Ok folks…it is time someone stepped up to the soap box and told the truth about foreclosure “rescue” services. Sure, they promise to save your home from foreclosure or help you get a mortgage modification at a 2% interest rate with a hefty amount of principal reduction. They are going to save your home; all you have to do is fill out the paperwork and pay the fee. Wait a minute? Pay a fee? Where is the logic in that? Let’s see…a person is in financial crisis and is being asked to pay a company anywhere from $800 to $3500 for their services? They SAY they can get you this great deal but when you read the mouse print on the contract it says there is no guarantee.
Listen to that whisper that says it is too good? Listen to the logic and let me debunk a few myths with the truth.
MYTH: Anyone can get a mortgage modification.
TRUTH: Anyone can apply for a mortgage modification; however, not everyone will qualify. A person has be able to demonstrate a financial hardship. The rigorous process is intended to provide documentation to your servicer that demonstrates you had or have some legitimate reduction in your income. Then the investor of your loan gets to decide if your modification can be granted.
MYTH: A mortgage modification will reduce my interest rate and principal on my loan.
TRUTH: If you get a modification, yes, your interest rate will likely be reduced at the investor’s discretion. Typically, interest rates on a mortgage modification are slightly above the market interest rate. The principal reduction is RARE in the Midwest and certainly in southwest Missouri. Principal reduction is a tool that helps seriously underwater homeowners (like tens of thousand dollars) afford their mortgage payment.
MYTH: They can stop the foreclosure on my home.
TRUTH: Maybe; however, it doesn’t solve the problem. If a person’s intent is to stop the foreclosure, for heaven’s sake, use a local attorney. They are a lot less expensive and will be more honest with you than someone in another city or state. The bigger truth here is, if a person isn’t looking at the whole financial picture, they are likely to end up in foreclosure again. That is where we come in. So what is a person to do if they are facing foreclosure or maybe just behind in their payments? Please call us. As a HUD approved housing counseling agency, we are restricted from charging you a fee for this service. We are highly trained with a great deal of experience. You can talk with a counselor who will look at the WHOLE financial picture and give you honest answers to all of your questions, discuss your options and help you create solutions…free of charge. Now that is logical!