Whether or not a modification is approved completely depends on the investor guidelines for the loan. Those may change from time to time, but they are what they are. A lot of these loan modification companies make promises they can not keep. They have no control over investor guidelines. The outcome of the request will be based solely on the guidelines. If the borrower does not qualify for a loan mod., there is nothing a loan modification company can do to get it for them.
Why would a borrower pay a loan modification company to do something they can do themselves. Better yet, something they can get done for free at their local HUD office.
There are two circumstances when a homeowner should run from a loan modification company or individual:
1) if they promise results. No one can make that promise. Again, it is all about the investor guidelines.
2) if they charge an up-front fee. Odds are that they are going to "take the money and run."
I am amazed, shocked, and horrified by the number of people in the world looking for ways to steal from a distressed homeowner. They are capitalizing on fear and there is no punishment harsh enough for them.
First off I have no knowledge of anyone using these companies though my experience with these debt resoution companies is they are running on the edge of fraud capitalizing on peoples hardships. The few situations i ahve first and second hand knowledge of is they are charging people what people can do at very little cost by simply picking up the phone and talking to the bank.
The problem is that when people call the bank they get the debt collectors and not people at the bank who can really help first. This heavy handed collections approach is relatively understandable but this system enables shady out of state boiler room operations to make a quick buck and disappear.
There are many reputable non-profit companies that can help. Those would be my first choice if the sellers dont want to do the work themselves.