If not have you tired working with an 8 dollar an hour HUD agent to get a modification- try to get their their attention as well.

There are plenty of scammers out but also alot of lawyers based groups getting great results- now you want to deny future borrowers access to counsel.

There are plenty of atty’s doing a fine job (NPV analysis, audits, professional underwriting) and putting forth alot of man hours to not get paid.

If the FTC wants to support the banks (like they always have) maybe they should encourage the banks to reach out more rather than taking government bailout money and providing 8% of those qualified for HAMP an additional modification (cough) (cough) predatory loan.

Charging for loan mods at the completion of the mod is a good idea. Why? Well, it will motivate folks like yourself as well as the predatory mod companies to qualify a consumer up front.

If chances are high that the mod will be accepted, then you’ll take the client.

If chances are low that the mod will be accepted, then you’ll not take the client’s money.

Today, loan originators earn their fee at the close of escrow. This simple shift to apply the same standards to modification people is not only necessary, but useful.

The predatory mod companies will go do something else, like predatory short sales, (leaving regulators to deal with that mess) and the mod companies who are in it for more than instant money will continue to survive.

You had me up until charging clients an upfront fee.

I have seen too many loan mod scams that take money and don’t do the work. Even worse I have seen homeowners who have lost their home after paying an upfront fee to a modification company.

Anyone who is actually going to work the file should not have a problem with this.

The way to avoid working on files that don’t get modified (since you know ALL of the programs) would be to do a FREE financial analysis that determines likelihood of success.

I also do not believe that principal reduction is fair to the investor in the loan, like my 401K, and your parents pension fund.

Bottom line is there should be plenty of room to adjust the rate down to the floor of 2% that will allow for capitalization of arrears and a lower payment.

If the borrower can’t afford a payment at 2% they probably shouldn’t be in that home.

The only way capitalizing arrears would cause a problem in the above case is if you have a borrower that hasn’t made payments in years.

You are correct – banks are not providing the assistance they should be, and most homeowners can’t get through the process on their own. The banks are lying to borrowers everyday and denying loan modification to people who actually do qualify.

Today, the government has chosen NOT nationalized the banks. Seeing as how the banks are still in charge, they are not going to slash principal balances on loan mods for fear of investor lawsuits.

You want to force the banks to “give” the homeowner the best modification?

There are many consequences of doing that.

One consequence would be that we will likely see a gi-normous amount of people defaulting so they can get their principal balance slashed.

Another consequences would be that no investor would ever want to buy our mortgages. We return to 1950s style lending. 50% down and rates go up.

The government is now giving banks/lenders cash incentives to facilitate a short sale when the homeowner does not qualify for a Home Affordable Refi OR a loan modification.

Short selling is a good option for homeowners who will likely re-default on a loan mod. Why not short sell now, avoid a foreclosure, and begin to rebuild credit today instead of playing extend-pretend only to face foreclosure or selling a year from now when even more inventory will drive prices down further?