Loan Modification Specialists? Scam or Legit?

[anonymouschris]

I've heard several friends who were able to successfully reduce their interest rates and/or principal amount using a loan modification specialist. I tried using their referrals but have had a horrible experience with them returning calls etc. Anybody know if these specialists are legitimate or can I work with the mortgage companies privately? I have not had any late payments on any of my rental properties.

Please respond if you have any experience in this area?

 

[FelixDeCat]

Just call your mortgage company directly. You dont need a third party.

 

[JS80]

Originally posted by: FelixDeKat
Just call your mortgage company directly. You dont need a third party.

^ they charge you for being lazy

 

[OCGuy]

They are a scam. You can do the same thing yourself, like Felix said.

 

[JS80]

Originally posted by: OCguy
They are a scam. You can do the same thing yourself, like Felix said.

not a scam per se, but you're outsourcing your laziness paying $500/hr.

 

[axelfox]

Like any other industry, there are good and bad apples. With the wave of foreclosures and loan mods, this is the time for the scammers to come out of the woodwork and take their piece of the pie.

My suggestion is find an attorney that specializes or has experience with loan modification. They should be able to help you gather all the documents that you need in order to prepare for a loan modification.

At least with an attorney, you can go to the State Bar to complain if things go wrong. With "loan modification specialists", they may or may not be licensed by the state, and could be fly-by-night operations.

More over, be wary of loan mod companies trying to take an upfront fee and/or guaranteeing results. In CA, licensed DRE companies or persons cannot take an upfront fee without submitting their advanced fee contract to the DRE for a "no objection" letter.

HTH.

 

[FelixDeCat]

Also, having worked many facets of servicing for almost 20 years I can tell you that "investor properties" (eg. rental property) are the least likely to be modified. That is because there is more risk associated with homes that arent a primary residence. "Second homes" might be another story however, and if you wanted to be sly you could do each one at a time doing what it takes to qualify for that moniker with your lender.

The bottom line is that it all depends on who your mortgage company is servicing the loan for: FNMA, FHLMC or a private label like Citi/Chase/Wells. And if thats the case I can tell you without a doubt unless there is a special circumstance like a federally declared natural disiaster you will be told to go jump in the lake.

There is a slim chance that your mortgage company / bank might hold your loan in their warehouse account - and if thats the case - they can do whatever the frick they want to it (although they tend to follow FNMA/FHLMC guidelines in hopes the loan might one day be sold so they can recycle the money and make more loans). So it doesnt hurt to ask especially if you give them some numbers upfront like what rate you want or an extension of the maturity date to lower the payment.

But like I said, being an investor property is going to work against you so expect a "NO!" - and no 3rd party loan mod bullchit company can change that because they dont have ANY LEGAL AUTHORITY TO CHANGE A DAMN THING. You will literally be putting your money in the nearest trash bin if you go that route.

 

[rudder]

Here is one scam:

You pay the loan mod specialist. They say they will pay the mortgage. They no pay. Mortgage company starts foreclosing. Loan mod specialist negotiates with mortgage company to get better loan terms. It may work... but your credit rating is thrashed.

This may not be true of all these type companies. But I find out from an old neighbor that this happened to the people that bought out house. They came within 2 weeks of the sheriff coming and kicking them out.

 

[Chryso]

Originally posted by: OCguy
They are a scam. You can do the same thing yourself, like Felix said.

Yeah, and restaurants are a scam because you could cook your own food.

 

[anonymouschris]

hey, thanks for the help and advice. it helps a lot!