The experts say you shouldn’t pay for a loan modification because you can do it yourself. That got me thinking about all of the things that I can do myself. I can change the oil in my car, do my own taxes and buy or sell my own house. But, I chose not to because I would rather have a professional mechanic, CPA or real estate agent handle the job for me.
Before you decide to pay for a loan modification here’s a checklist of what you should do first:
- Contact your lender at least three times. Have you ever called the customer service department at a major corporation? I recently called DirecTV for help setting up a new receiver. It wasn’t getting a signal so I called for support. The first person I talked to told me I would have to schedule a service call for $50. I didn’t like that answer so I called back the next day. This time I was told I needed a special adaptor and that they would mail it to me for free. The adaptor fixed the problem. The lesson learned here is not to expect the person on the other end of the phone to be fully trained or aware of all of the loan modification options available to you.
- Contact a mortgage broker or lender about refinancing. You may qualify for a refinance that will lower your payment.
- Visit the Making Home Affordable website to see if you qualify for a government incentivized loan modification program.
- Consider selling your home. If you don’t want to move because you have kids in school, family in the area or a job close by then this isn’t an option. But, if you have no strong emotional ties to the neighborhood, put the home on the market even if you owe more than your home is worth. Your lender will be open to a short sale even if you are current on the mortgage payment.
If you’re like me and tried all of these options without success it’s time to start shopping for a loan modification company. I chose my loan modification company the same way I chose my daughter’s preschool:
- I got a referral from a family friend.
- I reviewed proof of performance information.
- I checked for complaints.
- I toured their place of business.
This worked for me and I’m very satisfied with the results so far. Admittedly, my loan modification is not complete. It usually takes 3-4 months to get a file completed and I’m only about 2 months into the process. However, they have kept me up to date and are moving forward as promised.
Keep in mind that it can take up to 100 hours to complete a loan modification yourself. If you have 2-3 hours per day for the next 3-4 months then the odds are in your favor. If you don’t believe that this is true then check out this story from ABC News, called ‘The Runaround’, that aired last month.