Mortgage Modification Mayhem
Having trouble making your monthly mortgage payment? Think you want to try to get your mortgage loan modified? Maybe get a lower interest rate? Or even get the principal balance on your mortgage reduced? Be careful. Not everyone who promises to help you, actually can. And be really careful if they ask you for a fee upfront.
By now we're all familiar with the subprime mortgage mess that has helped send our country's economy spiraling out of control. Now there's another potential debacle out there that you need to know about. It's called loan modification. It's an industry now dependent on the millions of Americans who are behind on their mortgage payments; who can't make their monthly obligations. There is a need-based program established by the federal government but now some of those same subprime mortgage lenders are getting into the act. Not all of them have your best interests at heart.
"The same people who were being hurt by this (subprime) process," says attorney Mathew Sheldon, "are being targeted again, to get additional fees to do the modification process."
Loan modification is different than refinancing. Loan modifications is a renegotiation with your existing mortgage institution. It's designed to lower your principal balance and your interest rate.
Be careful. Watch out for an upfront fee.
"Alot of people say, you pay us an upfront fee but it's refundable," continues Sheldon, "That is a big scam because alot of time they will take a percentage of that money and say these are for processing fees."
And watch out for rate guarantees. Sheldon says they can't guarantee you one.
"And they can't guarantee how much the principal can be reduced. So that's another scam to look out for."
Just ask Paul Elician. He's been trying to get his money back from a company called American Modification Agency.
"He said you must pay upfront 1% of your property value." In his case, $7,934.34.
Paul says American Modification Agency told his attorney, "Give us three weeks. If we can't get you a loan, or get your loan modified, we'll return your money. After three weeks, my attorney called them, they hung up on him."
We tried to reach the company that's located at 333 Carl Ovington Blvd in Uniondale, Long Island. They claim Mr. Eliacin provided them with inaccurate financial information. The contract he signed stated that providing inaccurate financial information was grounds for them keeping the upfront fee. They wouldn't provide any more information, citing confidentiality.
Attorney Mathew Sheldon reiterates his words of caution, "No one should take an upfront fee."
You should only be required to pay a fee after a successful modification.
One more note. Make sure you have your own attorney when you attempt a loan modification.
Comments: 7
I work for a modification company. I agree that there are allot of scams going on out their with modification company's. However focusing on up front payments is completely unfair and you are giving a false image of the up front payment. It takes on average 30-60 days to complete a modification. once the bank accepts the mod it is sent to the homeowner directly from the bank. There is no incentive for the client to pay after the mod is done. We did payment after completion, and 75% of the clients did not pay us for our hard work. Also allot of people are denied a modification because they FAIL to disclose financial information accurately, or flat out lie. You need to do more research and report the situation more accurately. Modification for allot of people is a saving grace in a very scary time and you are making the legitimate modification company's look bad subsequently making it harder for them to be able to help keep peoples homes.
I did work for a modification company, though I have left the business for other work. I agree with much of what the other poster said, though I will say that the ground Mod companies walk on is constantly shifting. This entire mortgage crisis originated with the banks, and the issues with streamlining modifications lies at the bank's feet yet again. Modification companies make the numbers very clear to the note-holders, and if the banks don't agree to make it work in a timely fashion that is their doing, not the modification agent's.
I feel that within the next 6 months Modification companies will be not much more than a distant memory. Banks will be forced or bought out by the government, making getting a mod easily done at a pre-determined amount given their financial situation, and having to pay for third-party services will be wholly unnecessary.
People in trouble with their mortgages should find free professional consultation. Mortgage modifications can often only be done once or have limitations on use. A successful modification with the best possible outcome requires careful preparation. A homeowner must show a viable case for modification to be considered. They must have detailed information on debt to income ratio and budget planning. Free information is at www.wemodifyyourmotgage.com . Find out what it takes to qualify before you approach your bank. Carefully prepare you documents for submission to the bank. You are preparing to take advantage of a clause in the mortgage contract.
A Mortgage Modification is a process whereby a home owner's mortgage is modified and both the lender and homeowner are bound by the new terms of the new mortgage.
The most common mortgage modifications are listed below:
lowering the mortgage interest rate
reducing the mortgage principal balance
fixing adjustable interest rates within the mortgage
increasing the loan term throughout the mortgage
forgiveness of payment defaults and fees
or any combination of the above
Check out this public service site at http://mortgagemodificationinfo.org
The attorney was very carful in his words asking for an upfront fee vs upfront retainer-attorneys will and do ask for an upfront retainer. The FTC is currently going after all loan mod offering services.Borrowers are not sending in the correct information or just cannot wait for the lender to answer the request for a loan mod.The word will get out as to how long some of these lenders are taking and why some of these investers are refusing the loan mods banks are sending them alot of banks still have to send the loan mod request for approval and the investoirs are refusing loan mods question who is the investor-AIG-Morgan Stanley- Also alot of lenders are raising the escrows on borrowers buy $200 or $300 per month for prop taxes raised by the local county-because the counties are getting less $$ from prop. taxes so they raise the rate to charge taxes and this is driving people out of there homes-NEW TREND
Thanks for sharing this info post.
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