Can you do a Home Loan Modification yourself?  Do you stand a better chance if you pay a Loan Modification Company to represent you?  These are questions facing frantic homeowners trying to avoid foreclosure with a loan modification.  One option costs you nothing up front, while the other can cost you thousands.  Let’s weigh the pros and cons of both options-then you make the decision.

A Loan Modification Company will agree to contact your lender on your behalf and handle the paperwork processing, submission and negotiating aspect of the process.  They should do all the calling, follow up and play hardball with your lender if necessary to get you the best loan modification.  The Loan Modification Company should be experienced in dealing with various lender’s loss mitigation departments and know how to get thru to the right person immediately.  Sounds great, sign me up-BUT-the Loan Modification Company also requires a large upfront fee from the homeowner to start the loan modification process.  That can be tough for an already financial strapped homeowner.  After you pay typically anywhere from $1000 to $5000, you will receive NO guarantee of a successful outcome.  They can’t give you a guarantee as it is your lender who decides to approve or deny your loan modification application.

What do you get for all that money?  Ideally you get a professional, experienced representative who knows what the lender needs to see from a borrower in order to approve the loan modification application.  This means that your income and asset documentation has been reviewed and itemized properly on the correct forms prior to submitting it to your lender.  They should also have performed a Comprehensive Market Analysis to determine the current, accurate market value of your home.  Your Loan Modification Hardship Letter has been critqued to assure that your circumstances are presented in a compelling and concise manner so your lender has a clear picture of why they should grant the loan modification.  The Loan Modification Company should have computed and presented a modification plan including interest rate reduction, term modification and principle reduction to present to the lender so your target payment can be reached.

Some Loan Modification Company’s work with an Attorney, more do not.  What is the benefit of having an Attorney involved?  Well, an Attorney can use some legal tactics to bring pressure to bear on reluctant lenders.  The threat of pursuing lending violations such as RESPA and TILA make a lender sit up and take notice.  Experienced Attorneys know the power of these laws and can use them to convince a lender to accept a loan modification on behalf of the homeowner.

Now, what about becoming your own Loan Modification expert?  It may sound daunting, but the truth is that with some basic knowledge and preparation, you can put together a succesful do it yourself loan modification package and work directly with your lender to modify your loan.  After all, no else is going to work as hard as you will to save your home.  Here are some of the basic steps. There are certain calculations that lenders use to determine if you qualify for a loan modification.  The most important is called debt ratio.  This is a simple calculation using your income divided by your monthly outgoing payments.  The tricky part is showing the lender that while you cannot afford the current payment, you can afford the new, lower, modified payment.  This is can easily be done by completing two financial statements-one with the current payment and one with the new proposed, lower payment.

You can find out the current value of your home using several easy and free methods.  You can use internet sites like Zillow, or you can contact a local realtor and ask them to run a Comprehensive Market Analysis for you.  Most realtors will happily help you as you could be a future client.  Once you know the current value of your home, you can use this as ammunition with your lender.  If the loan balance is higher than the current value, your lender will much prefer to modify your loan to keep you in the home rather than lose more money by taking the home back in foreclosure.  This strategy can even be used to negotiate to lower the principle balance on your home loan to closer reflect it’s current value.

Whether you decide to retain a Loan Modification Company or do your own loan modification, it is imperative to have a very clear understanding of how the process works, what your lender is looking for to approve your loan modification application and making sure your best interests are served by a Loan Modification Company and your lender.

The Complete Loan Modification Guide will give you the information you need to learn the 7 Steps to a Successful Loan Modification, as well as give you insider tips for negotiating with your lender like a professional.  The Complete Loan Modification Guide also provides all the necessary loan modificaton forms, along with detailed instructions on how to complete them properly.  This easy to read and easy to follow Guide will give you the fighting chance you need to fix your loan and save your home.  Do not contact your lender until you are fully informed and educated about your options.

If you would like more information about loan modifications, please visit us at:

http://www.myloanmodificationcenter.com