If you find yourself in a situation where your mortgage is unaffordable, you basically have the following options:
  1. Try to get your current lender to modify your loan
  2. Try to qualify for the FHA Hope for Homeowners Program
  3. Try to qualify for the FHA Secure Program
  4. Try to do an FHA Short Refinance
  5. Do nothing and most likely end up in Foreclosure at some point

As we have wrote before, the FHA Hope for Homeowners program and the FHA Secure program are semi-not-real-- meaning these loans are just not getting done in most situationseven though the media makes it sound like they get done all of the time.

So it seems that most people I talk to are a candidate for a Loan Modification or an FHA Short Refinance or Foreclosure.

Many times, I am asked "what is the best way to get a loan modification done" and my answer generally is "try to do it yourself and if you end up frustrated, then hire a loan modification firm to represent you to work with your lender to get your loan modified."

Here are 4 tips when deciding which loan modification firm tohire that can hopefully ensure your chance of successfully getting yourloan modified at a fair price:

Make sure that the loan modification is "attorney based". Thismeans that you will actually have a legal firm representing you, notjust a sales organization.  The loan modification company will beworking with your lender's loss mitigation department - and somehowthese departments seem to respond better to attorneys than they do topeople who are not attorneys.

Shop around. Loan modification companies have all differentkinds of pricing models -- some charge $3,000 up front and noguarantees.  Some charge $500 up front, then 2% if your loan issuccessfully modified. Some charge a flat-fee.  There is a wide varietyof pricing models, so be sure to speak with AT LEAST 2 or 3 differentcompanies before making your final decision.

Look for them, don't let them look for you. If you arecontacted by someone about "having your loan modified", be verycareful.  Many times, these are the most aggressive salesorganizations. Good loan modification companies don't use thesetactics, they know that there are plenty of homeowners who need theirhelp and don't need to aggressively go after them.

Ask around for a referral for a good loan modification company.You may be surprised to learn how many of your neighbors have had theirloan modified already.  Many of them used a loan modification companyto assist them in getting it done -- don't be afraid to ask for areferral.

Do loan modifications work?

Yes.

I have heard and seen probably hundreds of success stories of people getting their loan modified -- and in a time where so few (if any) people got a FHA Hope for Homeowners loan, it makes sense to be smart about how to improve your chances of getting your loan modified.