LOAN MODIFICATION AGREEMENTFor the past few years I have helped thousands of people by teaching them to help themselves through my blogs, forums and emails. I really enjoy assisting my fellow Americans in a time of need and have found a great new career working from home.

Since becoming a full time consumer advocate and blogger in 2007,  I have found that one of the best teaching tools is to answer the questions I receive on my blog for the world to see and learn.

This morning I received this email and I though this exchange could help a few people out there that may have the same question.

from C*
dateSat, Jun 20, 2009 at 8:22 AM

subject: Your thoughtful Insight Needed

Greetings Moe,

I have read many of your different blogs on various websites.  Your passion for helping others is well documented.  If you don’t mind, I have almost completed my loan mod with American Home Mortgage.  I’m pleased with their first offer, but should I asked for more.  For example, could they wave the $500 Modification Fee?

I have listed below the details of my modification (my previous APR was 6.625%):

1st year APR 3.5%
2nd year APR 4.0%
3rd year APR 5.0%
4th year and beyond (25 yrs) APR 5.5%

Also, I have 2 months mortgages payments rolled up into the loan.

Our insight is greatly appreciated.


To: C*

dateMon, Jun 22, 2009 at 6:51 AM
subject Re: Your thoughtful Insight Needed

My answer:

Hello Cordie and thanks for the email!

This looks like a great offer. If you can afford this modification long term, then I advise you might want to accept it. As far as the $500 modification fee, many mortgage servicers do have these fees added in to handle their costs associated with processing your loan modification.

What upsets me is the fact that they get an additional $1500 from the US government and they still have their hands our for more money from homeowners. But I am not surprised to say the least.

By all means, you can counter this offer and do not have to take it. I have seen some people get better offers by doing this. I have also witnessed homeowners who countered the offer on the table, as the current offer expired, only to never receive another loan modification. Sadly, they ended up losing their homes.

If you counter or deny this offer, you run the risk of losing it and maybe all offers in the future. But do not take an unaffordable loan modification because you feel pressured to accept it. If you can’t afford it, then fight for better!

Loan modifications are what the industry calls a privilege and are not mandatory. You being an American, you have the right to choose what is best for you and your life.

With that being said, lets end this with an old country song by the great singer Kenny Rogers, “You gotta know when to hold em, know when to fold em, know when to walk away, know when to run!”

I wish you the best in all you do and choose!



Best Regards,

Moe Bedard