What is Wrong With the Current Loan Modification System

As a fellow loan officer I wanted to do loan modifications too, as a part of my business model. If I had clients who were refinancing home loans in Oregon or who were seeking California Home Mortgage Loans and who instead needed a loan modification because they could not qualify for a regular loan, I wanted to be their guy. However, would the mortgage industry let me do that......... NO WAY. Either give up your license and do loan mods or do loans. Well that right there is a huge mistake because who did that leave to do the loan mods? In many instances, a more unscrupulous type of person, the very person who Jerry Brown, the attorney general of California has said he now wants to go after.

Second the problem with the loan modification system is that a loan modification person has to ask the borrower to pay for the modification UP FRONT. The reason they are in the position they are in is because they are financially strapped in the first place and now the loan modifier has to ask for money up front? Why is that?

The reason is that the lender is not willing to put the price of the loan modification onto the loan amount as we do in the mortgage business. Nor is there an escrow company making sure that everyone gets paid properly. Furthermore, if we cannot finish a loan do we get paid. NO. The same should hold true for loan modifications. If the loan modification does not succeed noone has to put up any money. It takes a certain character to ask for money knowing there is a chance that the loan modification might not succeed. Is that the character of a loan officer. I think not. A loan officer wants to help and only get paid if they can perform.

It is these simple adjustments to the loan modification system that would greatly enhance the program. I hope that someone actually thinks to ask a loan officer about how the system could be improved. I think it could only help the loan modifcation crisis that is prevalent throughout our country.