Mortgage Loan Modifications seem to be the hot topic in real estate….

Watch this FREE Video Now about Loan Mods. Learn how to modify your own Mortgage and then start offering Loan Mods for others…for a fee.

Question: What is  a Loan Mod?

A Loan Modification is a permanent change in one or more of the terms of a mortgagor’s loan.  It allows the loan to be reinstated, and it results in a payment the mortgagor can afford.

Question: Can a mortgagee include late charges in the Loan Modification?

Answer: Mortgagee Letter 2008-21 (US Department of Housing and Urban Development) states that accrued late charges should be waived by the mortgagee at the time of the Loan Modification.

Question: What do I do if my state requires a license?

Answer: Every week the states are refining the laws regarding this topic. Even in the states where an additional license is required (which as far as I know accounts for less than 10 states) you have 3 options:

1) Get the license.
2) In many of the states that do require a license, if you don’t charge upfront fees you don’t need a license. For example, in California a real estate license is all you need to offer mods…but, if you require up front fees you need a license…so, no up front fees. There has been a lot of bad press about companies that charge up front fees and don’t complete the mod. So, understandably the states are cracking down for this reason.
3) Work with a licensed company. 2 benefits…’partner’ with an existing company..you originate the mod…they process the paperwork etc. Basically, you would ‘work for’ the licensed mod company. You create the business, complete 2-3 forms..then they do the rest. Generally speaking, you can arrange a 50/50 split. $1500-1800 to you. Another side benefit of going this route is that they may be in the position to send you listings. They will have many borrowers who (for whatever reason) don’t follow through on the mod. Many of those sellers will turn into short sale leads…for you.

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