Loan “Mods”….short for Loan Modification. This is a really hot topic now. It seems everywhere you go there is someone who claims that they can modify your loan for you – i.e., negotiate w/your lender to lower your payments either through extending the term of the loan, lowering the interest rate, and/or reducing the principal by resetting to current market values. It sounds really great but beware. Everyone wants a “piece of the pie” and they want you to pay for them to negotiate with your lender. You might think you could do it yourself but beware! If you don’t know who to talk to at your bank you could end up not getting what you think you got – or you’ll get nowhere at all.
Do your homework, talk to lenders about a good recommendation, maybe an attorney. I have recently met an Arizona group who works with attorneys in getting a “principle reduction” on the home mortgage. They will evaluate your situation with documentation and they won’t take any money until they are confident that you will qualify. This group says it takes about 60-90 days and they have a 90% success rate. If you have clients who truly want to stay in their home and can show that they can comfortably make reduced payment, this may be an option for them to consider. Their fees vary. Some attorney’s generally charge you at least one month’s house payment to negotiate this for you. Not a bad deal considering the money you will save in the long run. But….do research it thoroughly and check the company out with the Better Business Bureau. Do your due diligence before paying someone to do this. It is a lot of work and should be done by a professional.
Sincerely,
Elise Fay
