Loan Mods

Sometime last week I got an e-mail from a client of mine with a question about a loan modification he was attempting. Here’s an excerpt:

“Hi Jim;

Was wondering if you knew of any honest Home loan modification business’s?  You would not believe what some of these firms want me to do to have my Loan modified.  From saying that I’m renting my house for $2000 and I’m living in one room (yes that would be 4 people, in one room) or saying that my wife is a housekeeper so that her income can’t be traced…..  Huh!  Their complete lack of any sort of ethics is troubling to say the least.  Anyway any leads to a firm with a smidgen of integrity would be appreciated. thanks,


Unfortunately, I don’t have any leads for him either. I’m yet to have any client of mine be successful trying a loan mod, nor have I heard of anybody else with a successful loan mod story either. I know folks that have worked diligently for months, after being told to stop making their payment, only to have a notice of default filed on their property. I know folks who have accomplished every criteria placed in front of them…only to be rejected at the end of the journey. I’m not sure anybody really gets these things to work.

In case you missed it, a loan modification is a thing that theoretically happens when a homeowner asks his lender to alter the nature of their loan to allow said homeowner to stay in their home. Again, theoretically, the lender will adjust the interest rate to help the homeowner do just that. The problem is, supposedly only 1 to 2% of the modifications are really actually happening.

Vincent’s e-mail really illustrates the problem well. Some of these loan mod folks are quick to tell you the 1001 ways that you should lie to the lender to maneuver them into complying with your request. Often times fees are paid up front to begin the process as well…and then the odds are so greatly against having it all come together if these statistics are real. From what I’m seeing…I think they are.

I wish I had an answer for all this…my advice would be that if you’re considering this option…be really, really careful.


  1. Yep. There are whole bunch that started sending me their pre-screened notices. Here it says I am eligible for stimulus mortgage program ( kind of make their program similar to what the stimulus package) and am skeptical about these tactics. Ah. they offer a too-good-to-be-true interest rate of 4.125 on a loan of around 600k. I just reject them as anything that appears too good to be true comes with hidden problems.

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