Speedy Loan Mod in Two Weeks

February 22nd, 2011

A few of our clients recently reported that they received calls from Loan Modification consultants who did not sound like your normal loan mod lawyers helping to negotiate with the lenders. These consultants claim that they are hired by the investors of your loan to work with the mortgagees directly. The banks have been in slow movement getting loans modified in the past few years; the investors behind those loans are getting impatient and decided to work around the banks.

These consultants provide pretty good terms. We’ve seen 2% fixed rate for the first five years and 0.5% annual increase afterward up to 5%. They also claim that the mortgage mod can be completed in 2 weeks. They also usually have a local office and ask mortgagees to bring all the related documents to the office for the first and only in-person appointments.

These consultants know your full name, account number, phone number, address and probably more. Whether it is legal for the investors to disclose borrowers’ confidential information to non-loan-servicer is one question, having your information certainly makes their story of direct investor authorization more believable.Now the fee – most people are aware that it’s illegal in most states to charge upfront fees for mortgage loan modification work. These consultants did make it clear that their fees, range between $3500 to $6000, are not collected until the loan mod is completed and paperwork are signed with the investors. It’s steep fees, nevertheless to say. It may worth the fees if you are actually able to lock in the above loan terms, especially if your current rates are high. The higher your current interest and loan amount, the more saving you would have each month by going for the new rate. You should compare the fees with the savings for how long you plan to keep the loans.

We are in the process of working with a couple of clients to lock down the above rates by using the consultants. We approach them very carefully and make sure no fees are paid in any way until the loan documents are verified and finalized. We will report back the outcome when it is completed. Let us know or leave your comment below about your experience of using these consultants.

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