Whats the deal with loan modification and upfront fees?
Well, come February 2011 you aren't going to see much of them. A new federal law will go into effect that bans companies from taking upfront fees. Attorneys can still do it, but even the most reputable modification companies cannot.
Taking upfront fees really wasn't a scam formany legit loanmod companies. Sometimes, a loan modification can take months and months to complete. You have to fax forms into the lender all the time, keep upwith the negotiator (the underwriter if you are lucky) and stay on top of the file to get it approved. It was necessary to take payments and keep the business running during this process.
Doing all that work for no money upfront is not a good way to stay in business. Howwould you pay your employees?Many companies adopted a pay as you go plan, where ascertain benchmarks were met,some of the funds were released. Well, kiss that goodbye if you are not an attorney.
The main problem with companies not taking upfront fees is that they do all this work, the bank agreesto the modification. They then send it to the homeowner...who realizes they need to make these payments and then they don't pay the modification company. Essentially, a modification company would turn into a debt collector.I'm saying this is always the case, but it certianly does happen quite often.
For homeowners seeking help, therewill still be companies available out there once the law goes into effect, but surely somewill move on to other ventures. Therewill also be a lot of software available for homeowners to help them get their paperwork in order and submit their own files the proper way.
If you would like some assistance with your modification, you can click the links below for a list of companies that can help you.
Well, come February 2011 you aren't going to see much of them. A new federal law will go into effect that bans companies from taking upfront fees. Attorneys can still do it, but even the most reputable modification companies cannot.
Taking upfront fees really wasn't a scam formany legit loanmod companies. Sometimes, a loan modification can take months and months to complete. You have to fax forms into the lender all the time, keep upwith the negotiator (the underwriter if you are lucky) and stay on top of the file to get it approved. It was necessary to take payments and keep the business running during this process.
Doing all that work for no money upfront is not a good way to stay in business. Howwould you pay your employees?Many companies adopted a pay as you go plan, where ascertain benchmarks were met,some of the funds were released. Well, kiss that goodbye if you are not an attorney.
The main problem with companies not taking upfront fees is that they do all this work, the bank agreesto the modification. They then send it to the homeowner...who realizes they need to make these payments and then they don't pay the modification company. Essentially, a modification company would turn into a debt collector.I'm saying this is always the case, but it certianly does happen quite often.
For homeowners seeking help, therewill still be companies available out there once the law goes into effect, but surely somewill move on to other ventures. Therewill also be a lot of software available for homeowners to help them get their paperwork in order and submit their own files the proper way.
If you would like some assistance with your modification, you can click the links below for a list of companies that can help you.