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Do It Yourself?

Most of my modification clients tried to modify their loans on their own. They tell me that after getting nowhere, they decided to hire me.

With the non-attorney modification firms there is either no attorney on staff or you never get to talk with the attorney. Most of those firms are out of business because of the new FTC rule that allows only attorneys to collect fees up front.

Ours is a small firm. My wife and I are the only employees. You work directly with us. We talk directly with your lender.

Even if modification can be done without a lawyer’s assistance, there are a lot of legal issues which come up at this time. Can you reinstate? How is income calculated? How can a foreclosure be stopped? When can suit be filed? What about those MERS loans and the “lost note” defense? How would foreclosure, short sale, or deed-in-lieu of foreclosure work? Will you be liable for a balance? Should you go through mediation?

How are second mortgages handled? Can rates be reduced? Is it possible to settle seconds them for less?

What is likely to happen if you don’t pay your credit cards? Is it possible to settle them for less?

Should you consider bankruptcy? Are you crazy not to file bankruptcy? Under what chapter should you file?

Can you handle your own modification? Yes. Your bank might ignore you for long periods of time. You might have trouble finding someone to talk with. You might not understand how to fill out the forms and generally speaking how the game is played.

And there are rules to this weird game. I have spent hundreds of hours studying them. You may be better off putting your time into your job and your family and letting us do what we do well.

Your lender might actually give you some concessions. Your lender might give you a glorified forbearance agreement or a temporary interest rate reduction. Your lender may not give you permanent reduction.

I have had people come to me for review of their modification, and often I see the lenders giving modifications but not giving the rock bottom modification that I know the people deserve – according to the math.

The reasons why most borrowers who receive modifications later end up in foreclosure is because their modifications have not dropped the borrower’s payments enough.

Lenders will discourage you from “wasting your money” by hiring a “third-party modification firm.” They make no differentiation between attorney modification and non-attorney modification.

For example, the Chase website disparages outside assistance and includes attorneys in its disparagement. With other lenders it is not clear whether they are discouraging borrowers from hiring attorney modifiers as well as non-attorney modifiers.

Maybe such lenders are disparaging any kind of representation. It is the same way insurance adjusters discourage you from hiring an attorney to negotiate your personal injury case. The lenders want to be free to take advantage of you. I believe that lenders who discourage borrowers from seeking counsel are setting themselves up for a class action suit.

My typical fee for a residential modification is $3,500 paid up front. The up front fee can be paid over a period of two, three, or four months. Paying this fee should not be difficult because you are going to stop paying your mortgage.

My contract calls for a bonus when the modification is done. You spend more than this anytime you do a refinance. This is not a lot of money in relation to the potential savings possible.

If I can get you an interest rate that is even a quarter percent better than what you could have gotten on your own, this will more than pay for my fee over the long term.

It is always better to have someone who knows the lay of the land negotiating for you. Even attorneys hire attorneys. When I am in a legal bind, I hire an attorney who specializes in the appropriate field. Attorneys have a saying: “One who acts as his own attorney has a fool for a client.” It is hard for you to be objective about your own case. It is hard for you not to be over-eager regarding your own case and give away too much information or settle for less than you could have gotten if represented or to get your feelings hurt and damage the negotiation process.

Most important, lenders know that I know how to sue them. They will take me more seriously than they will a non-attorney modification firm or you if you represent yourself.

You have a right to be represented in a crucial matter such as saving your home.

You may call me at 425-771-1110. You may fax me at 425-776-8081. You may click here to send me an e-mail.

One Comment

  1. I have a 15 year mortgage, and have 75% equity on my home I’ve owned since 1988. My wife has been out of work since August 2010. I have had to cash in my IRAs to stay pay my bills, and these funds are nearly depleated. I asked my mortgage company if they could:
    (1) Put me on a 6 month plan
    (2) Change my mortgage to a 30 year.
    They said that we do not qualify because our current income is not sufficient.
    My wife’s unemployment is temporary, but we could default before she gets a job.
    HELP !

    As I understand, the Obama Mortgage Modification Plan is the same way: If you become unemployed you can not get any help till you get employed !

    Thanks,

    Dan Richard

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