Surely by now everyone has heard of the latest government programs addressing the sub-prime mortgage crisis; they may even realize that there are loan modification companies out there to aid in restructuring the terms of their mortgage. What most consumers do not know is exactly how the process works and what to expect during the process.
Remember that the mortgage servicer is not on the side of the homeowner. They are merely concerned with their own bottom line and have no incentive to patiently walk the average consumer through the process.
Don't Believe Everything Reported by the Media.
Should you believe the positive spin being put on efforts to help the current economic situation by the government, as well as the media? If you listen to the nightly news, you may find yourself fully convinced that you can deal with your mortgage servicer yourself and quickly and easily restructure your loan so that you are safe from threat of foreclosure.
Unfortunately, what they do not tell you is that it is rarely as easy as this. A mortgage document contains a lot of legalese and repayment terms the average homeowner may not fully understand. It is extremely difficult to discuss the restructure of a home loan without knowing the legal ramifications; often the home will end up back in foreclosure anyway.
Homework and Research Are the Keys
Any homeowner who is considering going through the process of restructuring their loan is well advised to first do their homework. Know your options, as well as the current state of affairs regarding your mortgage. If you are currently delinquent in your loan payments, start by determining if this has resulted in extra and undue fees being added to the amount due. Usually these fees, which can range in the tens of thousands of dollars, will be added without your knowledge. You must know exactly what you are dealing with in order to turn around the situation.
The next thing you must research is the exact wording of your mortgage document and the black-and-white terms. There are some mortgage servicers who will attempt to stretch the definition of terms and take advantage of homeowners who do not understand the legal jargon. As well, the loan itself is probably not held by the financial institution you originally dealt with; it has probably been sold time and time again - an important consideration.
Do It Yourselfers Face Risks
If you are considering going through the process of the mortgage modification process without benefit of legal counsel, be aware of some of the drawbacks.
Number one is that many times the mortgage servicer will add a release of liability clause to the new terms. This means that the homeowner is signing away the right to ever take legal action against the loan company, no matter the circumstances.
The fact is that most homeowners who restructure their mortgage without benefit of professional counsel will end up facing foreclosure again within six months of the new loan. Remember that the financial institution only cares about getting their money and will not do what is in your best interests.
Using loan modification companies as your advocate to prevent foreclosure is highly recommended. These firms have the knowledge and resources to investigate what company truly holds the mortgage and how to best deal with them and respond appropriately to the legal ramifications. If you are facing foreclosure, this is no time to try to do it yourself and risk losing even more.

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Article Submitted By: BradleyMarmer
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