Can You Do Your Own Loan Modifications?

You can do your Own Loan Modification?

I have repeatedly been asked by potential clients and other friends if they can do their loan modification. The quick answer is yes, they can. But the next question is how they can?  Well, first thing is that Loan modification is difficult and there are stumbling blocks on each phase. The first contact is difficult. The good news is that banks have hired more people for loan modifications and the process appears to be simple, but in fact, it is becoming more and more complicated. There is still old mentality of saying No, and it is the easiest thing to say No. No, has very little consequences. A Yes, means more commitment and more work, and these folks does not like to work.

A Word of Caution

Even if still you like to do the loan modification yourself, please take care of the following steps.

1.         Write a good economic hardship letter starting with changes in your job, hours, pay scale, and then your spouse in a similar way.

2.         Make sure you approach the right section of the bank. Only talk to the Loan Mitigation, Home Retention, Loss Mitigations. Be careful about not talking too much with the Debt Collection People. They get commission when you pay your delinquent amount, and they   have no authority to offer you in return.

3.         Don’t be evasive and procrastinate in responding to your mail. Answer them and keep communicating with them.

4.         Make record of each and every document you send them. It is good idea to write a journal of all your mail received and sent.

5.         Get full name, extension number of the person you spoke each time you contact them or vice versa.

6.         When informing them about your financial situation, don’t give too negative a picture of yourself and your income. In fact, you have to tell them that you are still credit worthy and income producing individual, who is temporarily in trouble.

Hopefully, these tips would help you.

Not that I mean to be disrespectful but these are still what I call”over the coounter medicine” which may be good if you have a headache or common cold, but what if you have problem of (god forbid) liver diseases, pancrease, or heart issues or some major problems, and now you need a prescribed drug, see a doctor, a pharmacit and labs need to be done. That is why a qualified licensed attorney who is familiar with the laws of RESPA, TILA, HOEPA, can be very helpful to you.



  1. Words from an Opinionated California Lawyer

    In California, the Department of Real Estate website ( lists the companies that have DRE “permission” to modify loans… add to this list any licensed California attorney, and that is where you should begin your due diligence when you seek help in California. Other states probably have similar laws, so check with your own state DRE.

    My law firm has been getting more and more calls recently from homeowners that were victims of predatory lenders who put them into an unaffordable loan and now fell into the hands of those same people who sold the toxic loans but profess to be saviors… DON’T BE A VICTIM TWICE!

    Do your homework and THOROUGHLY investigate any firm before hiring them to save your biggest asset and the place you call “home.” These scammers are popping up like dandelions on a freshly mowed lawn. They advertise on the Internet, freeway billboards, radio, television, and print media everywhere. Make no mistake, in many cases, these are the exact same loan officers and mortgage brokers who fleeced homeowners the first time around. After losing their jobs with the crash of the mortgage industry, they have found a new way to make ill-gotten profits from hard-working homeowners through loan modifications.

    In California, with very few exceptions (and attorneys are one exception), it is against the law for anyone to take money up front for helping a homeowner who is in default. Don’t trust a company that begins its relationship with you by breaking the law.

    Of course, this is one lawyer’s biased opinion, but one based on many distressing calls to my office every day. And, yes, my firm does take cases against loan modification companies who have violated laws. This field is quickly becoming one of the fastest growing sections for our mortgage law firm.

    – Paul J. Molinaro, Esq.

    • Paul:
      Your comments should be weiged in gold. Yes, not only a grain of salt required to talk to these fake companies but rather the whole sack of salt should be used. Truthfully, I am swamped from these calls from (mostly Caliofrnia companies, no offense meant, I was a resident of the great state of California for 10 years) who wants to work with me, or under my patronage with this loan modification. It seems like it is the new gold California rush. These folks do not have even the basic knowledge of either real estate, mortgage or any other business sense. They expect that they can do miracles. There are different parameters aka guidelines for each bank. One list they would hide from you and would never let you know what they can do. Banks had accepted bailout money, and is contractually obligated to do loan modification. In Nevada, state attorney general and Countrywide had made a settlement to do loan modifications. Similarly, all the big banks had taken money out of this bailout allocations to do loan modifications. Mortgagors are frustrated, wans to throw their home keys on my tables, and get out of their responsibilities. I come across every day at least two, three families who had bought homes like there was never a tomorrow. These folks are average folks who should in the ideal world sued under RESPA and TILA, their mortgage brokers, their real estate agents, their loan companies, but they had no choice at this time because most of the lenders, along with mortgage brokers have either declared bankrtupcy, or close to that and are totally incommunicado with any of their former clients. I get too many calls from these mortgage brokers to “associate” with me. My answer is a firm NO. First of all, under the Nevada professional responsiblity, an attorney cannot associate with a non attorney and share the profits of a legal venture. It is pure unethical. Secondly, these folks are the one who brought this disaster in the first place. They even qualified dead horses to get loans. I know a waitresses in Starbuck Coffee shop, who has bought five homes. Cab drivers in Las Vegas has an average of 3 homes. Shamelesslly, they are dumping these homes. It was their greed which was exploited by these unscrupulous mortgage brokers, real estate agents and greedy banks.

      In Nevada, the Mortgage Lending Division as well as Nevada Revised Statutes makes it illegal for any unlicensed person to do rate adjustement. I agree with you everyone should be very careful of these scam artists who shockingly have a well run ad campaign and knows how to exploit the media including tv ads, radio, web and other channels. A determined efforts of collaboration between attorneys of different states or same state can bring an altogether healthy results from the drerogatory effect and impact of these scam artists. Thanks for your comment. Malik

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