Loan Modification: Buyer Beware

I am very dubious about this new “loan modification” industry that is cropping up nationwide. It would seem that some bright marketing minds that have been in the mortgage business for many years, are seeing an opportunity to be “where the pain is”. As a mortgage professional, I am targeted by sales and production experts all the time with some “great new system” for increasing my mortgage business. One of the things that I see is that many mortgage professionals who used to focus on the sub-prime lending sector, no longer have the products or personal infrastructure to remain in the business. BUT there is one thing they have- a huge database of people who they helped get into loans that they couldn’t afford. And now there are law firms who are asking those folks to call the clients they have who are in foreclosure, or hardship to retain them for huge fees.

From what I can tell, the mortgage pro who got paid to put that person in a bad loan, will now get paid to attempt to get them out of that same loan. This mortgage professional, only has to refer that client to the law firm to get paid. I would say that it is unlikely that this former sub-prime mortgage professional knows very much about the nuts and bolts of what the client can expect, or anything beyond: “if you need to modify, you should retain this law firm”.

Now, I’m just one guy. I’ve been in the mortgage business in Portland, Oregon for about 6 years. And I’m sure there are some good people in the loan modification game, but all I know is what I’ve seen, and this is just my perspective on things. The folks that need the loan modification are in a very fragile place, and are easy to take advantage of.

I read a great article on msnbc.com about it.

Believe me, I know there is a real need for assistance and if you are reading this and are thinking about loan modification or are about to get foreclosed on. I have a fantastic local resource who is NOT affiliated with any of these new “legal solutions”. He’s just a local guy who has been doing this on his own for about 7 years now, and just knows the ropes. Drop me a line if you would like to be referred to him.

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