Should I bother with Loan Modification?

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I am current with my payments on mortgage, but am upside down in my loan. Talked to a loan officer who said my loan was too big (it’s over 413K) to do a re-fi under current programs. Received a mailer and called a company that said they could re-negotiate my loan for a much lower rate. (Loan Modification) Can they really accomplish this or is it a scam?

  1. Reply
    John M
    January 23, 2011 at 8:39 pm

    It is probably scam. If your loan were smaller it would be a subject for re-fi but then the loan officer would had have told you that. Those offers are bulk sent even they seem personalized.

  2. Reply
    January 23, 2011 at 9:12 pm

    You can accomplish the same thing a Loan Mod company would do. Get with your current mortgage company and have a list of every monthly expense you have and be ready to spend about an hour on the phone. There has to be a hardship involved to get a loan mod. Simply being upside down won’t give them any reason to negotiate. Job loss, cut pay, current loan is scheduled to adjust, etc, will be needed. Don’t waste your time or money using a Loan Mod company. The actual charge that the attorneys they go through cost around $ 400 and they charge up to $ 4k for that “service.” Its crap.

  3. Reply
    January 23, 2011 at 10:01 pm

    Probably a scam. You do a loan mod with your current lender and don’t need another company.
    Loan mod changes the interest rate on your loan. It does NOT change the amount you owe on your loan. You certainly cannot do a refi, without some special program, since you’re upside down on mortgage. But you may be able to do a loan modification. Keep asking and talk to different people, every month or so. There is some govt money to banks to do loan modifications, but there are limits on it. Check out the programs.
    Benefit to your lender is that you have good payment history and they don’t lose you by you refi’ing with other lender. Benefit to you is lowering the interest rate you’re paying, and thus monthly payments, while you wait for housing market to recover.

  4. Reply
    January 23, 2011 at 10:58 pm

    Unfortunately there are some a handful of loan modification scams out there. But one can be helpful if you use one that is trustworthy, experienced, and reputable. You should try and get a free consultation to see if they can help you. 🙂

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