The Los Angeles City Council has made it illegal for mortgage and real estate brokers to charge an upfront fee when offering to help distressed homeowners obtain loan modifications. So why is this important? Because it basically puts these companies out of business.
Once a mortgage is modified, how would a loan modification company expect to get paid? There is no escrow company and generally the people are not bringing money to the table. The lender is certainly not going to become the collection agent for the modification company. Oh yeah, they could sue them in court or threaten to put a collection account on their credit which would harm their credit score.
That's too funny. You thing these people would care if their credit get trashed?
While there are scam operation out there, unfortunately the LA City Council has painted a broad brush that included legitimate operations. In the LA times it said: “Some of the services are legitimate, officials said, but others are not.” So we just make them all illegal. That makes sense!!
The real looser here will be the residents of the City who will no longer have access to firms that may be able to help them. While they can still try and work with the Government HOPE hotline at 888-995-HOPE. Last I heard they were getting somewhere around 13,500 calls per day. I'm sure they won't mind sitting on HOLD. Once they reach someone do they actually think they will be able and motivated to work on THEIR case.
The city would be better off trying to regulate or better yet, enforce the current laws than alienate an industry. Unfortunately if your don't pay your mortgage, you may have to pay someone to help you solve the problem you caused.
Once a mortgage is modified, how would a loan modification company expect to get paid? There is no escrow company and generally the people are not bringing money to the table. The lender is certainly not going to become the collection agent for the modification company. Oh yeah, they could sue them in court or threaten to put a collection account on their credit which would harm their credit score.
That's too funny. You thing these people would care if their credit get trashed?
While there are scam operation out there, unfortunately the LA City Council has painted a broad brush that included legitimate operations. In the LA times it said: “Some of the services are legitimate, officials said, but others are not.” So we just make them all illegal. That makes sense!!
The real looser here will be the residents of the City who will no longer have access to firms that may be able to help them. While they can still try and work with the Government HOPE hotline at 888-995-HOPE. Last I heard they were getting somewhere around 13,500 calls per day. I'm sure they won't mind sitting on HOLD. Once they reach someone do they actually think they will be able and motivated to work on THEIR case.
The city would be better off trying to regulate or better yet, enforce the current laws than alienate an industry. Unfortunately if your don't pay your mortgage, you may have to pay someone to help you solve the problem you caused.
So here the part where I tell you about myself. Nothing too exciting. I have been in various aspects of the Mortgage industry for the past 20 years.
From running offices, multiple offices, regions, overseeing Underwriting and productions from both Banker and Broker sides. I have seen many cycles and
expect to see more.
Interesting!
The loan modification process can be frustrating and confusing for many distressed homeowners. But you have to know what exactly is loan modification. A loan modification is a permanent change in one or more terms of a borrower's home loan.
Unfortunatly, there are a lot of "Trial Modifications" going on. My guess is that 50% of those will fail for various reason.
Even when the modification makes total sense there are too many cooks in the kitchen to effectively make it work. With loan securitization the service has less control and sometimes it is just easier to foreclose than work a modification