Up Front Fees For Loan Modification?

What is a Loan Modification? That is where you and your lender agree to modify one or more of the terms of your home loan. The goal of a Loan Modification is to help you keep your home and to give you a real, meaningful, sustainable, and long-term adjustment to your current home loan that works for your financial situation.

With so many thousands of homeowners having trouble paying their mortgages, Loan Modification is one of the best options in order to lower their monthly payment and avoid foreclosure.

Avoid Paying Upfront Fees - If you are behind in your mortgage payments, you may be contacted by individuals or companies that will offer to help you work out a loan modification with your lender or provide other services to you in order to help you prevent a foreclosure on your home.

What are loan modification scams? Essentially it's when a modification company offers their services to help get your application approved, but for an up-front fee. After the fee, they promise to work on your case, but what is their motivation of getting an approved loan modification when they already have your money. In most cases they disappear after that. But sometimes they don't disappear, a portion of them give you follow up calls to tell you the "status" of your application, or to request more money to move the application along.

How To Avoid Loan Modification Scams -

A. Do It Yourself- If you have the knowledge, patience and time, you can do it yourself. You can contact your mortgage servicer and/or lender directly and request a Loan Modification that works for you and your lender. Be persistent! - call back many times. Document all communications with your lender, regarding time, date, what was discussed, etc. Remember that when you call a Lender, you are calling a debt collector, and anything you say to the Lender can be used to collect that debt. If you have no experience negotiating with a debt collector, it is much wiser to let a professional handle it.

B. Why Not Use An Attorney? Most attorneys charge retainer or an upfront fee with a minimum of $3000, regardless of whether they are successful or not.00 2) Even if the Attorney is unsuccessful, they will keep the Clients money. 3) Most Attorneys have no experience dealing with a mortgage Lender.

C. Other Free and Safe Options -- If you don't believe you can negotiate a Loan Modification yourself, or if you do not want to, there are safe options available to you.

1. The U.S. Department of Housing and Urban Development ("HUD") offers Foreclosure Avoidance Counseling. Go to HUD's web site at www.hud.gov, or call 800-569-4287, to find counselors. Government agencies, such as HUD, offers information to homeowners with their mortgages.

2. HOPE NOW Alliance - this is a cooperative effort of home loan counselors and lenders, and it consists of HUD intermediaries. Go to the HOPE NOW web site at www.hopenow.com or call 888-995-HOPE.

3. Use a Loan Modification company that offers an "No Up Front Fee Loan Modification program. Pay only if they get results. Find one that analyzes your whole financial situation, not just a Loan Modification, but also a Loan Modification Repayment Plan, Forbearance Modification, Short Refinance Modification, and Property Tax Modification. Before paying the fee, make sure that your lender has approved the Loan Modification plan, not just an approval by the Loan Modification company.