When talking to sellers who are in trouble, the topic of loan modification will always come up. You need to have some basic information to give to them.
First of all, there are very tight qualifications for this process and it ain’t easy. If you make too much, you are turned down. If you make too little, you are turned down. You have to learn all the ins and outs so you can help the homeowner face reality if they don’t fit.
This is something the homeowner can’t do themselves. If you make one mistake on the loan modification application, they will turn you down flat and never tell you why. You need to find someone to do it for you who is reputable.
In addition, make sure you warn them about all the attorneys out there who are taking retainer fees upfront to do a loan modification. Then you are being charged by the hour so there is no end to the cost. Many of them don’t even bother see if you fit the qualifications before they take your money. There is a Ca. law that says that you can’t take money upfront but the attorneys get around this by calling it retainer fees.
There is also a new Ca. law that says that the bank can’t foreclose while they are pursuing a loan mod. However, it is possible that the people from the bank who are doing your foreclosure don’t know Ca. law and will do it anyway. You can’t trust that the bank will behave themselves. I wonder what the penalty is. Unless it’s stiff, the bank will count on the fact that you will not do anything to complain.
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