Loan Modification Companies

Loan modification companies are moving into Lonnie's area, and he wants to know if he should bother with them.

QUESTION: Lonnie asks Dave about these loan modification companies that are moving into his area. What are Dave’s thoughts on that? Dave tells him of the good and bad to look out for.

ANSWER: There are legitimate people who have a track record and know what they’re doing in a short sale process. But my gut feeling is that 70% to 80% of them are brand new to the business and bought it in a box. They think a bunch of people are in trouble, so they’re going to do loan modifications. Last week they couldn’t even spell loan modification, and today they own a business of it.

If I were going to consider using one of those as a consumer, I would do a lot of investigating into the history of the person that I’m hiring. I would want to know how many times they’ve done this, how long they’ve been around the banking industry, and the mortgage and real estate businesses. How long do your cases take to get modified, and what percentage of your cases get modified? If they say something like ‘everyone’s doing this, and I’m new,’ then get them out of your house.