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There are numerous reasons not to do a loan modification.  Our stats show that only 1.8% of loan modifications are reducing the principle balance which is the main problem for most homeowners right now.  Our stats show that 31% of all loan mods actually result in an increase in payments. Some people are reporting to us that the #1 loan mod strategy is turn loan into 40yr, turn the payments into OPTION ARM, add interest onto the back of the loan and do the lower option arm payment for a short term – usually 6 months, this just delays the problem.  We have a great handout on the statistics of loan modifications, as seen here: http://foreclosurenightmare.com/loan-modification-risks.pdf . Very few of the loan modifications result in helping homeowners long term.  Many may get a little bit smaller fixed payment with their interest rate, but this is a minor fix as most people owe $50,000 to $100,000 too much on their house that we have recently found.

In our hidden risks of loan modification hand out you will see that 31.57% increased the payment, 26.58% have an unchanged payment, that’s 58% that are unchanged or increased, these aren’t good stats.  It also shows how many re-default on the payments in the very near future.  Many of the people I have talked to in the business claim to charge $3500-$5000 upfront just to attempt the loan modifications, sometimes I have heard of $3500 fee to the broker/negotiator as well as payments the homeowner is behing, often the homeowner doesn’t have that money.  We find that the main problem is that homeowners owe too much on their house and what they need to do is just negotiate down the principle balance and sell the house and plan on going to get another house in the future.  We can help you with the short sale process, please just give us a call and we can help out, we are experts at the short sale business.  Please go to www.WeCallYourBank.com and fill out your info.

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