and the Law School attended. Brokers or Modification Companies must have a valid broker’s license; thoroughly check out their business and their success rate.  If a company says they use an attorney, get the attorneys name.  Brokers cannot accept a modification if the client has a Notice of Default. If you are offered any guarantees, walk away. There are no guarantees; you must choose based on the highest possibility of success. Ask questions.

 

Is an upfront fee a scam?

An attorney charges a retainer for services to begin a case.  Ask if it is a flat fee retainer, or retainer plus hourly. Once an attorney receives retainer a letter of retention is sent to the lender and the file is generally pulled and placed in legal until the matter is resolved. A broker or modification company should not accept an upfront fee, and cannot get a file placed in legal or file a lawsuit if necessary.  There is no “free” modification. Whether done on your own through your lender, a modification company, broker, government program, or an attorney, there will be a fee.  You must decide who is looking out for the best interest of the homeowner, and who has the best chances of success.

 

 

Should a homeowner make payments during the modification process?

If anyone advises you either way, walk away. This decision must be made by the homeowner. Generally if a homeowner is already behind, they have taken a hit to their credit. It can benefit the case for financial hardship if a person is behind on their payments.  If a trustee date sale is close, only an attorney can stop it. Generally arrears are eliminated, forgiven or put to the principal balance depending on the amount and circumstances (here is where the audit comes in handy) upon a successful modification.

 

Will the government Program help?

The government program is slowly being revealed and as of yet I have not been able to pull up “Official Guidelines”. The homeowners I have spoken with from a variety of lenders say they are not able to get information from there lender at this point.  I do know it is still lender approved, meaning the lender is not required to allow homeowners to participate. An specialized attorney will use every program available to negotiate the most favorable outcome for the homeowner.

 

I will do my best to answer or research any additional questions you may have as it is my goal to provide uncompromised client service. I believe strongly in helping people whether they choose my recommended services or not. I have aligned myself with what I believe to be the most professional, ethical, caring individuals, who share my belief that the client is our most valuable resource. As an educator I have always believed that information is strength and the best course of action for any important decision.

 

Sincerely

Mark Lee

Loan Audit Specialist

mark@loanauditspecialist

866-877-6244 Ext 103

951-284-8346 Evenings and weekends