Loan Modification Burn

I’m thinking this is the way we need to go with are current mortgage, primary res. We were in an ARM, we’ve scraped and scounged and sold off all we had, that would sell. To meet the higher mortgage interest rate. We are currently 1 month behind.

Here’s my ? How do you find a decent loan modification company to work with?

The first time our rate adjusted, we said well we’ll sell the timeshare, that turned into a major ripoff to the tune of 1000.00 we didn’t have! We ended up losing the timeshare and the 1000.00.

We do not want to be part the current stats on home foreclosure, we would like to keep our home and should be able to afford it if we can get current with a lesser interest rate.

How do we go about researching these loan modification companies? What are some of the red flags that say walk away?

BURNEDONCE

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Hello Burned Once,

Have you tried contacting your lender and requesting a loan modification?  You will find that it is getting easier to complete a loan modification – not more difficult. 

With the advent of the Housing Bill signed last week by President Bush, the floodgates and survival line to Fannie Mae and Freddie Mac has been opened.  As a result, last week Freddie Mac pushed out foreclosure timelines (meaning slowing down the pace of foreclosures) and doubled servicer compensation for completing loan modifications.

Last week Merrill Lynch agreed to sell $30.6 billion portfolio of collateralized debt obligations to the private equity firm Lone Star Funds for $6.7 billion.  That’s the equivalent of selling a $300,600 mortgage loan for $67,000.  There’s a high probability that these private equity firms will be inclined to rework the loan to make sure it remains a performing asset.  Again, that’s welcomed news for homeowners.

So, I believe now that FNMA and FHLMC have been ‘bailed out’ and the CDO toxic waste is unloaded to establish prices in the marketplace, loan modifications and other workouts will proceed with a greater ease.

Sorry, I didn’t answer your question specifically.  I’d say read loan modification felons, take two aspirin, and call your lender directly.  Every borrower should read the articles on the Broken Credit Blog regarding Loan Modification and first attempt to complete a loan modification with their lender directly.  That’s my opinion as of this time and date.

Thanks for the questions and hope this helps.

Paul