That's a good question. If your bank is offering you a loan mod and the terms work for you than you should take it, then get a refund from your loan mod company. Look for a solution that offers a permanent fix. ie. Many loan mods are for a 5 yr - 7yr term then the rate goes back up. Also see if they are willing to offer principle reduction. There is a dirty little secret that the loan mod companies don't want you to know.
1. You can do the loan mod yourself. (it's not that hard but it does require patience, some time and un-emotional persistence)
2. There is a FREE government paid resource in San Diego that will do it for you. (link provided)
3. 100% of the loan mod companies originated from starving Mortgage Brokers or starving Lawyers who saw a way to make some money in the Real Estate game again. (Ok maybe not starving because they made enough money in 2003-2006 to keep them going, but looking for a new revenue stream)
The statistics show that 74% of Loan Mods end up back as foreclosures when there is no principle reduction.... WHY? ( If you plan on staying in your current home for the next 15-20 years the stuff I typed below doesn't apply and don't waste your time reading it.)
Because after the homeowner gets a chance to take a breath and their payments are stabilized/affordable they start analyzing their situation. If they did not receive principle reducition and the are still upside down in their house (they owe more on the total loan than the house's current value) they realize they are locked in their house until the value returns which will most likely be 10 - 15 years.
This means they can't refinance, they can't use equity for home improvements and they can't sell without coming out of pocket large sums of money. There are roughly costs of 10% of the value of your house associated with selling your home so unless you have at least 10% equity you will have to pay the difference out of your own pocket. Most San Diego homeowners that are in a negative equity situation (they owe more on their loan than the house is worth) are negative 25%-65%. This means even though your loan is for $500,000 your house may be currently valued at anywhere from $250k to $400k. The value of your house would need to be $550,000 for you to break even. This is where short sales make a lot of sense.
Ana, I am certain this is a not an enjoyable experience for you but it doesn't have to be painful. The reality is there is light at the end of the tunnel not matter what direction you take. Just make sure you take a deep breath and understand the situation fully before commitiing your self and your family to a short term fix that carries long term consequences.
http://www.dre.ca.gov/cons_drs.asp That is the list for you to see the DRE WARNINGS!!!! Get familiar with this site everyone!!!
Are you saying you paid MMS?
If so you may want to contact the Department of Real Estate.
Advance fees for loan mods are illegal and have been since oct 2009 If they were in the middle they should have refunded money to you.
FYI It is a very good idea to consult a real estate attorney and a CPA prior to doing anything.
You can always do your own loan mod and if you need help go to hopenow.com or
http://www.southern-california-home.com has more free govt links
So Cal Homes Realty
There are many other options available. You can download my free report on "The Truth About Mortgage Modifications" below. If you are going to try to do a loan mod do it yourself on the GOVT website http://www.makinghomeaffordable.gov Do not pay an upfront fee to anyone for any foreclosure prevention services. If it is not NO COST, NO FEE, NO CHARGE to you...RUN! Good luck
Contact your bank immediately and make sure they are aware of a loan modification! Your property could be forclosed on. There's a possibility the left hand of the bank has no idea what the right hand is doing.
I would have the bank do the loan mod while continually monitoring the situation making sure you don't recieve a notice of trust sale.
If you determine the loan mod is unreasonable and would like to get the facts on short sales, visit my website at http://www.queststarrealty.com/ShortSale.ubr
If you can get someone to help you for free to assist if you run into trouble that would be great. But either way contact the bank and try to slow down the foreclosure process.
First Weber Group
Certified Distressed Property Expert
My company offers free loan modification consultations and we can tell you pretty quickly if you'd qualify for the most available type of loan mod which is the Making Homes Affordable program. Even before the new law was passed, our policy has always been to process the modification with no upfront fees (we were ahead of the curve on that!). If we succeed then we charge you and if we can't then we don't and we can help you with your other options, its that simple.
Please feel free to email or call me if you'd like me to take a look at your situation with you or if you'd prefer you can come discuss your mortgage face to face; our company is having a free loan mod workshop on January 30th in the Eastlake community. However, if your Notice of Default has been filed, there's no time to waste and you'd want to address this issue as soon as possible.
Like I said, feel free to call, I'd love the opportunity to help you out.
Safe Harbor Money Management
CA DRE License #01863531
When was the notice of default filed? Have you considered a short sale? You will need to make a determination as to whether you want to short sale, continue a loan mod or allow the home to foreclose, but you can not do a loan mod and short sale at the same time. If you want any chance of the modification you need a good attorney. It does not need to cost too much. A good friend of mine is working on both my brothers home and my mothers home http://.www.shoffmanlaw.com. He is good and used to work with kerry steigerwalt pacific law center.
If you want FAQ on short sales visit my website http://www.TheLaJollaLife.com. I am an Asset Manager for many of the major banks and REALTOR here in San Diego. I work with many clients in your situation. I am here for free advise anytime 619-823-2120.