How Much Should a Loan Modification Cost?
Paul, my husband and I just paid LoanModCompany $3500 for a loan mod negotiation service. They claim to use an attorney to handle our negotiations, so I understood the cost, but am now seeing lower fees from competitors.
The broker that recommended them thought our lender would forgive our $100,000 2nd and reduce our 360,000 1st to a 3% p & i loan.
Are we paying too much? Is their projection out of touch with what lenders are really agreeing to?
My father was saying that the gov is now talking about loan mods and i should wait to see what they will be offering, any thoughts on what might be on the horizon from them compared to what loan mod entities are offering now?
I don’t have an opinion about the individual company you have named, but here is my opinion on loan mod fees . They’re way too high!
This ‘attorney backed’ phrase that gets bandied about with loan mod companies does not justify a larger fee in my opinion. Now, it would be a different story if the attorney was filing a lawsuit against the lender; however, that is not how this process works. The way these companies
are typically set up, they have the consumer write a check for $3,500 or some outrageous amount and then if a lawsuit is filed then there will be an additional huge fee collected from the consumer at that time.
I would venture a guess and suggest that most of the attorney facilitated loan modification companies are not and have never filed suit against a lender. When the loan mod fails, and the property goes to foreclosure, then the consumer begins to make additional monthly payments to the attorney to ‘defend’ the foreclosure action which only serves to delay the foreclosure a few months and then the consumer ultimately loses the house. That doesn’t sound like a winning proposition to me.
I believe consumers can contact their lender and obtain their own loan modification free of charge . I encourage every homeowner to do that first. At the same time, I also believe there is a place for a reputable loan modification company, just as there is a place for a reputable credit repair company, although where I take issue is with these outrageous fees. That’s why I am directing consumers desiring hands on professional help to find a loan modification company at an affordable price .
Thanks for the questions and hope this helps.Source: www.brokencredit.com