Banks Speeding Up Loan Mods - Your Benefit or Not?

In a recent article posted on Wall Street Journal's Market Watch they report on how some companies are now accepting online orders for loan modifcation agreements.
Well, some of us would consider that a good thing right? I mean after all, it's time the banks got on board with an automated method of processing loan modifications. But I wonder if that's actually a benefit to the borrower or the bank?

In the article it says that by requesting loan modifications online, lenders can now instantly create changes to their loan document packages if workouts are necessary. These modified agreements, which have been available since the end of 2007, also enable lenders to remain in compliance with changing lending legislation and requirements.

Progress is generally a good thing. But something to ask yourself is if the banks are able to make quick decisions online regarding the modification of your loan what is it they truly have to gain by moving so fast?

Well, the first thing that comes to mind is the insurance industry. When someone is in an accident it seems an insurance adjuster is not only available and making offers 24 hours a day but they will show up on your door step or in your hospital room with a check. Why? They know if they can get you to settle right away their losses and your entitlement is severely diminished.

Right now in a time when more and more people are considering the alternatives to foreclosure, Loan Modifications rise to the top for those who want to keep their home. So just like the individual who rushes to accept the quick offer from the eager to settle insurance company, they later realize they should have played a little more hard ball.

According to Congress it is estimated that 80% of the people who engage in a modification directly with the lender end up failing to keep up with the terms they were given. I think the reason for this is simple.

If YOU contact the bank directly, they know that you don't likely know what options are available to you and why you may be entitled to those different options. Also, the bank is looking out for THEIR best interest not yours. Therefore the less they're able to give away, the more they mitgate their loss. Sound like the insurance companies? Perhaps the concept is similar.

So what do you do? Simply put, you need to find someone who knows what the options are and let them negotiate on your behalf. Much like you see commercials urging you to call the attorney hotline when you've been in an accident, I have interviewed many attorneys who handle negotiations on behalf of my clients. Unlike the hotline where you end up with a random attorney, these attorneys have been personally scrutinized by me. They have reduced interest rates, reduced principal balances, eliminated 2nd mortgages and more importantly they actually have a heart for helping people. Of course each situation is unique and every resolution is different. If you'd like additional tips on getting the right loan modification, feel free to call.
Anthony
800-765-3150 x111