Loan Modification Help-Should you pay an Upfront Fee?

Posted by admin On November - 17 - 2008

Troubled homeowners seeking loan modification help may be wondering if it is wise to pay an upfront fee to a loan modification company.  With over 2 million homeowners needing loan modification help, thousands of companies have begun offering to represent borrowers to negotiate a loan modification with their lender for an upfront fee.  Interested homeowners are told that they will have a much better chance of success if they retain a professional service instead of working directly with their lender to find a loan workout solution.  Whether that is true or not, before paying a large sum to anyone for a service, it is simply wise to do some research and know the facts.

Very few loan modification companies offer any type of guarantee that would provide for a refund of any money paid upfront by the borrower.  It is virtually impossible to guarantee results as each situation is unique and each lenders programs and guidelines are different.  The few that do offer a guarantee word it so that it is very vague and virtually unenforceable.  So, what precautions can a desperate homeowner take to ensure that their hard earned money is going to have the best result when attempting to get loan modification help?

Currently, there is very little oversight or regulation for loan modification companies.  However, some states do require that the company be licensed by the Department of Real Estate or some other agency.  Currently 17 states have some type of provision in place to govern the industry.  Before deciding to retain a company for loan modification help, a homeowner should check with local agencies about their state requirements to make sure the company they hire is in compliance.  There is free counseling and advice available through

Regulations regarding charging upfront fees to borrowers seeking loan modification help vary from state to state as well.  Some states, like California, do not allow any fees to be charged to a homeowner once a Notice of Default has been filed.  Loan modification companies in California must also be licensed and have an approved upfront fee agreement before they can legally charge a homeowner fees for loan modification help.  Again, homeowners should be sure to inquire about any companies licensing and compliance with local regulations before agreeing to pay any money upfront.

Some loan modification companies are affiliated with an attorney and as such are subject to different regulations.  Attorneys who offer loan modification help to homeowners are allowed to take an upfront retainer fee, and this is almost always non refundable.  An attorney who is focusing his practice on loan modification and is not sharing his caseload with a loan modification company will probably offer the most effective and competent representation for a needy homeowner.  In most states, attorneys are prohibited from “fee splitting” whereby they pay part of the retainer fee to a loan modification company who actually processes the paperwork and deals with the lender.  Again, homeowners need to ask the right questions before committing their money and home security to a loan modification company.

Vulnerable homeowners need to take the time to research, learn and prepare before they decide how best to get loan modification help.  Whether you decide to hire a loan modification company or decide a do it yourself loan modification is best, once you know how the loan modification process works and what your lender needs to see in order to qualify for loan modification help, you will increase your chances for success.  A knowledgeable homeowner is a powerful homeowner-once you decide to take control of your financial future by investing your time to learn about all of your options, you will be on your way to secure home ownership.  Research, learn, prepare-thousands of borrowers have already gotten the loan modification help they needed-you can too!

You can get the loan modification help you need 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. Get started today on the path to secure home ownership, order and download The Complete Loan Modification Guide.

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1 Response

  1. Loan Modification Help to Complete your Financial Statements | Loan Modification Central Said,

    [...] almost 2 million struggling homeowners are in need of loan modification help so they can stay in their homes and avoid foreclosure.  The Federal Government is urging all [...]

    Posted on March 13th, 2009 at 2:08 pm

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