I received a phone call today from a radio station in California wanting to do an interview about avoiding foreclosure. Their focus is on loan modifications and the companies that have sprung up offering to assist distressed homeowners apply for loan modifications in an effort to save their homes.
I recently listed a short sale property and while I was talking with the homeowner, she related that she had paid a company close to $2000 to assist her with a loan modification. Of course, nothing came of the modification other than the homeowner forking over $2000.
It not like she was naive or gullible either. This homeowner has a doctorate and years of experience in the business world. The last thing any of these people want to do is to lose their home and they’ll hand over their last few dollars to someone who tells them that they can help.
It seems thousands of little companies have been formed to assist distressed homeowners with loan modifications. Run a search on Google and you’ll find a seemingly endless array of offerings. While I suspect there are some legitimate companies out there, homeowners can work directly with their lenders to attempt a modification. Want the good news? There’s no cost to the homeowner.
Homeowners also need to be aware that only a small percentage of modifications have been approved and 80-plus percent of those that are approved do not make it through the modification trial period. Loan modification is a low-percentage shot.
If the homeowner is simply too busy to work on the modification themselves and desire to hire a third-party to assist them, they should do some research. They should check out the company they’re considering. Homeowners can look companies up by name or phone number with the Better Business Bureau. They should also run a Google search on the company name and look for problems being reported.
The best course of action is for distressed homeowners to call their lenders or discuss the matter with their trusted real estate or mortgage professional.
