How to Find a Reputable Loan Modification Company

Finding a reputable loan modification company could require considerable time and research. The Federal Trade Commission recommends that you use extreme caution in dealing with loan modification companies because of widespread abuses. Working directly with your lender can result in a successful loan modification for free, or you can get free help from a nonprofit housing counselor certified by the U.S. Department of Housing and Urban Development. The housing counselor can provide all the services of a loan modification company, including convincing your lender to change various terms of your loan to make it affordable--the primary goal of loan modification. Despite the free help, you have a right to seek the services of a for-profit company if you wish.

Instructions

1

Visit with a government-certified housing counselor in your area. Sitting through a free consultation with a housing counselor could be valuable even if you are determined to hire a for-profit loan modification company. The housing counselor can tell you what to expect during the loan modification process and how to spot loan modification scams. Find a nonprofit counselor in your area by checking the website for the U.S. Department of Housing and Urban Development (see Resources).

2

Ask the counselor to refer you to reputable loan modification companies in your area. Explain that you simply prefer hiring a for-profit company. The counselor may offer referrals that could include local real estate attorneys specializing in loan modifications or even retired local bank executives who are working part-time out of their homes on loan modifications.

3

Call your bank or credit union. Speak to a loan officer to ask for more referrals. Tell the loan officer you are seeking referrals for loan modification companies operating in your area. You'll want to meet with representatives from some of the companies face-to-face before making a decision.

4

Scrutinize your list of referrals for reputable loan modification companies by entering the names into the database for the Better Business Bureau (see Resources). The database will tell you about complaints--if any--received about the businesses by the bureau. Eliminate companies from your list if they seem to have a troubling number of complaints lodged against them--even if the companies were recommended to you as being reputable.

5

Meet with some of the companies on your final list. Ask the companies if they are in compliance with the Mortgage Assistance Relief Services Rule announced by the Federal Trade Commission in 2010. Among other things, the rule makes it illegal for loan modification companies to collect upfront fees before providing services, and from making false and misleading statements about possible solutions for loan modifications. Ask the companies to provide at least three references you can contact, such as former customers.

6

Speak with the references as you make your final decision about choosing a reputable loan modification company.