Phoenix AZ real estate has led the country in price decline in the last 12 months; Down nearly 31%, according to the S&P|Case Shiller index.
One of the unfortunate byproducts of troubling times are the proverbial sharks who smell blood in the water. Each day, in Phoenix AZ, I hear of new foreclosure scams in which unscrupulous parties take advantage of the unknowing, trusting and desperate who are facing being kicked out of their homes.
The most common scam promises things like “stop foreclosure now!” or “fix your mortgage now!”. However, after an upfront fee (usually equally to one months mortgage), no work is done on your behalf.
The companies call themselves Loan Modification companies.
A Loan Modification is a procedure whereby a loans payment plan is altered due to the hardship of the borrower. This can include the rate, term and monthly payment amounts.
The problems is that Phoenix AZ loan modification companies are currently not required to be licensed and are completely unregulated. Since there is no loan originated, there are no mortgage and banking laws to regulate the loan modification industry. Which means that anyone, and I do mean anyone, can start your own loan modification company today. In fact, after one quick google search, I found more than one entrepreneur offering his “quick 10-step guide’” to starting your own loan modification company.
Please don’t get me wrong. There are a lot of honest loan modification companies doing good work and successfully keeping people in their homes. Just be aware that there are no requirements to be in the loan modification business, so there are dishonest people praying on frightened homeowners promising hope with no substance.
Here are a 7 tips to follow when deciding on a Phoenix AZ loan modification company.
- You can do this for free and do it yourself
- HUD offers foreclosure counseling for free
- Attorney Loan modification companies have a higher degree of accountability to the State Bar Association.
- Loan Modifications should not exceed $2,500
- Demand a forensic audit of your loan
- Ask for references of prior clients who have had success
- Be wary of guarantees as there is no assurance that the loan modification will be accepted at all or at what terms
Keep in mind that the government has established loan modification as a loss-mitigation program to help prevent foreclosure. Loan modification is a great tool to help those facing foreclosure stay in their home.
Loan modification is not something to be afraid of at all. In fact, for many, it is the best thing they have done financially since they bought their home. I had a client who just lowered their payment to a fixed rate of 3.75% and lowered the payment from $3,100 t o$2,000.
I just want you to be aware that there are some shady people out there who do not have your interests in mind before their own.
Contact your bank and/or your real estate professional to help you through a difficult , but manageable process.
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Copyright © James Wexler *Loan Modifications for Phoenix AZ real estate*
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Make sure you work with a Phoenix Realtor or Scottsdale Real Estate agent who is experienced with short sales and bank owned transactions.
Call 480.221.8080 to find out more about Phoenix AZ Short Sales and Scottsdale AZ short Sales
Words from a Very Outspoken and Opinionated California Litigation Attorney
Here in California, our Department of Real Estate website (dub dub dub dot dre dot gov) 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 search when you seek help in California. Other states probably have similar laws, so check with your own state DRE and state bar.
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! What’s that they say, “Fool me once, shame on you, but fool me twice, and I’ll sue your butt!”
Do your homework and THOROUGHLY investigate any firm before hiring them to save your biggest asset and the place you call “home.” Scammers are popping up like dandelions on a freshly mowed lawn in April. They advertise on the Internet, freeway billboards, radio, television, and print media everywhere, not to mention spamming your email box with those third-world widows needing someone to receive three million dollars for them. Make no mistake, in many cases, these “loan modification experts” 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… no coincidence there… attorneys make the laws), 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.
HERE’S THE BOTTOM LINE!
Hire an attorney – and not just any attorney either – one with experience in mortgage law, not just one with real estate law experience but one with experience in both FEDERAL and STATE litigation against mortgage companies, one who doesn’t also do family law, criminal law, admiralty law, and immigration law as well, one who limits the practice to mortgage law (or at least a great majority of it), one who has the experienced staff, training, and know how to take on the big lenders and their top notch lawyers (lenders have attorneys – and darn good ones – check out their counsel on the web – big names top schools, shouldn’t you have a lawyer too?).
We are not talking about a refund on your broken television here, we are talking about hundreds of thousands of dollars and your HOME – if you don’t think this is the time to hire a highly educated and experienced professional instead of a weekend schooled, almost out of work, broker slash loan officer slash “expensive water in a wine bottle with alleged magical curative powers” salesperson, I don’t know what would make you take things seriously.
Of course, this is one obnoxious lawyer’s totally biased opinion, but one based on many many distressing calls to my office every day. And, yes, my firm loves taking 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.
I’m pretty much with the lawyer. I represent a loan modification company with a lawyer base of several staff lawyers. One is assigned to each case. I believe having the right experienced lawyers involved makes a positive difference. I know from researching out many loan modification services that I have seen a price range from about $2000 to nearly $6000. I don’t know if I would completely agree that you should never pay over $2500, as that appears to be towards the low end of the range I saw. But I don’t see much need to be paying much over $3000. Cost is probably not the most important question people should ask, but how much can I save, as not all loan modifications are the same & getting the largest reductuion is the key. I know there are free services out there too, but the ones I’ve found seem small & were slow to respond to questions. When we consider how many millions of people need this service, it seems obvious that the little free services are not going to be able to handle the volume. I just don’t know how hard these free guys would be in fighting for a maximum payment reduction. I know the company I represent often re submits files that come back with reductions that are too small, in order to get a larger reduction & at no extra charge. After all, the banks don’t need people going back in default again a few months after a mod. That does no one any good.
The lack of regulation issue is important, and one people should consider. Yes lawyers have requirements that must go by, that’s good. A person might also consider if a company is a member in good standing with the Better Business Bureau. They require a level of ethics in how a company deals with clients & have a record on each member company. A member company with a good rating & no complaints might be a safer choice.
Nice. Very nice steps. Thanks for these 7 tips to follow when deciding on a Phoenix AZ loan modification company. People who are currently or are planning for a loan now have one of the best options.