Mortgage Foreclosure & Refinance Resource

This was a recent Question asked to MarketWatch: What do you think of hiring a law firm to negotiate a loan modification? They charge $3,995 and say they have a 95% success rate. Do you think this is better than trying to do it on your own since so many people have so much trouble?

The Answer: I do not know anything about the law firm you mentioned. Four grand is a lot of dough, especially for something you should be able to do for yourself. But if you don’t think you are capable, it may be money well spent.

Yes, folks are having a difficult time dealing with their lenders, who are overwhelmed by the sheer number of delinquencies and foreclosures. But a lot depends on your window, meaning how long you have before you find yourself in real danger of losing your home. If you have plenty of time, then you can fight your own battle. If not, you may need all the help you can get.
The good thing about these kinds of specialists is that they know who to speak with and they know how far lenders will bend. They also know the right buttons to push to get lenders off dead center, and I’ve been told that lenders actually prefer to speak with them as opposed to dealing directly with irrational, hysterical homeowners.

Another avenue you might wish to pursue is seeking the aid of a nonprofit counseling agency, one that specializes in housing issues. Their success rate is very good, too, and they don’t cost nearly as much as a private law firm.

If you decide to hire someone, please check them out, and check out their claims. See if any complaints have been lodged against them with you local Better Business Bureau or consumer affairs agency, or perhaps even the local bar association. Also, ask for a list of their last five or six clients and call several of them to find out about their experiences.

Finally, with respect to the claimed 95% success rate, I’d want to know why the other 5% failed. Was it something they did? If so, you want to know about it so you don’t repeat the same mistakes.