I get asked all of the time from people looking to modify their loan…”How do you know if the company you are talking to regarding modifying your loan is legitimate?”

There are a few signs to look for when researching a loan modification company. First, are they asking you questions about your current financial situation? Do they ask if you are current on your mortgage, do you have a job, and why did you fall behind? If they don’t ask these questions, then that is a problem. As a customer you might say you are glad they don’t get too personal, but from the company’s stand point, they do not know if they can help you until they understand your current situation.

If you talk to a company, feel comfortable with their services and tell that loan modification company that you want to work with them, that is fine. However, if they proceed to tell you the charge will be anywhere from $1500 to $3500 and you will have to pay up front, then I would walk away if I were you. This is because the company does not know if they can help you until you send them your financial paperwork and they have to negotiate on your behalf with the bank. Until the bank approves your loan modification, you should not pay anyone a dime. If it is approved, then the company can collect a fee for their services.

I know these times are stressful and sometimes in moments of weakness we let our guard down. If somebody says exactly what we want to hear, we don’t care how much it costs. What you must do is take a step back and let them know that you want to think about it before you pay them any money. If you consider your options and wake up in the morning still feeling good about your decision, then move forward. There are companies and services out there that can help homeowners achieve a loan modification. I cannot emphasize enough how important it is to do your due diligence.