Recently, a number of servicers/lenders* have been offering mortgage workout solutions to their clients directly. This sounds good, right? WRONG!!! Let’s see why.

First, servicers will be paid $1,000 for each loan workout and will get an additional $1,000 payout each year for as many as three years – as long as the borrower continues to make payments.

Second, servicers will produce mortgage workout terms that are most favorable to their lenders in order to increase acceptance. If the lender and servicer are the same company, they certainly want you to make the maximum monthly payment that you can possibly afford.

Unless you are an experienced negotiator with an in-depth knowledge of mortgage delinquency issues, it’s unlikely that you will be able to get favorable terms for your loan by working directly with lenders.

We know of a client who received a modification offer from one of the major lenders that saved just 40 cents on their monthly mortgage payment.

*A Loan Servicer is the entity that provides services for your mortgage such as collecting monthly payments and escrow accounts. The Lender is the entity that lent you the money to buy your home. Lenders and Servicers can be two separate entities or the same entity.

The 9.9 billion dollar loan modification plan