The first, and most important thing to know about the modification process is that the banks DO NOT have to do it! It is not a “law” or an “entitlement.” The banks are under absolutely no formal obligation to offer any assistance what so ever. Lenders offer modifications as a means to remain profitable, and prevent financial loss. Period.
There is nothing “easy” about the modification process anymore.
Once upon a time before the Federal Government became involved, modification WAS “easy” as it was done on a case-by-case basis, and structured on the homeowner’s unique criteria. Trust me when I say I miss those “old days!” Back then we applied actual banking skills versus this generic garbage the Feds use! Success rates were much higher, and the process typically took less than 90 days start to finish. Today you’re lucky to get an approval in 6 months!
It is common knowledge the Governments HAMP program is a financial train wreck. Nationwide it maintains an approximate 88% FAILURE rate! Really? What, if anything can run at 88% failure and still operate effectively? Nothing.. Imagine if your car was running at 88% failure or if it was your heart…. Your car would be in the shop, and you’d most likely be in the hospital or worse!
There are so many twists and spins to loan modification that it’s impossible to offer any “typical” examples but the “basics” are all pretty much the same for any lender.
- You must have a legitimate hardship
- You must have a verifiable source of income
- You must be able to document your income
- You must provide a letter of “hardship”
After you’ve submitted your paperwork is when things start getting “tricky,” Your bank may not actually own your loan, and may just be servicing for another investor of Government agency. If this is the case, then your bank has very little power or authority to do much of anything other than forward your information on to the actual lien holder for review, and approval.
Should your bank be the lien holder also, odds are they will review your information for HAMP approval by default. Remember, HAMP is the Government program with an 88% failure rate…. HAMP determines whether you’re eligible or not based on your GROSS monthly income, not your net. A major mistake that causes epic failure for millions of people.
Long story short, never assume you’re “owed” a modification or that the Government program will help you as such an assumption could potentially cost you your home.
Also, don’t believe all the hype being promoted by the media and the Government. Not all private modification professionals are rip off artists. Truth be told, the scam artists represent a fraction of the industry. Most modification specialists are knowledgeable, honest, ethical professionals that genuinely care, and want to help you.
If you need to hire a professional, do your homework. You’re an intelligent person. If something sounds to good to be true, it is! You’re smart enough to recognize a scam artist when you hear or see one right?
Note: Attorneys have no “special” powers when it comes to modifications. The banks DO NOT fear them nor give them any preferential treatment
Professionals are entitled to be paid for their time, and expertise however; you should never pay anyone thousands of dollars for this service. I believe $1500.00 is a fair price considering all the time, and work involved. Personally, I’ve never charged more than $900.00 for my services, and I’ve never lost a clients home to foreclosure as a result of failure on my part!
Don’t be misled, use your brains, and do your homework!
If your need professional help with a loan modification, make sure you find, and hire someone that actually has experience, and knows what they are doing.
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