This is a great question. Because there are two schools of thought on the subject of loan modification cost.
School of Thought #1: Loan Modification Should Be Free
This is absolutely true. In fact, anyone can apply for a loan modification directly through their lender, and in most cases it will be free. Zip, zero, zero! Free. Many homeowners go this route and have some success working directly with their lender to modify their home loan.
In addition, there are government agencies that are created to help struggling homeowners who want advice on loan modification. If you want help or advice, you can talk to a HUD-approved counseling agency at (800) 569-4287. You can also check with your state real estate department or similar to find out what resources are available to you at the state level to help you obtain a home loan modification. All these options are free for you.
School of Thought #2: Look for a professional or expert modification company to do the job right.
There’s rent… rent = money. Well that’s the truth, it’s going to cost some money to go this way. A quality loan modification company will charge between $2,500 and $3,500 for their services. Anyone who is charging less, I would seriously wonder if it isn’t someone in their basement negotiating with their bank.
It’s worth it. Absolutely! Because? Because a professional loan modification company will bring much more knowledge and experience than you would on your own. Look, you are an expert at what you do, but chances are you are not well versed in the legal aspects of mortgage banking, state lending laws, RESPA laws, TILLA laws and all the other legal aspects that involved in a mortgage. . A professional modification company will have attorneys on staff or retainers who have experience in these areas who can influence your lender.
Also, a skilled loan modification company will already have established relationships with all the major banks. When you as a consumer are turned down…they can reach out to these contacts and make the change. These industry relationships are invaluable when it comes to getting loan modifications approved.
Let’s be honest with each other for a moment: do you really think banks care about you and get the best possible deal for you? Or are they more likely to be more concerned with their own results and their own concerns?
As a homeowner trying to do a loan modification on your own, chances are you’re not familiar with all the different types of deals your bank is structuring and granting. You do not know that if your bank does not offer you a fixed rate of 5%, they will give a rate of 4% to the next in a similar situation. That 1% difference on a $200,000 loan would cost you an additional $42,772 over 30 years. A professional home loan modification company will know what a good deal is and will represent your interests to the bank: they will know what a good deal looks like and if it’s worth it, they won’t accept anything less than a good deal. for you.
Finally, and I think this is really one of the great bonuses for customers of a skilled loan modification company: you don’t have to worry about it. If you’re trying to negotiate your own loan modification, then you’re stressed all the time wondering if you’re blowing it, worrying why the bank won’t call you back, and wondering if you’ll be turned down. Hiring the services of a professional mortgage modification company relieves you of that stress and anxiety, and allows you to enjoy your life a little more. Free your mind so you can focus on your family, work or whatever you want.
For some owners it is very valuable to have a professional on their team…for others…not so much. Either way is fine. As a consumer, you need to choose the best option for you, and then go ahead and take action.