How to Find a Loan Modification Firm

If you’re in the market for a loan modification you have a number of different options at your disposal. It’s important to keep in mind that with so many people clamoring to get a loan modification and avoid foreclosure, there are also those who are looking to prey on those who are desperate to reduce the monthly cost of their mortgage. So you should make a careful assessment of all your loan modification options.

Here is a primer on the types of loan modification firms working today.

Loan Modification Law Offices

A mortgage is a legal document and given the amount of legal particulars that are involved with renegotiating that contract, some homeowners choose to hire a real estate attorney to handle the modification. Though lawyers can handle the paperwork associated with a loan modification, it’s not always the case that an attorney will be able to secure the best possible deal for a modification. In addition, a lawyer may charge additional fees for processing. Make sure that the attorney has experience with a variety of modifications and doesn’t mainly have experience with other wings of the mortgage industry.

Mortgage Companies

This is an obvious choice for a loan modification, but don’t necessarily assume that a lender will be able to process a modification with limited fees. In fact, some mortgage companies outsource processing of the loan to another company, so you could be charged additional fees on top of the restructuring of the mortgage. As a loan modification will take into account your credit rating, it’s possible for one lender to offer better rates than another. This is especially true for lenders that may be more risk-averse due to the financial downturn. So do some research into the lender’s recent history as well as how the modification will be processed.

Loan Modification Processors

Loan modification processing is sometimes a trickier option to identify because there are times when a lender is referred to as a processor, even though strict loan processing is another avenue entirely. Loan processing both work with packaging loans to investors, as well as handling the paperwork associated with a modification – including processing payment – without lending any of the actual money. As mentioned above regarding mortgage lenders, this can be an extra step in the process that can be more costly.

A Loan Modification Company

Certain entities help negotiate contracts with mortgage lenders or modification services to get the best rate on a loan modification available. Each case is different and will need to be handled on a case by case basis in terms of where to secure the loan. This depends on the real estate market in a homeowner’s location and that homeowner’s financial and credit history. Basically, what this means is that the loan modification negotiator manages takes into account all of the above issues – which can be fairly overwhelming to the average homeowner – and tries to secure a modification with the best terms available, whether that’s going straight to a lender or working with a loan modification processor.

The advantage of working with a company that specializes in loan modifications is just that: they’re main business is dealing with the loan modification industry, rather than a lender that may have limited experience with modifications and may be spread thin with other types of mortgage plans. This is why going with a firm that is loan modification-specific is a good route to take.