Choosing a professional: Should I pay for assistance?

The housing crisis and ensuing recession have created an unprecedented demand for assistance as homeowners across the economic spectrum struggle to maintain their mortgage payments.  Federal and State agencies have mobilized a massive effort to provide additional funding and resources in an attempt to backstop approved counseling agencies as they strain to accommodate requests for assistance.

These non-profit agencies provide free counseling for at risk homeowners.  You can find a list of HUD approved housing counselors here .    These counseling services typically include an opportunity to meet with a staff member who provides assistance in determining eligibility for loan workout programs, and helps the homeowner complete the lender specific forms needed to request assistance.  They may even make an initial contact with the homeowner’s servicer.  These free services are a valuable resource.  However, the inconvenient truth that these agencies won’t tell you is that they simply do not have the resources to see these loan workout requests through.  After your counseling session, you are generally on your own to navigate through the process. 

As I have previously opined the big banks would prefer this crisis just “went away” and are not taking steps to truly accommodate at risk homeowners.  In fact, it is our experience that the loss mitigation departments at most major serving companies have a propensity to lose faxes, change guidelines and generally (and possibly intentionally) delay, deny and derail a request for assistance!  If you have already attempted to get assistance, this assertion should come as no surprise.  The actual process of getting an optimized loan workout in place requires a sustained effort on behalf of the homeowner or their designated advocate.  While they are loathe to admit it, banks would prefer to work with uninformed, emotional homeowners directly, not because they are eager to help, but rather, because homeowners are naive and intimidated by the process and are easily manipulated.   

Professional representation can play an important role in getting the appropriate loan workout solution in place.  Unlike HUD approved counseling agencies, these for profit service providers do charge a fee.  Reputable firms should be able to provide specific examples of loan workout requests they have helped to facilitate and should have extensive experience in mortgage lending, consumer debt counseling or real estate law.  The best of these firms will exhibit superior knowledge and will offer full time representation of your interests.  The costs of these services varies and it is important for a homeowner seeking professional advocacy services to “do their homework” before choosing who to work with. 

Here in Michigan, firms must comply with the Credit Services Protection Act.  You can read the full text of the Act here .  A reputable firm will not charge for their services before the actual service is performed.  Furthermore, a reputable advocate will not discourage you from participating in the process, but rather work collaboratively with you to find the appropriate workout for your circumstances.  A true advocate should be a champion for your interests as a homeowner. 

Michigan Mortgage Modification LLC is Michigan’s premier advocate for homeowners.  You can access FREE resource including an extensive database of Frequently Asked Questions, video tutorials and excerpts of the acclaimed digital workbook “The DIY Loan Modification Kit” at www.michiganmortgagemodification.com.