The Career Of A Riverside Loan Modification Broker

The loan modification business is booming. With 11+ million mortgages currently in default, mortgage loan modifications quadrupled during 2008. Because of the decrease in real estate values, many homes are presently worth less than the mortgages securing them, and lenders are in an unfortunate position. Consequently, homeowners with adjustable rate mortgages are being coerced into steeper monthly payments they cannot manage to pay.

A loan modification broker, acting for a homeowner, negotiates with the lender to adjust the terms of the homeowner's current mortgage in order to lower monthly payments and secure a fixed, rather than adjustable, interest rate. A skillful broker will additionally negotiate with the lender to fold into the remaining principal balance any delinquent charges, interest, and/or escrow fees to bring the account up to date and avoid further delinquency and foreclosure.

Although a number of homeowners secure loan modifications for themselves, they are likely to form agreements which leave them with higher loan payments in later years. An capable loan modification broker can secure for the homeowner a better loan modification agreement than the homeowner could achieve by himself.

Loan modification brokers can be self employed agents, or employees of attorneys or loan modification companies. The most successful loan modification brokers are former mortgage, banking, lending and real estate experts or attorneys. But since no licensing or training is mandated, brokers may just be ordinary individuals who are willing, for a significant fee, to negotiate for the homeowner while having no more expertise than the homeowner himself. Some of these brokers have been described as predatory and accused of unrealistic claims, outrageous fees and of exploiting terrified homeowners.

The income earned by loan modification brokers depends on whether they are self employed and collecting their own fees, or are working for loan modification companies, attorneys, non-profit or government agencies, and receiving salaries and/or commissions. Brokerage fees are typically 1% of the outstanding loan amount and may (or may not) cover any attorneys fees.

The goal of a loan modification broker is to help homeowners to keep their homes, and to avoid delinquency and foreclosure. To accomplish this, a successful loan modification broker must find people whose homes are in jeopardy of going into, or are already in, foreclosure. A loan modification broker must then persuade homeowners that he can skillfully negotiate a loan modification on their behalf because he: (1) has a good track record; (2) has insider information about and contacts with lenders; (3) has extensive knowledge of housing, mortgage and foreclosure markets; (4) has had applicable education; and, (5) has professional credentials/licensure.

A effective broker must then demonstrate to the lender why a loan modification agreement will make or save the lender money. He must additionally persuade a lender that it is more cost effective to modify a loan than to foreclose a mortgage. To the extent that a loan modification broker can do that, the richer, happier, and more successful he or she will be.