Please help with forebearance and modification fees

Hi all.

I have been working short sales for a couple of years. I am coming across more and more people that want to stay in their home and would like to work for these people as well.

Do most people charge an upfront fee for forebearance or loan modifications? What kind of contract is involved between me and the homeowner? I have no problem with a guarantee and partial refund if I am unable to work something out for them.

Or is it more common to ask for a portion of the fee up front and the remainder after the work out is completed? If so, how can you be sure the homeowner won’t try to get away without paying the balance? Some mention listing it on the HUD? Is there a closing for a loan modification?

You can tell I am new to this part of the business. Any suggestions will be greatly appreciated. If there are any courses that any of you might recommend, I would appreciate that suggestion as well. THANKS!!

After the short sale is closed, the end buyer has control of the property. If you are the end buyer part of the short sale package was the hardship letter from the previous homeowner who couldn’t afford the property. I don’t see the upside to this.

If you are going to do loss mitigation you will need to get your fees up front. The problem you often face is that the people who need your services have no cash. To be ethical you need to guarantee your services. We always agree to a refund of fees less a small setup charge if we do not successfully negotiate a successful conclusion

More importantly than your fee is that you should evaluate the individuals situation before you accept the case. You need to know what the lender will look at to consider a forbearance or loan modification. The customer needs to be able to pay an upfront portion of the arrears to the lender and also be able to pay the original mortgage amount plus a make up fee in order to get a forbearance.

Not all lenders will do loan modifications.

Like any business you need to get some education first.

Thanks Marketingmaster!!! I was aware of a lot of this such as the mortgage company not being willing to work with us etc. I also have no problem in refunding if the situation does not work out. I assume you get a contract between yourself and the homeowner. Can you give me an idea of what your contract says? That is where I am a bit lost. Thanks again so much!!