Comments on: FTC to Ban Up-front Loan Modification Fees

By: steven ruza

steven ruza — Sun, 20 Feb 2011 14:12:23 +0000

the government should go after the banks

By: steven ruza

steven ruza — Sun, 20 Feb 2011 14:11:52 +0000

this is good news now enforce it

By: PatriotMarine

PatriotMarine — Tue, 25 Jan 2011 10:29:07 +0000

America needs to realize that anytime liberal, left-wing “progressive”, socialists like Carter and his administration puts forth into motion socialistIC-based programs (like FANNIE MAE and FREDDIE MAC), and FORCE Banks to lend to everyone with a heartbeat, BAD THINGS WILL HAPPEN !

What the public doesn’t know, is that EVERY SINGLE MORTGAGE-LENDING BANK provides a “financial” incentive to the loan officers or loan agents, in order to push or sell some of the banks “NEW & INNOVATIVE” mortgage programs. And they’re VERY ENTICING I might add. Loan Agents and Originators have at least 50% control of the interest rate recieved.

For example, let’s say the banks come in with an average interest rate of 4.25%, but since the bank is offering an additional pay-out amount to the agent or originator for an interest rate “adjustment”, the focus of the agent or originator changes from the client interests into his or her own in the form of commissions. Personally, I never believed in “pushing” any mortgage or refinancing loan on ANY of my clients to make some extra money.

By: Jon Lemos

Jon Lemos — Fri, 21 Jan 2011 23:58:57 +0000

I’ve been scammed by iModification Loan Services in Reno, NV. They seem to believe that they can take my money, not achieve a modification, and keep most of my money for allegedly providing a service for me. What a ripoff. I hope this new ruling puts them out of business.

By: Jaime

Jaime — Fri, 21 Jan 2011 21:39:16 +0000

Many good points! This is a foolish move. The legitimate companies that are active, now have to close down because the government can’t control the amount of con artists in the field. A good chunk of my clients have attempted to work with HOPE and these other “non-profits.” Well, nine months down the road, no one is contacting them and they’re stuck. I’m pretty sure I can find some information on-line to instruct me on how to remove my appendix, and I’m also pretty sure I can find a nice free hospital to help me, but I’d rather use my very expensive insurance to make sure I get the type of service I am comfortable with. And for all the people who aren’t going to pay upon completion? Who’s going to regulate that? Will the FTC protect the business owners? Hell no. The great idea is to close down massive amounts revenue generating companies when out economy is at it’s worst? That type of brilliant thinking put us in this hole. Bunch of idiots.

By: Henry

Henry — Thu, 06 May 2010 07:41:37 +0000

This might sound good to some but many homeowners need help with the process can’t do it themselves so they need to hire someone to help them and you can’t run a business hoping people will pay you when the service is done.

My friend started a loan modification company in IL and he didn’t charge upfront – 50% of the people wouldn’t pay him when the service was done because they didn’t have the money or just didn’t want to pay so he loses.

The industry should be regulated by requiring a license or something but not be put out of business because of bad apples.

Some people think that it should be a free service but I think when someone hasn’t been paying there mortgage payment for months then gets $500-$700 shaved off the payment they should have to pay.

This whole idea of the “poor homeowner” needs to stop – if I have a a stroke and get taken to the emergency room my bill is going to be 50k – are they taking advantage of poor sick me? No, they are there to help but expect to get paid well for helping me when I needed it most.

By: Rob Smith

Rob Smith — Mon, 15 Mar 2010 00:48:34 +0000

Look, just regulate this business. That is all that needs to be done. Let the consumer decide how much they will pay to set the market price. The public is now seeing how banks are lying about “losing documents”, etc.
Freddie Mac contracts with their own loan modification company called Titanium Solutions based in Utah. This company contacts real estate agents to sit down with a deliquent homeowner and discuss whether a loan modification or a short sale is the best option. The real estate agent can only make commission if a short sale is completed and they automatically have the listing. If Freddie Mac is setting this up are we do believe that the banks really care about completing loan modifications? it is all political fluff.

By: Dennis

Dennis — Sat, 20 Feb 2010 04:18:25 +0000

I agree there needs to be regulation in this industry. There are way too many scam artists out there preying on the distressed homeowner. However, there are many companies doing good work. Know what the lender requirements are to get the mod, and work in the best interest of the client. Banks say they will work with a client directly. We all know that this never happens, and when it does it is in the lender’s best interest. This total ban is a lazy approach on behalf of the government. There should be regulations in place, but a complete ban on fees will wipe out everyone. A company can not be expected to carry all costs for months – overhead, labor, time, etc. only to have a “chance” of getting paid at the end. These homeowners have not been paying their mortgage for months, and sometimes years. Once a company gets a client the modification, the client will then be expected to pay the mortgage payments. This, in most cases will leave no money for the firm to collect once they completed all services. Yes, regulations need to be in place. Solutions, answers, guidelines. Not a “blanket” ban on fees. For example, payments to a 3rd party, unaffiliated escrow agent to be held until the service is complete. At least this would ensure the firm will have the money there once they do complete service. With this ban, it leaves no protections whatsoever for the legit firm. The escrow is just one example of a solution. There should also be regulations in the industry so the client can be assured they are dealing with a company with expertise in this area, and follows all guidelines. The scam artists will still continue to scam homeowners as many states currently have the no “upfront” fee ban. More needs to be done on the part of government in this area. Although this may appear good from an outsider looking in, it is completely anti-business and anti-American. We operate a firm and by all counts have completed more modifications than any government or non-profit agency we have seen documented results for. However, without collecting a small fee to cover our costs only, we would be out of business. I believe if these regulations were in place and government knew who was in the business and what they were doing, then a small fee such as $200 to $300 is more than reasonable to ask of a homeowner when the firm is expected to wait several months for the rest of the money. More needs to be done. This is not the answer, and this is not in the best interest of the homeowner, lender or legitimate firm doing the services……

By: Stephen Adams

Stephen Adams — Fri, 12 Feb 2010 20:26:41 +0000

As an attorney in Florida this is good news. When will the new law take effect?

By: Michelle Iverson

Michelle Iverson — Fri, 12 Feb 2010 16:18:50 +0000

I was glad to hear about this. I work with the program presently and we do modifications for borrowers with no fees to them. It is very disturbing to know that some of our borrowers are paying other companies to do what we can do for them if only they would contact us. This ruling would be a good thing – borrowers are already in trouble and for companies to prey on that fact is disgusting.