After hearing countless stories of struggling homeowners who have paid thousands of dollars to loan modification companies promising to get these vulnerable borrowers a loan workout so they can afford to stay in their home-and seeing no results-we decided to go undercover to find out first hand just what homeowners are up against.  There are hundreds of loan modification companies offering their services, but how do you know which one is going to really work in your best interest?  Well, read about our experience so you will learn what to watch out for!

We posed as homeowners with a financial hardship and unable to afford out current mortgage payment, and an appointment was set to meet in person at a local loan modification company.  The only thing we brought with us was a copy of our current mortgage statement and a checkbook.  The idea was to find out what a borrower might encounter when seeking assistance from one of these companies.

We were met in the lobby by an employee of the loan modification company, and were shown to an office.  There, we spoke briefly about our situation, described how the current payment was not affordable and expressed out need for a fast solution.  We were never asked to show our mortgage statement, pay check stubs, bank statements, or any other type of documentation.  Soon, another man entered the room and was introduced as the manager.  He told us he knew we need help and felt certain they could get us a loan modification.

I asked him if he wanted to look over our mortgage statement to see what needed to be modified, he grabbed it out of my hand, briefly looked it over, then threw it down on his desk.  He then looked us both in the eye and said, “How does $1500 a month sound?  Could you afford that?”  I said, “That sounds great, but how can you get the lender to agree to that?”  He replied, “Simple, we’ll just modify your loan to a 3% interest only for 10 years!”  My partner questioned him, “Are you sure you can do that?” and he said, “We do it all the time.”  My next question was, “How much is this going to cost us?”  He quickly replied, “Just write us a check for $3495 and we’ll get started on it right away.”

Well, I did some quick math and calculated that with the current loan balance on our statement, a 3% interest only payment was over $2200 per month, so I questioned him a little further.  I asked him if he was planning on getting a principal reduction on our loan, but he said, “No, we are not really getting any principal reductions now.”  So, I brought it to his attention that his math was off and a $1500 payment would not be possible with the loan modification he quoted.  He became agitated, did not respond to my questions, and left the room.  The other employee said he had another appointment, but truthfully I think my questions were becoming suspicious.  We were asked again for the $3495, but we declined stating we wanted to think it over some more.

We left the loan modification company in shock at the blatant attempt to coerce payment from us without even the slightest effort to find out if we even qualified for a loan modification!  The fact that we were quoted an actual modified payment, and then assured that they would get that payment for us, was a red flag.  Each lender makes their own determination on how a borrowers loan may be modified, and homeowners need to understand that not everyone will qualify for a loan workout.  A legitimate, ethical loan modification company will review a borrowers income and assets, verify their hardship, and determine if the homeowner is a viable candidate before ever taking any fee for services.

So, before you decide to fork over thousands of dollars to a loan modification company, be smart, take the time to research, learn and be informed about how the loan modification process works.  Once you have a good understanding of your lenders guidelines, how to complete the paperwork properly and know what to expect, you will have the knowledge you need to make wise decisions.  Whether you decide to work directly with your lender, or hire a loan modification company, be informed-an informed homeowner is hard to take advantage of and will have a better chance of success.

You can get the help you need to understand the  loan modification process by ordering and downloading The Complete Loan Modification Guide. This is a low cost, easy to read handbook that will provide you with everything you need to prepare a professional and acceptable loan modification application. You are provided with all of the necessary forms and given detailed directions on how to complete them properly. The Complete Loan Modification Guide will take you step by step through calculating your debt ratio, completing the financial statements, writing your hardship letter and then putting it all together to submit to your lender. This handbook is worth every penny and could save you thousands of dollars.  Get started today on the path to secure home ownership, order and download The Complete Loan Modification Guide.

 For more information about mortgage loan modification, please visit us at: http://www.myloanmodificationcenter.com