• Guaranteed Modification

    Posted on June 26th, 2009 James 1 comment

    A lot of people tell me about companies that offer a guarantee for modification services and my reply  is: “who do you know that has called them on it?” There is usually dead silence because how good is a guarantee? It is only as good as a company is prepared to honor it so examine all the small print. There are not many companies that can afford to expend resources on a modification win or lose and not get compensated.

    From the law office standpoint I liken it to the same set of circumstances as if I was to represent a person in court, I cannot guarantee the outcome and to do so is unethical because you, the client might not give me all the facts or can withhold information about trying to do it on your own previously and then we try and encounter huge obstacles. I’ve had clients that did their own submissions and failed (because they gave too much or wrong information) and they don’t tell us and then we meet with resistance. Now we’ve been able to get them through but because this happens there is no way to guarantee the outcome and we expend thousands of dollars of time and effort in each case so we just cannot offer a refund. Our guarantee is best efforts and if your situation is modifiable you’ll get modified and we don’t even need to go there about rejection and if that happens, maybe it is exactly what needs to happen because not only does the person not qualify for the home now, they won’t be able to afford it with any program so they should think short sale and move on. Many properties will not make sense and most banks do not offer a principal reduction because they cannot get permission from their investors to eat that much of their expected profits. The old adage of when does a negative -30 + 43 = 0 and that is any time the market goes down 30% it has to get back to 43% just to put you back where you were before it dropped.  I see many instances where the properties are down 50% and the borrower might now recover the home value in their life time and getting out with a short sale really makes financial sense.

    On the fees, if you’re using a law firm and they are going to give it to you for a fixed fee, grab that and run if it is around $3,000 to $4,000. When I was at a law firm we had software that started to calculate our hourly from the time the phone was picked up until we hung it up and we were taught to keep the client on the phone and run it up. Every fax that went out was $1.00 per page and every photo-copy was .30 cents per page.  The hourly of an experienced real estate or finance attorney is going to be $375.00 per hour or more and they may have processors or paralegals that are going to be $100 to $150 per hour. When you average 40 to 100 hours per file you are going to get your money’s worth because it takes hour upon hour and constant follow-up with the banks…more than most people who work will every have. I can’t see a modification starting out less than $5,500 under typical law firm billing and the client could expect to get a back-end invoice for about the same because of the time and expenses for faxing, photo-copying and FedEx that takes place. Therefore, a completed modification would normally be upwards of $10,000 by the time it is done. Grab a modification for a fixed $3,000 to $4,000 because it is a super deal.

    You can always go to a non-lawyer but you are really putting yourself in a position to have your documents used against you since a broker or any other helper cannot afford you the attorney/client privilege. You need to make sure your submission is not used as a smoking gun against you especially if you were a stated income loan and you and your broker or loan officer expanded your income for the purpose of qualifying on the loan.

    If you want solid assistance at a fixed legal fee price, please contact my office.


    James Burns, Esq.


    One response to “Guaranteed Modification”

    1. hmmm. Interesting advice. lol

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