Loan Modifications, the new Economy?

So you are out of work. Behind on your mortgage payments and facing imminent foreclosure. You are about to be homeless...or worse be forced to live with your parents or in-laws.

What's a "home owner" whose home is really owned by the Bank to-do? Panic? Curse the Gods? Curse the last administration? Go to the casino and bet it all on black?

Well, unless you have a rich Uncle or a Angel in your back pocket you may have to deal with the "Certified" professionals that are ready to renegotiate your loan and save your home.

But what is the deal with these professionals with years of experience in foreclosure laws and negotiation techniques that call you (or you call them) to help the inevitability of losing your home. It is funny, that all of the sudden, every body is an expert on this subject.

So what do the experts do for you?

Well, this topic is clearly an important one and very much on every-bodies mind. The housing market has been seemingly inflated to the point where so much money was being made that no body really considered any practical accounting practices on balancing the books, or more specifically that the Adjustable Rates would in-fact fluctuate to the disadvantage of the home owner.

It was a shady deal then and is a shadier deal now. It borderlines criminal, but it is quite legal.

The current logic of Loan Modifications run like this. The banks or the lending institution wants to own your mortgage and not your home. A negotiator (typically a lawyer), will scrutinise the contract you have signed for ANY violation of law that they can use to leverage an amicable negotiation to the home owner's favour. Typically a request to lower your interest rate and put it in a fixed rate as opposed to an adjustable one.

Typically the account can be temporarily frozen until a arrangement can be negotiated and agreed upon by both parties. There is usually a "fee" attached to this "service". But the logic is that this "fee" is more favourable to doing nothing and spending more, damaging your credit, and most often losing your home if the original terms are not met.

Fees for this "service" often range from $3,000 and up often depending on the value of the home and the home owners ability to pay.

The legal territory for foreclosures and the negotiation for these foreclosures is quite new. Very few experts are truly experienced in this as this is new territory for everybody, including the current administration.

The only real advice I can give anyone is to really check out the people who claim to be experts. A few have been less than honest in what they are capable of doing so due diligence is always the order of the day. Always ask questions on any legalise they tell you and read (or get your lawyer to) any contract you are meant to sign. Be especially careful of disclosing your social security number to any 3rd party.

You may be afraid of the Marshal coming to your door with an eviction notice but do not let that fear rule your head. These are very uncertain times and no one is really that experienced so keep your thinking cap on and do not be afraid to ask for clarification on any of the services that are offered in this new Loan Modification Economy.