Mortgage loan modification has become very popular over the past year. Even those who don’t own a home seem to know something about it or have heard the buzz.
Homeowners with mortgage loans try to get a modification when they find they can no longer afford the mortgage payment but cannot qualify to refinance. Instead of letting the homeowner lose the property to foreclosure where everyone stands to lose, lenders are often willing to “modify” the current loan to make the payments more affordable. So, if the current loan is with Wells Fargo, the homeowner would contact Wells Fargo about modification.
But what has become oh too popular is the massive swarm of third party companies who claim they can nearly save your home from BigFoot if you just pay them a huge upfront fee. My point being - outside, for-profit companies want you to believe they can contact your lender and make a modification deal to save your home if you pay them a $3,000.00 fee upfront. The actual cost can vary from company to company.
Trouble is, it usually does not work. Your loan is not modified. You end up $3,000.00 poorer and closer to foreclosure than before.
For those with properties in New Jersey who are interested in loan modification, this post is very important.
New Jersey has specific requirements a company must meet in order to offer loan modification services in New Jersey. Click here to read official information from the State of New Jersey.
If you are contacted by a company about loan modification, keep the New Jersey warning information handy so you can ask these important questions. If the company is not properly licensed or even worse, has no idea what you are talking about, we know that’s a bad sign. Move on.
You do not have to pay a fee for mortgage loan modification. Your lender will take your information and do everything at no cost. A modification can be and usually is a very slow process. It won’t be done in a few weeks. Lenders are overwhelmed by the volume of work. You will take a number and get in line. Don’t think that if you pay a third party, they will get it done quicker. They will not. They probably won’t get it done at all, much less quickly.
If you think a loan modification is your answer, contact your lender directly or contact a licensed HUD Housing Counselor. The Housing Counselors are exempt from the New Jersey licensing requirements.
Also, refer to my earlier post regarding the program implemented by the Obama administration for loan modification.
It is important to note that a mortgage modification will not be approved if your lender sees you qualify to refinance.
If you need a referral for a FREE non-profit modification service, give me a call. I can also let you know if you qualify for a refinance.
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{ 4 comments… read them below or add one }
i was burned 2x with someone saying they would do this for us. both promised a phony guarantee. can we sue these companies?
I hate to hear your story. So similar to many others. I can’t provide legal advice, however, as with any agreement, you should take a look at whatever you signed, if anything, and see if it offered you any protections. When you say “burned”, does that mean you paid an upfront fee?
Did you try to do the loan modification through your lender as mentioned in my original post? If not, give that a shot. If you meet the criteria, you should be able to get it done with your lender. I presume you know you cannot refinance, or that a refinance won’t help you? If you are not certain, let me know.
Good luck to you.
i have too many late payments on the loan to refinance it. some equity is there but got behind recently
yes working with wells fargo on a loan modification. only tried the pay companies because they both promised it would be quick