Many of my clients and homeowners around the country are reporting a lack of success with their attempt to obtain loan modification. Beware of Mortgage Servicing Firms that are telling their clients that they have to be three months late before they can even apply. After they apply, these homeowners are then given a run-around. By the time they are either denied a modification or just in a stalemate, they are so far behind on their mortgage, they have few options. There have been numerous firms, and one in Texas, that are defrauding consumers seeking loan modifications, according to the BBB. Beware of any firm that attempts to charge you a fee upfront for help securing a loan modification, this may be an illegal practice in your state.
One of the problems with the whole idea of loan modification is that there is a disconnect between the mortgage servicing company and the owner of the Note. The mortgage servicing firm makes money when loans are late or foreclosed since they charge fees when that happens. The owner of the Note (which has often been securitized) needs to do a better job of protecting it’s own interests.
