5 Most Important Things to Look For in a Loan Modification Company

Since the real estate crisis began, homeowners have been seeking various ways to avoiding losing their homes and preventing foreclosure. The introduction of loan modification programs led to many unethical companies appearing that preyed on the homeowners who were in trouble.

Since then, laws have been passed to protect the homeowners from such dangerous companies, the most significant one being that no one performing loan modification services is permitted to charge homeowners any fees prior to the completion of the services which they were hired to perform.

If you are looking for a loan modification company, here is a list of the 5 most important things to look for:

1. Licensure

The real estate industry is very closely regulated to ensure that homeowners are not being defrauded. Each state will require Realtors and other professionals in the industry to obtain proper licensing to ensure that only qualified individuals with clean records are able to perform these services. While a license may not be required to perform loan modification services in many areas, it is still very important that you seek a company that has been licensed by their state to perform real estate services, as that will ensure that their is a formal record kept by the state on the company performing the services and that they have undergone a screening process.

2. Contract

This is another very important factor. The contract you enter into with the company providing the loan modification services will determine the outcome of your loan modification and what you will owe them for the services. Make sure the contract clearly states the fees that you will owe and the services that the company is being contracted to perform.  

3. Abiding by Laws

Even if a contract states that you will pay fees up-front or that you will pay regardless of whether or not they have obtained a modification for you, it is illegal and you do not have to pay. A contract cannot require you to do anything that is against the law. Any company demanding any fees up-front is breaking the law and is very likely to be involved in fraudulent activities. Immediately report any such companies to your state’s department of real estate and/or your state’s attorney general. If your loan modification company asks you to do anything that you feel unsure about, consult with your state’s department of real estate or with an attorney.

4. Fees

The fees that you are charged for the loan modification services should be reasonable. Typically, companies will charge a flat fee to perform their services and this fee will be owed to them if your loan is successfully modified, whether or not they save you very much. Be wary of working with any company that demands fees greater than $3,000, and, if possible, try to work with a company that bases their fees on what they save you. This will mean that the company will have to work hard to save you as much as they can because they will have to earn their fees.

5. Company History

Learn about the company providing the services to you; how long have they been in business for? Are the executives of the company licensed and reputable? Do they have experience in the industry? Are they knowledgeable and experienced in the services they are providing? Most of the companies that are found to be fraudulent are run by unlicensed individuals who are operating out of their home or a small office. Many also pose as attorneys or will use the name of an attorney to gain credibility.

Another thing to be cautious of is any company that promises you any results. If a company promises you results or guarantees that they will get you modified, do NOT work with them, as they are making empty promises to gain your trust. No matter how well a company prepares your modification proposal, the decision is ultimately made by your lender, so no one can make any guarantees that they can obtain a modification for you.

PreFore has worked hard to embody all of the qualities that we have mentioned in this article. We hope to have the opportunity to assist you with your modification needs, but if you choose to go with another company, we recommend you follow the guidelines on this page when selecting a loan modification company. Good luck!