‘Your lenders are prepared to negotiate’, a column today in the Arizona Republic penned by Rick DeBruhl, a consumer reporter for 12 News, the NBC affiliate in Phoenix, advises you to “Avoid loan-modification companies. While there might be a few good ones, I hear from too many people who have lost money with no result. Better yet, find a certified counselor for free. You can even try it on your own. Just don’t give up.”
Virtually every story I have read about loan modification companies, written or broadcast, by the mainstream media comes with the same disclaimer, which usually goes like this, “there might be a few good ones…”, or “legitimate loan modification companies do exist, but…” In the very next sentence they then proceed to blast an entire industry. Whatever happened to objective news reporting?
If these legitimate companies exist then why don’t the mainstream media interview the company’s principals? Better yet, how about actually interviewing the people these for-profit loan modification companies have helped? The mainstream media has no trouble researching, finding and publicly humiliating the bad guys (this is deserved most of the time). Why don’t they put the same time and effort into profiling the good guys?
This is why…because every story needs a villain and right now for-profit loan modification companies fit the bill perfectly. Admittedly, the industry as a whole has done little to boost its public image. The illegal roadside signs and the poorly produced radio and TV commercials by personal injury law firms now doing loan modifications paint a very sleazy picture of the loan modification industry. Couple that with the fact that the industry does not have a unified voice and you get a perfect target for the mainstream media. After all, if the good guys don’t collectively yell and scream every time a column like Mr. DeBruhl’s is published or broadcast then they must be corrupt, right?
It is a fact that far more consumers have been scammed or ripped off by financial advisors, accountants, attorneys, realtors and doctors than have by loan modification companies. Don’t believe me? Research your local bar association, real estate licensing division, or board of medicine website and read through the laundry list of complaints that exist against their members.
The mainstream media shies away from reporting these individual complaints because they recognize, as the general public does, that one bad apple doesn’t spoil the whole bunch. More importantly, the mainstream media refrains from unilaterally dismissing any of these industries as a scam because they will feel the wrath of powerful organizations like the American Medical Association or the National Board of Realtors.
Until there is regulation and a unified voice for loan modification companies these attacks will continue. And the loser in all of this, as always, is the homeowner. Contrary to what Mr. DeBruhl wrote in his column today, most lenders are not ready to negotiate. Most of my clients have done exactly what he suggests and have gotten absolutely nowhere. The certified, “free” counselors are inexperienced and overworked. And going it alone? I just spoke with a prospective client on Friday who has sent his loan modification package to his lender three times and they still can’t find it.
The bottom line is if you pay an attorney to write a will and trust for you, an accountant to do your taxes, a realtor to buy your home and a mortgage broker to secure a loan for that home, wouldn’t you also want a professional to modify your home loan? Use the same criteria you did to select your attorney, CPA, accountant, realtor and mortgage broker to choose a loan modification company.