Any home owners in financial distress should know that there is a good possibility that their mortgage lender may be willing to modify their home loan to make their loan payments more affordable. An effort to reduce your mortgage interest rate and/or payments should be the first line of defense against losing your home in foreclosure. If no reasonable reduction of the mortgage payment is going to help, contact an experienced San Diego Realtor to help you list your home for sale as a “short-sale.” Short sales have less of a long-term impact upon the seller’s credit rating, and may allow you to buy another home sooner than later, personal finances permitting. Walking away from your home in foreclosure should be the last resort.
Regarding loan modifications, it is important to remember that anyone can contact their mortgage holder directly. It is not necessary, and in fact generally unadvisable, for a home owner to pay a fee to a third-party loan modification “expert” or “foreclosure prevention specialist” to contact the mortgage lender on their behalf. Instead, just pick up the phone and call the number listed on your mortgage bill. The company that services the mortgage will then refer you to the “loss mitigation department” of the bank that holds your mortgage. Almost all banks have comprehensive loan modification programs in place to help troubled borrowers. In this author’s experience, most banks are more than happy to cooperate and try to help you stay in your home.
This week the California Reinvestment Coalition (CRC), a non-profit group representing 275 public and non-profit agencies, issued a report stating that most for-profit “loan modification specialists” are only taking advantage of distressed home owners. These “specialists” charge high fees under the pretense of helping home owners stay in their homes. But the CRS found that these same companies typically provide little or no service. The “mortgage prevention” business is typically a scam, and many of these companies are being charged with fraud by state and federal law enforcement agencies.
Regarding short sales, there is a similar problem with many real estate agents who market themselves as “foreclosure consultants.” First, note that it is illegal for any licensed California real estate agent to collect fees in advance of selling a home if a Notice of Default has been filed against the property. Special permission must be granted to real estate licensees from the California Department of Real Estate (DRE) in order for any California real estate agent/”foreclosure consultant” to charge advance fees for their services in these situations. Very few of these permissions have been sought or granted. And second, even if permission has been granted by the DRE, there’s a good chance that the services performed by these agents are no different than the services provided by any qualified San Diego Realtor who is knowledgeable about short sales. So if you are in financial distress, don’t waste any more money on shady services.
As top San Diego Realtors, our job is to assist all home owners who come to us for help with selling a home in San Diego County. Our listing agreements provide that fees are paid only if we are successful in selling the property at terms that are acceptable to our client. In short-sale situations, real estate fees are paid by the bank when the bank approves the short sale. There is no advance fee, and no payment at all from the home seller at any point during or after the completion of a short sale. In our view, it isn’t right to charge fees to home owners who are in distress and seeking to avoid disclosure. Our reputation as San Diego short sale agents and foreclosure prevention consultants comes from providing competent service, dealing professionally with the banks, and achieving results for our clients.