Is it necessary to have a lawyer to complete a loan modification?

User question: I was contacted by a law firm offering to help me keep my home. They mentioned the HAMP program and it's one of the programs in which I'd need a lawyer to file. Then they said it would cost me almost $4,000 for this assistance. This seems like a lot of money for something I have read I can do myself. So I called them back and declined their offer and the representative literally laughed and said good luck doing it on your own. So would a lawyer help in this situation or was this a scam? If a lawyer is the way to go, can you point me in the direction of a local one that I could use?

Answer from blueroof.com: There is no requirement to have a lawyer to do a modification of your mortgage. Especially one that charges $4,000.

It is difficult to get a modification done, both on your own or having some do it for you.

A very small percentage of modification requests actually receive a PERMANENT modification.

It is probably more difficult to get one on your own because you need to call the bank at least twice a week and stay on top of them to make sure things are moving forward. Otherwise things just get stagnant.

This can be time consuming and most individuals are unable to dedicate the necessary time to getting things done. That is why a full-time professional can be of value.

If you choose to hire a professional, here are the things we recommend you look for & for you to do:

1. Shop around. Make sure you talk to at least 5 different companies or attorneys to see who you feel most confident in.

2. Negotiate. Many companies need business and may be negotiable on their fees. It never hurts to try and negotiate.

3. Make sure that at least a portion of the company's fee is based on performance. If a company requires the full fee to be paid up-front, they have less motivation to deliver great results. You may need to pay a portion of the fee up-front but make sure a good portion of it is only paid when they deliver results.

4. Clearly define results. Make sure they know what you believe is an acceptable modification and that they don't get paid the last part of their fee unless they meet your minimum acceptable modification.

5. Stay on top of things. Be sure to stay in touch with the company and get regular updates. Be sure to be patient and positive when talking with them. In that line of work you will feel better about the whole situation when you don't get upset every time you call. Also, be sure to keep your contact with them short. They spend all day on the phone with banks and the longer they are on the phone with you, the less time they have to be on the phone with the bank.

6. Explore all alternatives that are available to you. Since only a very small percentage of modification requests become permanent (many only get trial modifications), many end up doing either a short sale or other alternative. You should always keep this in mind and research the other alternatives available to you to determine which will be the best path for you.

We wish you luck in getting through this hard time. Just remember, you have a number of options available to you and there are competent people available to help you through this. If you have any other questions, we are happy to help.

*Nothing here is considered to be legal or tax advice. Any and all questions regarding tax or legal issues need to be directed to an appropriate and licensed professional.

Joe Duffin
Managing Broker for Blue Roof Realty