Everyday, we hear about people who may have to leave their home because they are on the verge of foreclosure. We urge you to avoid foreclosure!. Don’t freeze up and do nothing. The problem will only get worst. You have several options. One of them is loan modification.
Loan modification is different from refinancing. If you were not able to refinance, loan modification may be the solution for you to keep you in your house. In a loan modification, the equity of your home is irrelevant. Your credit does not have to be perfect, however, you should continue making your mortgage payments. You do not have to miss payments in order to qualify for loan mod. There is no appraisal nor escrow required to complete the process. It is a simple process if handled by a knowlegeable professional. In California, a real estate license is required to do a loan modification.
If you are behind in your mortgage payments, you may be contacted by companies or individuals who will offer to help you work out a loan modification. Be very careful if you are asked to pay for any of the services in advance.
The Department of Real Estate has issued the following guidelines.
1. If a Notice of Default has been filed on your home, do not pay an advanced fee to a real estate licensee or entity. However, California licensed lawyers are exempt from this prohibition.
2. “If a Notice of Default has not been recorded against your property, it may be permissible for a real estate broker to assist you in working out a loan modification or otherwise negotiate a possible resolution to your problem with your lender or loan servicer and ask you for payment in advance for their services. However, the broker must have you sign an agreement that tells you what services will be performed, when they will be performed and how much you must pay. The broker cannot have you sign an agreement until it has been submitted to the Department of Real Estate for review and the broker has received permission to use it and collect the advance fee.”
3. Licensed Real Estate brokers are not required to receive Department of Real Estate permission as long as no upfront fees are collected and have completed their services before you pay them.
With these new guidelines, consumers now have more protection and avoid getting scammed by so called “foreclosure consultants”. I have spoken to several homeowners who had paid exhorbitant fees to individuals who offered their services and were never able to get their loan modified and ended up getting their home foreclosed on.
Armed with this information, we hope that you will succeed in keeping your home.
Elizabeth M. Eugenio,
Certified Distress Property Expert (CDPE), Certified Residential Specialist (CRS), Graduate Realtore Institute (GRI)
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