Loan Modification Companies

There are so many agencies out there that offer to help rescue you from foreclosure. We've done stories on the bad ones before. Personally, and this is my OPINION: I would not pay for this service.

Thursday, February 26th 2009, 7:50 pm

By: News 9


There are so many agencies out there that offer to help rescue you from foreclosure.  We've done stories on the bad ones before.  Personally, and this is my OPINION:  I would not pay for this service.  This is something you can do on your own.  However, my number 1 piece of advice with this if you choose to pay, do not pay up front! 

There are several non profit organizations that want to help you for free.  Call them even if you're not in foreclosure, but are struggling with your payments - they can help!

We deal a lot with Consumer Credit Counseling Service of Central OK - 405-789-2227 or 1-800-364-2227.
Another HUD certified counseling center is Neighborhood Housing Services OKC" - 405-231-4663.
And nationally, there is the Hope Now Alliance - 888-995-HOPE.

Websites:
www.cccs.ok.org
www.HopeNow.com

Then there are for-profit agencies like the one featured in tonight's Consumer Watch.  Here's a copy of their letter they sent us explaining what it is they do:

Letter from 21st Century

Also, the president has a plan to help homeowners stay in their homes instead of it going into foreclosure.  If you want to read up on what that entails, click on this link:

http://www.whitehouse.gov/blog/09/02/18/Help-for-homeowners/

Some notable things about the loan modification plan:

- A loan modification is a permanent change in one or more of the terms of a mortgagor's loan, allows the loan to be reinstated and results in payment the mortgagor can afford.
- Legal fees and related foreclosure costs for work completed and applicable to the current default episode may be capitalized into the modified principal balance.
- People who choose a loan modification are typically people who had a certain level of income when they purchased the home and today that income has been dramatically reduced. Some may be facing a rate increase or a payment recast if negative amortization has pushed the principal balance to, say 115% or 125% LTV. Most purchased at 100% LTV, some decided on interest only loans, or interest only for a set period of time, in order to achieve a lower payment, speculating that future appreciation would bail them out at the next refi. They have two big problems: Negative equity AND an unaffordable payment.  - - - They typically have other consumer debt as well as mortgage debt.
- If homeowners didn't read their mortgage documents the first time around, they sure better read their loan mod documents and make sure they understand all the possible consequences.

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