Do it yourself loan modification is possible. If you know what to do. Not many people do and that's a major reason why so many loan mods fail.
If you are reading this article, it's pretty much a foregone conclusion that you are in trouble on your mortgage. Are you late on your mortgage or have you missed payments inherently. This makes a difference. How do you plan to explain this? Do you have a valid reason?
These are the kind of things you are going to have to explain to the bank if you expect to get your loan modified. If I was asking you to loan me some money, what would you want to hear before you save me the loan?
The answer is particularly tricky. You have to show a good reason for not being able to make the payment you told them you could make when you took out the loan. If you do not have a good reason, they will expect you to make the payments as agreed. The fact that the house is worth more than you paid for it or owe on it has no bearing in this conversation. The bank did not guarantee your investment, they lent you money based on your agreement to pay them back.
So let's assume you have a good reason. You lost your job, you got your hours cut, maybe your spouse lost her job. OK, how are you going to make the modified payment? You see the problem?
There are ways to handle this question. If you do not know the answer, I would recommend you find out before you meet with the bank and ask for a loan modification.
So how do you get help? There are two ways that I know of. You can hire someone to represent you or you can take a course that teachers you the process. Each one has it's advantages and disadvantages.
You need to keep in mind is the bank is not on your side. They are losing money on you. The bank's objective is to limit their losses as much as possible. Most people are nervous when they meet with the bank. Most of this nervousness comes from not knowing what the bank needs to approve your modification. This would be a strong advantage of hiring someone to represent you.
The disadvantage is that no one is going to help you for free. It's comparable to hiring a lawyer. Since only about 33% of the loans actually get modified, the advisor can not afford to put in a lot of time if he is not sure he'll get paid. Representing people in their loan modification is his job. He has to make enough to make a living. Like I mentioned before, it's like hiring a lawyer. Lawyer's can not guarantee the income and neither can loan modification specialists.
So your other choice is to take a course that teaches you the steps. Knowledge is power. When you have the knowledge of what to say and what to expect, you lose your nervousness. You start negotiating from a position of strength.
A position of strength? Did not I tell you the bank does not want to lose money? That works in both directions. What happens to them if the home goes to foreclosure? Well, for one, the money they already lent you goes into the non-performing loan category. They are losing money every day they are not receiving a payment. From the time you quit making payments until they can foreclose is about 6 months. In many states, the original owner (you) has up to a year to bring the payments current and reclaim the home. This means the bank can not really sell the home until the redemption period has expired. That means a total of 18 to 24 months of no money coming in. They do not want that.
The advantage of a home study course is you are in control. You are probably a lot more likely to keep up with the followup on how your loan modification is progressing than a hired modification specialist. It's also a whole lot cheaper. Modification specialists will cost a minimum of $ 1000 and possibly much more. If they save your home for you, it's worth it.