Here's a sad story from Trulia on Dec 16, 08:
This sounds like exactly the type of company to steer away from. Seems like many are coming out of the woodwork - many are "former" liar loan specialists, who were instrumental in causing our nation's present financial crisis.
As Tony has answered, you can do a loan modification yourself. You should start with talking to your lender, to see what they might offer. Also, as of March 4th - next Wednesday - lenders should have guidelines, imposed by the administration in its Homeowner Affordability and Stability Program, to further assist troubled borrowers - especially those who want to stay in their homes.
The paperwork MAY be daunting, so an advocate - neutral 3rd party - may be able to not only help with that, but be able to negotiate better with the lender.
There are at least two attorney backed companies lurking here on Trulia in a big way. Take what they say with a grain of salt, and get at least one other opinion. Do NOT fall for a "pay in advance" solution. Any agent or company worth their salt should be able to take your case on a contingency basis.
Some Realtors have some experience in this situation and might be able to assist you for nominal fee, with "satisfactory results completed". But I would definitely wait until the President's new program is fully up and running - probably within a week, before commiting to anyone, for help.
Let's say you paid 600K for your house and have two loans 1 for 480K and 1 for 120K. Let's also say that today's FMV is 350K, do you really think the bank will refi you at $225K? That's a $255K loss for them. If they foreclose on you, and sell the house at $350k, they lose $130K. What's a more likely scenario?
There is an FHA program called Hope for Homeowners that will let the lenders modify you to 96.5% of today's FMV in exchange for future equity sharing. This is a great program...but no lenders are willing to offer it.
I smell scam. This PRG scheme sounds very similar to one that Noveuax Riche has trained people how to do but it is all just very underhanded and quite honestly, skeevy.
You can do your own loan modification as well as any attorney or realtor. Call the bank yourself...if you have no equity and are behind on your payments, they will work with you. If you have equity, they will foreclose on you and take your equity. If your bank won't modify your loan, you can short sale your house through the preferred realtor of your choice. You don't need to pay anyone upfront to figure out the best scenario for you.
Thats my 2 cents worth as an investor/hobbyist with a nephew who just went through what it sounds like you are going through.