Loan Modification Companies - How do they work? Has anyone used them?

i post on other forums, but just noticed this one. here is my take on loan modification companies - beware!!! they are scams. anyone who takes your money upfront and insists on that as a stipulation to do business for you, is a ripoff.
there are non-profit agencies all over this country that will step in for you and work with you (urban league, for example) to obtain a modification or some remediation with your lender. you can check and find out who these agencies are by checking the hud.gov website. hud is, of course, Housing & Urban Development. this is a governmental agency, so decidedly an agency with which you can have a comfort level in your dealings and know that you can be confident they'll work on your behalf.
please, please do not spend your money so that others can get rich over your discomfort.

oops...my diatribe is below my apology; oh well...please be careful people!

I am a loan modification processer.and work all day with people who say"I tried to do my own loan mod now i have a sale date" you CAN do your own loan mod but if you give them the wrong info or to much info you could put your foreclosure in over drive. or if you dont get the papper work to them in time. i do this all day long for any where from 900.00 to1200.00 depending on the circumstances. NO upfront fees i get your mod approved before you have to pay me..There are a ton of crooks out there.NOT ALL OF US ARE!!
not every one has the time to do their own loan mod if you are faceing a hardship in your life more often than not that very hardship will also keep you from being on the phone 3 to 5 times a week for 30 or more mins. at a time each..and further more how do you know that the deal that they are offering is the best they will do??..whats your basis to judge that..??????? if you can doit your self more power and good luck to ya..if you want some solid help you can e-mail or call me....(904)214-6027.... jgordon@relnservices.com

I tried the free gov't agency approach and they had a 90 day (plus) waiting list - I would lose my house by then. I then called one of the scam 3rd party loan mod companies and they wanted $1,200 UP FRONT and another $1,200 when they finished - if they finished. I decided to use a do-it-yourself mod company that gives UNLIMITED support! Every question I have - I send them an email and they respond within 24 hours! I highly recommed them - lossmitconsulting.com - they charge a fraction of the price of 3rd party mod companies. Yes I have to do the work myself, but if i could afford to pay $2,400 i wouldnt be in this situation! i am almost done with my mod and these guys have been great!

How do you guys expect to get paid by charging people who aren't making their house payment or credit card payments (often) if you don't charge upfront? You can't hold up the loan mod -- often the servicer will send the modification agreement to the borrower directly. You have no security, less than a credit card. You'll have to then become a debt collector as well. I could literally sign 80 percent of qualified candidates if I offered a 'pay after' option, and 95% if I told them they could keep making payments (our contract actually says we can't legally advise them of that, which I think is legal chickenshit). If the borrower is making payments while in negotiation, he is harming his chances and unless the loss mit agent is retarded, he will smell that a mile away. You can't claim hardship and claim you can't make those original payments and then actually continue to make them, unless you have a helluva excuse.

Anyway, what type of clients do you look for? What results are you seeing? Any loan modification examples? I wouldn't mind checking out what some other companies are getting their clients, especially since we seem to charge so much more than everyone. I hope our results are at least justify those prices. From what I'm seeing, saving someone 100K to 300K over 30 years is damn cheap if it only costs $5995! Where else can you pay that little and get that much back? And with a downside of only $1295 (I think failure to mod is a bigger downside though). I can't verify but I'm told we're well past a success rate of 90%, though that really only means modifications offered. That does not guarantee that the borrower will like or accept the mod, though we haven't had one declined yet. I'll find out more as I get more into it. I've only been selling these mods for a short while, though I've done some modifications (short pays) while doing reverse mortgages, and I can tell it will be so much easier to get these modifications done than the ones I managed to get done before (homes with equity and borrowers that would not pay late) are a difficult mix when asking a lender to reduce principal and convince him that your borrower is struggling.

How do most of you market and what's your typical customer like? We send letters and get referrals. I will only take a customer who is upside down by at least 50K, typically they're at least 100K to 150K. I prefer that they have 2 mortgages, hopefully ARMs with high margins, or a second at least 9%. Payments up at least around $3000 a month, and preferably a month late already. I want them to know and admit that if they don't do something, they will lose the home. That have to have accepted that and are fired up and ready to get started. The people who will be in trouble in six months or so are usually not there yet. They're still in denial or some other stage of grief about their situation. Once they accept reality and are ready to do something about it, that's when I want to meet with them. And if they have a high interest AMR and a big second, they will probably love their mod. People who have a super low adjustable home equity at 3.5% variable and a 6.25% fixed 1st will often not be impressed when you tell them you'll probably be able to get them in a 4% fixed that will make their payments roughly the same, even though that variable is a ticking time bomb that will probably destroy them within 2 years as it inevitably goes up.

So most of you guys accept payment after you've modded the loan? What about overhead? Processing? The damn lawyers that just sign the package and bill us for a 1/2 hour? Marketing costs?

I dont know how some of these loan mod co's.sleep at night...5995.00 for a loan mod..DAM!!..no wonder my phone is ringing off the hook..most of the people I help could get there loan cought up with that kinda money..come on people..it is companys like that that will have the goverment steping in soon and shuting us all down or putting stipulations on this industry that make it nearly imposible to operate or make a profit.!!!I am all for making a living..but that is just robbery.these people are already in a certain hard ship why salt a wound to make a huge profit.

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Jgordon, what operating costs are you seeing? Marketing, processing, etc.? And can I see some loan modifications you've modded? What's it worth to save $300K? Success rate? Costs?