Stanley,

Two things;

1) NEVER pay anyone to do a Loan Mod for you. If you call any of the mortgage lenders' customer service numbers, they have a statement at the very beginning saying NEVER pay anyone to do a Loan Mod as they will do it for free.

2) If your loan is Fannie Mae or Freddie Mac, both are now partnering with several lenders and a few REALTORS in a SoCal "Pilot Project" to help borrowers through the process of a Loan Mod without any charge to the seller (and no compensation to the REALTOR either). If you qualify for a Loan Mod, your house CANNOT be sold as a short sale as the borrower must enter the Loan Mod program. If the borrower does NOT qualify for a Loan Mod, the home would then be Pre-Approved for a short sale at a specified price.

This pilot project began just this week with about 15 agents in SoCal.

I was on the phone with a FNMA rep in Washington DC today and their main goal is to keep people in their homes and to shorten the processes for both Loan Mod Approval or Short Sale Pre-Approval to just 10 days.

Lastly, NEVER pay anyone to do a Loan Mod.

Best of Luck,

Thom Colby
Broker & REALTOR
Orange County, CA

Dear Stanley,

Currently, Aurora, Citi Chase, Countrywide, GMAC, Litton, Wachovia and WAMU to name a few are some of the major lenders offering loan modifications and are willing to modify loan terms but are severely overwhelmed. Even if you are currently behind on your mortgage a forbearance agreement offered from your lender may be unaffordable. We can still help you stop foreclosure with a loan modification even if your forbearance agreement failed.

Please feel free to contact me directly and I will have one of our top Loan Modification specialists get started on your case right away.

Thank you,

Mitra Karimi
Crestico, Inc.
http://www.crestico.com

Hi Stanley, here are your choices:

First, You should NOT listen to someone who has called you or emailed you "out of the blue". There are ads now being run on radio, TV, and the Internet, for "attorney" groups, who MAY have the expertise to help you, but who are going to charge you $3000-$5000 for the "assistance". Here are ALL your choices.

1.) Do it yourself. Approach your lender, to see what they might offer. ( Be prepared for a LOT of paperwork and lots of phone calls over a couple of months period - it can be very time-consuming.)
2.) Contact a Government resource for FREE assistance. In Orange County that would be the Fair Housing Council of O.C.. ( Of which many of us Realtors - like me - are volunteers. http://www.fairhousingoc.org )
3.) Contact a trusted Realtor or lender, who has experience - and who can do the work competently - negotiating better with your lender, than you can - and who will charge you less than $1000., in most cases, with as much as half, up front. ( I've heard of an average of $750 total, with $250. up front., which sounds reasonable - again, from a trusted source who you, or a friend can recommend.)
4.) Contact one of the attorney groups that you see on TV or the Internet. With those you will probably have to pay a hefty - $2000+ fee - in advance, and thousands more upon successful ( hopefully! ) conclusion. ( Most of the work is done by a paralegal, with not much better training than the Realtor or lender in choice #3.)
5.) Be contacted by someone out of the blue, who you pay from $500 to thousands of dollars, in advance, and who disappear into the night, without helping you a bit. ( THIS is probably not a good choice.)

And finally, good luck, in finding a good solution.

Hi Stanley I'm an Account Manger for a Loan Modification Firm in Riverside and I also agree with some of the comments here.
First of all do not! I repeat do not! pay any upfront fees to anyone, also you should know that Loan Modifications are very time consuming, so if you have the time to spend on the phone with your bank and to do the proper research your best option will be to do it yourself. Otherwise hire a professional, if you can't pay one lump sum ask if they are willing to take payments for their services.
There are many options available to you if you need more information or have any questions please feel free to contact me

Frank Hernandez
909 254-3299
Regional Account Manger
jhernandez@loanmitigationdept.com

Hi Stanley,
Sorry I am late in getting back to you on this. I was actually in Las Vegas for a convention and there was a lot of emphaisis on this very subject. All are giving you good information but you do have options. If you would like to talk to someone locally, I live and sell real estate in Fullerton and I will be taking a class to be a Certified Distressed Property Specialist.

I just want to emphasize that you should be very careful about paying anyone up front for modification services. Currently, there is NO license requirement for this and it should be checked into very thouroughly!

I am here if you have questions..no pressure.

Hi again, Stanley,

You might check out my new blog post here on Trulia, titled "Some Homeowners Are Eligible For Mortgage Relief. Are You One Of Them?" There are links to the new ( as of yesterday.) guidelines, plus a Q & A, that might be helpful.

As I said below, a short sale should be your last resort.

Hi Stanley, good question.

My take on the answers given so far, is that Karen's is the closest to my own, so I agree wholeheartedly with her, with one addition. A short sale should be your absolute last resort, only after you've explored any options you can qualify for, with your present lender(s).

A short sale is only slightly better than a foreclosure, in my opinion. Good luck with finding a solution.

Hi Stanley,

I agree with what's been said below.... I just wanted to add something (because I didn't see it mentioned... I may have missed it though). These days, lenders are open to negotiating a loan modification with you directly. HOWEVER, you typically need to show some type of financial hardship so that making your payments is now difficult to impossible at your current income. In addition, many lenders won't consider a loan mod until you are a payment or two behind.

You may wish to consult an attorney or a loan modification specialist. The banks can be misleading at times and I believe it is very advantagous to have an informed advocate on your side... and worth the additional fee.

I hope this information is helpful and expanding upon what has already been said prior.

Best of luck to you!
Tara

Tara Steinke
San Diego Real Estate Professional
Residential Sales and Appraisal
619-384-6014
mysandiegoagent@gmail.com

HI Stanley,

This is certainly the right climate to be asking this question. I think there has never been a better time to work with your lender to work out a new loan program you can live with. You need to remember that loan modifications were going on long before the current federal program and there are options out there for you. The government program is not the only way for lenders to work with you.

I would suggest first that you NOT pay anyone up front...and talk to your bank. Ask them about what types of programs they offer and what steps need to be taken. I am also finding that some of the non-profit credit counselers are also offering guidance on how to talk to lenders. There are lots of resources out there.

Start with your bank..talk to them and see what happens.

feel free to email me if you would like to talk more...I think you'll be able to find a solution, lenders don't want your home!

Karen

Thank you both for the quick responses. Perhaps the question is bit more complex and I'll call you directly to discuss.

Those are really the only options to lower payments to my knowledge. However part of the plan also included provisions to make it easier to do a short sale or deed in lieu of foreclosure to help borrowers in trouble get out from under and underwater home

Stanley -

Thanks for your question it's on a lot of homeowner's minds these days.

The question really becomes, "do you have regular salaried W-2 income and what monthly payment can you afford". Then you calculate what the principal amount would be for a payment of that amount. If the difference between what you owe and what you can afford is too much to be recovered by the lender through extending the term of your loan to 35 or 40 years, then you will likely not be able to qualify for a Loan Modification. Lender do not simply write off a substantial amount of the Unpaid Principal Balance. There have been some lenders who have written down (forgiven) a small amount and reset payments but not enough to make a difference for the homeowner to keep the property, plus those folks are going back into default within 6 months of the Loan Mod. If you do not have regular salaried W-2 Income to support the repayment of a modified loan, they will not offer it as a solution.

Another avenue is to sell the property as a Short Sale. Simply put, if the property is worth less than the current mortgage balance(s) it is sold with the approval of the lender(s). It is listed with a Realtor in the normal way, offers come in, and you accept one offer (the best one). The listing broker then submits that offer to your lenders and negotiates a Short Sale on your behalf. The lender forgives the shortage in most cases. YOu will have to provide a number of documents to the listing broker such as 2 years tax returns, 3 months bank statements, hardship letter, pay stubs, list of assets, etc. Of course there's a lot more to it worthy of a conversation.

If you go this route, make sure to use a Listing Agent / Broker who is VERY experienced in Short Sales.

Best of luck and don't hesitate to ask if you need any additional information.

Cheers,

Thom Colby
Broker & Realtor
Orange County, CA http://www.1800sellnow.com
Thom@thomcolby.com

Are you referring to the programs announced today? You can see the requirements for those spelled out on my Trulia Blog:

http://www.trulia.com/blog/dave_osborne/2009/03/home_afforda…

If you don't qualify for either of those, you still have options. Feel free to call me at 714-349-5454 to discuss your personal situation for free and with no obligation whatsoever.

Thanks!

Dave