This has been a hot topic here in Socal,with brokers and attorneys alike jumping into the fray.There are loan mod outfits here in los angeles asking for a huge upfront fee( $3,000- $5,000)on the first phonecall without seeing any docs or talking to the lender first, and will also take fees from homeowners who have lost their jobs.( every homeowner qualifies!) Moreover, one "law" firm I know of using the same tactics will offer a bankruptcy consulation "if all else fails" for an additional retainer fee.Interesting, although it does sounds like a conflict of interest. Also worth noting, there was no clear refund policy, only " we will give them a bill".To top it all off, I was informed by the CA DRE recently that even the people on the phone prospecting for "clients" need to be licensed, which is a question that rarely, if ever comes up at the job interview at these companies. Opinions? Observations?

Johnnymansions, Thanks for the heads Up !

Who can you trust? Who can you refer your clients to. There are no "Experts", Guidelines, or Rules. Every Lender is different and every homeowner is different. So there are no Guarantees.

I'm told (in articles and the like) don't let your client negociate their own loan mod, because Lender/Banks are just as Preditory... they "Pretend" to want to help, string the owner on, and then foreclose anyway. The homeowners give too much information, say things they shouldn't. Yet someone with knowledge could have structured the package or found a solution to the advantage of the homeowner that could have delayed long enough for the homeowner to get an income again and would be able to do a workable loan modification.

The point is whoever does it, it won't be free. It's time consuming, complicated, & time sensitive with no guarantees.

Without legislature, the LENDER is making the rules, and going back on their word. Going thru the motions with some homeowners to satisfy Government "Bailout" funds... and few lasting results are really happening. That maybe starting to change.

The continuance of dumping foreclosed properties is driving down values further, and now the fear of job losses and unemployment are worsening the situation for homeowners, buyers, and lenders who aren't.

There are a number of companies doing loan workouts "ONLY IF IT WORKS" otherwise no charge, but they are working to get paid somewhere ... and rightly so.

Meaning if the loan mod fails, we want your Short Sale business, take a referral fee, or require a listing. Again sounds like conflict of interest ? Maybe, but Maybe Not.

It doesn't seem to matter what profession is out there, it's difficult to find the "Right One" Doctor, Therapist, Surgeon, Lawyer, Realtor, Accountant, Builder/Contractor, etc that will be good for your specific circumstances. Some quote low, then sell up on services, or charge high for change orders and Upgrade fees. Some seem high, then actually save you money. Some have better imaginations, some communicate better. In the case of the "bankruptcy consultation if all esle fails" the client could take that stage of the process to another firm if they feel they weren't adequately represented.

What concerns me are the firms on-line, fill out these forms and give us your credit card with up front fees of $950.00 -$1,500.00

I at least would want to meet in person, the person I'm going to be giving my money, my social security number, my credit information etc. and would like to see somekind of creditials and stability that they will be in business tommorrow.

Butterfly is right! There are several good companies out there doing loan modifications with no up front fees. I have referred several people to a company doing Minnesota Properties with no up front fees. They are only paid if they actually improve your situation.

I would agree that Loan Mod "companies" should not charge upfront fees until the lender agrees to a workout for the customer. What is downright scary is getting a call from an "attorney's office" offering to do a loan mod and telling people that "only an attorney can get you a principle reduction". There are boiler rooms in Los Angeles that are doing this as we speak, and getting away with it.The way it should be done is- if the loan mod is unsuccessful, the customer should get their money back.

I wrote about this in another thread about the banners popping up around the Los Angeles area cities by attorneys advertising their services as Loan Modification and Bankruptcy on the same bilboard, whether it is a large commercial poster or a bright orange plastic banner one across their office building.

I question what their real intentions are. Is it to help or to hurt the struggling mortgagor. As real estate licensees, we could be and would be sanctioned for such practices, but in this case the attorneys rule.

How many of you have sent your clients to Hope For Homeowners for advice?

I've sent a number of clients to hope for homeowners, but have stopped recently. I called them directly and was very let down by their knowledge. Perhaps the individual was over worked or new.

I have a hard time sending people to loan modification agencies as well, in my heart I just don't believe they really offer much more (if anything more) than someone can do making the phone calls themselves.

So much hinges on your lender, maybe if this new BK law passes things will change, but really, it doesn't matter much who is acting on your behalf, the lenders are the ones who have to step up to the plate for a modification to work.

Very true and you are right on. Last person I sent called me back and said the rep was rude too.

Is it possible to for anyone to talk to the lender/servicing company first to determine if they will even consider a loan modification before the client is charged a fee??

I've heard from others that the no-fee, non-profit programs designed to help homeowners that are upside don't really work because 1) they haven't worked; and 2) that program in voluntary for the lenders (I have not substantiated these remarks).

All bad apples aside, business owners know collections is an issue, so that is why money up front is important, and even moreso in times like these. But to get the money and run is just ruthless.

I've recently partnered with a broker here in L.A. who is willing to offer Loan Modifications without ANY upfront fees.
The homeowner only pays a fee if their lender agrees to modify the terms of the loan based on what the homeowner can afford on present verified income.I think this is admirable since lots of loan mods are not successful, which means many homeowners will lose part or all of the upfront fee, which can be anywhere from $2,000- $5,000. Thoughts? Observations?

We can debate this over and over. I do not like the risk you face of losing your money when you likely do not have any since you cannot pay your mortgage.

But, charging the fee up front really is the only sensible way to provide this service. You are hiring legal council to represent you in modification of your mortgage.

The result are always undetermined. If you hire an attorney to represent you in a case you always run the risk of a negative result.

We are the rare exception.

It is true there are some so called law firms that claim they can help anyone, that is wrong. To qualify you have to have a legitimate hardship and you have to have income. The source of income is flexible, however it has to be verifiable and sufficient to meet the lender guidelines.

I believe there is a bill in the works here in California that will make upfront fees on loan modifications a thing of the past, not sure when it goes into effect, but it is probably a good thing for the consumer.