Loan Modification Guide

The most important thing you can do with a "loan modification" is make sure that you hire a licensed attorney and that no fee splitting is occurring with non-lawyers. Make sure to have information concerning your true financial situation, payroll information, and accurate budget information.

Hire Competent Assistance

There are a number of "loan modification" companies who are competing with each other to complete "loan audits" or "forensic reviews" of your home mortgage. You will be told that the company is looking for Truth in Lending Act violations or issues concerning the Real Estate Settlement Procedures Act. Unfortunately, you may not be told is that a nonlawyer is doing the legal analysis or that a lawyer is simply working in-house for the nonlawyers. RESPA and TILA violations are highly technical and require the assistance of competent legal professionals. So, your first step is to make sure that you are hiring a lawyer and that there is a commitment to abide by the rules of professional conduct in his/her state. If a lawyer s not involved in the initial consultation process, be very wary of paying a nonlawyer for legal opinions on mortgage issues. The unlicensed practice of law is a crime, but there are real estate professionals who are able to provide modification services.

Have Necessary Documentation Ready

Before loan modification can be given consideration, you need several items of information. This includes pay stubs, proof of income, a budget, tax returns, default notices, a credit report, and other information helpful in a lender's decision to modify a loan. Make sure that you have visited the FHA's at http://portal.hud.gov for free and accurate information on what to expect during the process.

Consider Your Other Options

If you truly cannot afford to stay in your home, or your other debts are preventing you from paying an otherwise affordable long-term monthly mortgage, your options may include bankruptcy, debt consolidation, consumer debt counseling, or other more traditional options. If you are considering any of these options, you will need much of the same information mentioned above. Before you can file a petition in the bankruptcy court, you will need to have completed a debt counseling session with a certified counselor, you will need a certificate of completion from the counselor, you will need a current credit report, a copy of your social security card, three years of past tax returns, and you need to avoid cash advances or the use of credit cards in the months or year before filing.

Do Your Research

You can find plenty of free information on loan modification, bankruptcy, mortgage fraud, and debt restructuring on our website at: http://www.inlandvalleyattorneys.com/loanfraud.html . We DO NOT generally offer loan modification services. We provide bankruptcy petition representation, consultation on loan issues, and we try to find solutions for our clients that are realistic. Loan modification happens in about 1% of all requests according to recent data. Don't get yourself in further trouble than you already are in. With respect to any loan modification company, beware of upfront fees. From attorneys, DEMAND a copy of all billing information as to the type of work and number of hours expended on your case. Also, make sure that an actual attorney is doing the majority of the important work on your case.

Be Realistic About Your Situation

If you were never qualified for your original loan, don't expect a lender to be open to modification. The lender wants to be repaid on the loan and will not be responsible for a mortgage broker who assisted you in placing misleading income information on your application. For example, if you are unable to pay interest-only payments, it is unlikely that you would be able to make payments on a traditional 30-year loan. Or, if you cannot afford to pay a 'teaser rate' interest payment, it is unlikely you could afford a loan at a higher fixed rate. Many "loan modification specialists" don't tell you there is little chance a modification will be granted if there was misrepresentation at the loan's inception. While it might not seem so, modifications are actually expensive for lenders and you need to have a good basis for convincing them to incur the costs. Don't feel bad about where you are. There are a lot of other Americans feeling the same pain and looking for real solutions.

Comments - add comment

Posted 12 months ago.

Anonymous Comment: This is pretty bleak. The government website is not helpful and apparently this attorney is only interested in helping a small number of people who could apparently afford their loans beyond teaser rates or interest only options despite the fact that the lenders qualified the borrowers on based on these criteria. Hopefully if you're truly in trouble with your mortgage, you'll continue looking for the help and support that you need and deserve.

Posted 11 months ago.

Paul J. Molinaro, M.D., J.D.'s Comment: Words from an Opinionated California Lawyer In California, the Department of Real Estate website (www.dre.ca.gov) lists the companies that have DRE "permission" to modify loans... add to this list any licensed California attorney, and that is where you should begin your due diligence when you seek help in California. Other states probably have similar laws, so check with your own state DRE. My law firm has been getting more and more calls recently from homeowners that were victims of predatory lenders who put them into an unaffordable loan and now fell into the hands of those same people who sold the toxic loans but profess to be saviors... DONâ€™T BE A VICTIM TWICE! Do your homework and THOROUGHLY investigate any firm before hiring them to save your biggest asset and the place you call â€œhome.â€ These scammers are popping up like dandelions on a freshly mowed lawn. They advertise on the Internet, freeway billboards, radio, television, and print media everywhere. Make no mistake, in many cases, these are the exact same loan officers and mortgage brokers who fleeced homeowners the first time around. After losing their jobs with the crash of the mortgage industry, they have found a new way to make ill-gotten profits from hard-working homeowners through loan modifications. In California, with very few exceptions (and attorneys are one exception), it is against the law for anyone to take money up front for helping a homeowner who is in default. Donâ€™t trust a company that begins its relationship with you by breaking the law. Of course, this is one lawyer's biased opinion, but one based on many distressing calls to my office every day. And, yes, my firm does take cases against loan modification companies who have violated laws. This field is quickly becoming one of the fastest growing sections for our mortgage law firm. - Paul J. Molinaro, Esq.

Posted 8 months ago.

emorris' Comment: LOAN MODIFICATION SCAMS AND RIPOFFS CLASS ACTION Have you been ripped off by a loan modification company? Were you scammed, lied to or defrauded by a loan modification company? Our law firm is fighting illegal and non-compliant loan modification companies and seeking injunctions to stop them from continuing their illegal activities and also seek money damages to make you whole. Call us for a free initial consultation. Here are some of the loan modification scams we are seeing. If you have been a victim of any of these activities please contact us for a free consultation. We will look up the loan modification company and see if they are properly licensed to engage in the loan modification business. In addition, we will scrutinize their activities to see if they were negligent in performing loan modification services. (1) Non-compliant company loan modification scam: In order to perform loan modifications in California a Broker is required. The California Department of Real Estate ("DRE") has declared loan modifications to be a licensed activity. As such, a Broker's license is required and any salesperson working under the Broker must also be licensed. In addition, loan modification marketing, solicitation, processing and negotiation has also been determined to be licensed activity by the DRE. We will investigate your company to see if they are properly licensed. If not, we will seem an injunction preventing them from engaging in the loan modification business and seek to prevent future loan mod scams by the unlicensed or non-compliant entity. Note: If the Broker accepts an advance fee (charges you a fee for the service) they are required to have a loan modification contract that has received a letter of non-objection from the DRE. There are only a limited number of companies with an approved advance fee agreement (we will investigate this). (2) Attorney-backed / Attorney-based loan modification scam: This is the new flavor of the day in loan modification scams. Attorneys are lending their names and credentials to a loan modification company (which may either be properly licensed or not). The Client thinks they are hiring a lawyer and that they have put their foreclosure issue in the hands of a qualified attorney. In many cases, the Attorney either does not exist, or merely lended the broker the use of the name, address, and merchant credit card account so that the broker can bring in loan modification business by holding itself our as a legal entity of sorts. Both the California State Bar and the DRE have tried to warn both brokers and attorneys about this very questionable conduct that raises issues over attorney fee splitting, partnerships with non-attorneys, circumvention of the California Foreclosure law, and violation of the Attorney-Client relationship. Be very careful when thinking about going with an "attorney based" or "attorney backed" firm. Ask yourself why you wouldn't just go straight to an attorney. (3) Take the money and run loan modification scam: With the Internet any scam artist can hold itself out as a real company. We are seeing more and more loan modification companies that appear to be operating covertly, in violation of State licensing requirements, and these companies may even be offshore. Do not contract with any company if you cannot verify their physical address and telephone number. Once you give them your money you may not see or hear from them again. Even if you receive a mailer piece from a company that looks to be a legitimate loan modification company, proceed with caution and prudence. If you have been scammed or ripped off by such a company please contact us immediately. (4) False promises loan modification scam: Did your broker or attorney-backed/attorney-based company promise you something they did not deliver (ex. principal loan reduction, guaranteed loan modification, 100% money-back-guarantee, etc.) and fail to deliver? If so, they may have either ripped you off (f

Posted about 1 month ago.

Anonymous Comment: I truly believe that the banks will not ever be concerned with the dilemma that the average hard working people are in. They have received billions of dollars to bail themselves out and are doing just that. These monies they have received will pay for all services that it takes to throw people out of their homes. Eventually we will pay back the monies to the Government that enabled the banks to do this. I can honestly say I give up on trying to work with my lender. They created this problem and still are allowed to be the dictators whom they truly are.

Posted 13 days ago.

Anonymous Comment: I was ripped off by the hampguide. Do not use or buy this groups products they fraudulently use on their website the BBB Accreditation Logos and I did some research and they are not even listed or approved from the BBB. They claim they are the only Modification company that was given that distinction, a bunch of liars and a dishonest business.

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