Why not make a loan modification yourself?

No matter what situation you come up with, it almost always boils down to the eternal conflict between time and money. Do you want to spend your own time doing something and spend less money, or do you want to spend more money to have someone else do most of the work for you? Another question you might want to ask yourself is: can you get the job done?

Loan modifications are no different. If you want to go through the process on your own without paying a third party to represent you, it will take up a lot of your own time. First of all, it is important to understand the concept of “opportunity cost”. When you set aside a lot of time to accomplish something, and that time could be better spent making money at work or spending time with your family or friends, you need to weigh the cost of what you’re doing with that time could.

When it comes to loan modification, if you go the solo route, you will bear the brunt of the grunt work, such as a loan modification. If you’re struggling financially, it’s understandable why you’d want to avoid spending even more money on representation when negotiating your loan modification. Unfortunately, being frugal in this area can be the most expensive decision.

Assuming you have the time to tackle the loan modification process yourself, you then need to be sure that you have the knowledge necessary to effectively present your case. There are “do-it-yourself” kits and other online resources designed to help you prepare to negotiate the terms of your loan, unless you’re already familiar with real estate, banking, and loans, or you’re superhuman in your commitment to learning all about them, you will not be able to match the knowledge of someone with education, training and experience in these areas.

Essentially, your goal is to give the bank a clear picture of why they would benefit from a change in the terms of your loan. Sad as it is, the bank is not run charitably towards those who are having a hard time; The bank is run profitably. Therefore, you must put aside emotions and enter into negotiations to discuss numbers, percentages, interest and why the outcome will be positive for the bank. If you don’t think you can successfully learn and handle all of this yourself, you should consult a professional loan modification attorney.

The number one reason not to do it alone is that banks can be predatory and are far less likely to take a person seriously. Consider if you were standing trial for murder and trying to defend yourself instead of hiring an attorney to defend you. Just the fact that you have an expert arguing your side of the case will cause others to take a closer look and have more respect for what is being said. It’s unfortunate, but you really benefit from having a strong ally in something as important as negotiating a modified loan.

“The best way to protect yourself is to educate yourself about all the possibilities. Make sure you communicate openly with your lender on this topic. If you have hired an attorney to represent you at the bank, it is imperative that you express your concerns about future liability,” said Joel Jacobi, managing attorney at American Residential Law Group.

In the end, even with careful research and effort, you simply cannot compare the results of a professional company with resources and staff dedicated to helping you. If you can save hundreds a month on your mortgage payment, you can certainly justify the expense of finding a third party to do the loan modification.