Unfortunately, some of the same people who got us into the mortgage crisis, are now posing as experts to get us out. At the height of the real estate bubble, unscrupulous mortgage originators would put anyone with a pulse into a home loan. The feeding frenzy for mortgage backed securities was so great that income documentation often was not required. Some raked in millions getting people into loans they couldn’t afford. Now some of these same business people are capitalizing on the pain of their former customers.
If you’re facing an unexpected reset of your adjustable rate mortgage, or have suddenly learned that despite making faithful payments, you actually owe more on your mortgage today than you did when it began, do you really want to deal with the same mortgage broker who put you into the loan?
Many mortgage brokers are dusting off their contact lists, after setting themselves up as loan modifiers. They now purport to have the unique skills necessary to negotiate with your lender on your behalf. Upfront fees for this service often run in the neighborhood of $3,500 just to talk to your servicer. Most offer no hint of a money back guarantee. What incentive does a loan modifier have to actually work on your case when you’ve paid him in full up front? In fact, some states are starting to outlaw the charging of advance fees for loan modification services. Others are allowing customers a cooling off period to finalize a contract.
If you have to ask for a loan modification due to hardship:
- Your first choice is to do it yourself with all the steps outlined here.
- The second is to avail yourself of the free or low cost support discussed in this posting
- If you get contacted by a loan modifier, ask who is paying for the service. Some reputable firms get paid by the loan servicer to find common ground with borrowers.
- Finally, be vigilant when it comes to mortgage help scams.
There are many dedicated individuals working diligently to save peoples’ homes from foreclosure. As Butch Grimes, the Realtor behind “We Talk Real Estate” puts it, “Be Informed, Not Surprised.”
For more on the disturbing trend of loan originators profiting by supposedly cleaning up the mess they made, read this informative NY Times article.