Do’s and Don’ts
Here are some helpful Do’s and Don’ts that you should consider if you are seeking a workout with your lender. Remember to always do your research and seek validation of anything that a third party is promising they can provide or accomplish for you.
What you DON'T want to do...
Don’t pay upfront fees to anyone. The reports of unsuspecting homeowners placing their trust in the hands of third party’s with no results are mounting. Many have lost thousands of dollars and the result is often foreclosure. If anyone other than an attorney (not a representative of an attorney, but THE attorney) asks for a retainer or upfront fee… RUN!
Don’t (or at least be hesitant to) accept the first workout solution offered by your lender. Here is the situation… although we praise lenders who have the foresight to offer workout solutions quickly and efficiently; we find that these “boiler plate” solutions often maintain the greatest benefit to the lender at the expense of the borrower. If you are offered a workout solution from your lender, we would encourage you to make contact with us for a FREE review of the proposal. We find that more than 20% of upfront offers a very generous, 14% are fair, 21% leave more to be desired, and 45% are NOT fair solutions.
Don’t hire a Modification Negotiator with excessive fees. Challenging economic conditions can bring out many opportunists. These so-called loan modification “experts” are popping up as quickly as Sub-Prime lenders and brokers are going out of business (think about that).
Don’t agree to a short sale without calculating the long-term costs. Many short sales result in taxable income when the lender cancels the debt. You will receive a 1099C for the deficiency. In addition, many lenders sell the debt to a third party collection agency after they cancel the dept. This can haunt you for years to come including forcing you into bankruptcy. Short sales must be carefully considered and negotiated.
Don’t stop making your mortgage payments on the advice of ANYONE except a retained real estate attorney. Withholding mortgage payments as a negotiation tactic is very risky and can result in you loosing your home to foreclosure.
Don’t pay an upfront fee to anyone if your lender has recorded a notice of default. These are usually scams that promise they can save your home. There are non-profit agencies that can assist you without charging you a fee and real estate brokers who can represent you for a fee to be paid after they have completed their work.
Don’t get “Sold” on a workout solution. Making the choice to peruse a workout with your lender should be an educated decision. If a sales person is pressuring you, especially a commission based sales person; you should be leery of their true interests.
Don’t hire a Loan Modification company that is not a Licensed Brokerage or a Law Firm. Most states govern Loan Modification companies through state finance, real estate, or state Bar. Making payments to anyone other then licensed professionals can result in you loosing your money without any recourse. A legitimate Loan Modification firm with have their licensing listed on their web site. Report scams here: http://www.stopmortgagefraud.com/
Don’t avoid calls from your lender. It is important that your lender know your intentions to keep you home. Think out it, why would a lender want to work with you if they get the impression you ultimately do not want to stay in your home? Make a point to call your lender or take one of their calls every couple of weeks or so.
Don’t do business with a Virtual “Online” company. All legitimate business have a physical address and clearly post it on the contact pages of their web sites. Protect yourself by never giving out your information on one of these sites. You may be surprised that they will sell your information as Sales Leads to companies that charge large up-front fees.
What you DO want to do...
Do Be Persistent. If you attempt to get in contact with us and don’t get through, call back or e-mail us. We are very busy trying to help as many people as we can. Once we start the process, check back often… you with not be a bother.
Do Check References. Be sure to know who you are working with. Before selecting a workout specialist, get references and do your homework.
Do your research online with your lender before calling them. Most lenders have prepared web-sites to help answer questions and provide the requirements to consider your loan modification.
Do Keep in contact with your lender even if you are not able to make a payment. Homeowners that “go dark” on their lenders are less likely to receive any help and may speed up the lenders desire to foreclose on the property.
Do Get legal advice before you do anything that could have permanent repercussions including waiving any of your legal rights in exchange for an agreement with your lender.
Do Shop price and service before you hire a Loan Modification company. Most lenders are getting fairly efficient at processing loan modifications. Although hiring for experience is very important, you should be able to accomplish your goals at a fair price.
Do avoid the “so called” experts in this field. Be realistic. This crisis has only been in play for about a year and “loan workouts” only became common practice in the last 6 months. If you are dealing with, or worst… “being SOLD” by an expert with say… 35+ years experience… RUN! There are no seasoned experts in this field. Not yet!
Do check the Better Business Bureau (BBB) records before hiring a loan modification organization to assist you with a workout solution. You will be surprised how may of these companies are not listed, not licensed, or have a very poor rating. BBB Online Here
Do attempt to work with your lender before hiring a professional. As difficult as it can be negotiating with your lender, you would be surprised how often lenders propose good workout solutions with a little bit of persistence from the homeowner.
Do educate yourself on the process. We are big advocates or educating and empowering homeowners so that you can make the most educated choices. CLICK HERE to view our educational videos on the helpUmodify.org workout process.