If you’re facing foreclosure, you’ve probably started to receive offers from people or companies that market themselves as loan modification specialists, who promise that they’ll reduce your interest rate to 2% for the life of your loan, or that they’ll knock off half of the principal balance of your loan, or that they’ll get rid of all of the accrued interest and you can just go back to making your regular mortgage payment. All after paying them a small fee, of course.
These modification specialists may even be able to show you sample letters from mortgage companies as examples of the spectacular deals that they’ve been able to get for their clients. They have testimonials on their website from satisfied customers who will repeat the claims that the modification specialists made.
There will always be a disclaimer that your results may vary, or that past performance is not an indicator of future performance, or some other thing that should be your first clue that this is not going to work for you.
You might remember that I posted about how you shouldn’t wait to address your mortgage problem, and you figure that calling one of these modification specialists is a great way to face your problem head on. After all, these people specialize in modifications and they help people just like you, right?
The people described in those marketing campaigns are not modification specialists, they’re magicians. And we all know magic is not real. It’s just an illusion.
I’ll admit that I’m biased. I am an attorney after all, and I’ve been involved in probably thousands of loan modification applications in my career. Some were successful, some weren’t. Many didn’t qualify for a loan modification. The point is, I know what the banks are looking for because I’ve been the liaison between the bank and borrower countless times.
I’m also biased because I have a license to practice law. Modification specialists aren’t licensed by any governing body. There’s no license for them to lose if they don’t come through on their promises or if they outright lie to you.
You’ve read a couple of my posts and you’re feeling like you’re getting to know me. Maybe you’re even getting to like what I have to say. Maybe you decide to hire me based on the expertise and value I can deliver for you. When you come to meet with me, one thing you’ll never hear me do is make you a promise. I don’t promise anything because there are too many variables that are outside my control. I’m going to rely on what you as a client are going to tell me and on the documents that you provide to me. The bank is going to need certain things at certain times, and if you can’t deliver those things at those times, your application might get rejected. It might not be in your control, and it definitely won’t be in my control. How could I make guarantees?
The thing is, no matter how much you like me, you will blame me if I break a promise or guarantee a result to you and then fail to deliver. It doesn’t make you or me a bad person, it just is.
The modification specialists, who are not licensed attorneys at risk of losing their license, will not hesitate to make promises and guarantee results. They are there to close a deal, collect your fee, and then move on to the next person.
If you’re not going to go to an attorney (I mean, you should, but if you didn’t…), you should go see a HUD-approved housing counselor in your area. These folks are approved by HUD, a government agency, and they can lose their approval if they don’t keep up with their qualifications. They may offer free or cheap modification assistance for those who qualify. Even if you don’t qualify for the free or cheap assistance, you might be able to get some good advice or a referral to an attorney who can help.
The moral of the story is that while it’s good to face your mortgage problem by trying to get a modification, you have to avoid the modification magicians. Go see someone who can actually help.
Jason Sackoor is a real estate attorney in Queens, New York concentrating on foreclosure and real estate litigation. You can check out his website, e-mail him, or call his office at (718) 767-3333 to set up a consultation.