By Eric Olsen Executive Director HELPS Nonprofit Law Firm, www.helpsishere.org
Ethel, a 72 year old widow called me recently. She was three months behind on her mortgage. She had just received a call from a company who wanted to talk to her about helping her with a mortgage modification. She asked them how they found out about her default. She was told they had an access to a list. Yes, they did charge a fee. But they couldn’t share that with her until they had more information. I am the Executive Director of HELPS, a nonprofit law firm that helps Seniors maintain their financial independence. We protect seniors nationwide from collector harassment. We also counsel seniors in other areas. I regularly speak with seniors behind on house payments, with house payments they can’t afford or who are facing foreclosure.
Ethel’s home had no equity. She had a payment she could no longer afford. There are companies and attorneys, like the one that called her directly, that offer help for mortgage modifications. These companies charge a fee. Mortgage modification assistance where a fee is charged is an area that is ripe with scammers. There are certainly a few exceptions. However in my experience, most companies and unfortunately many attorneys skirt illegalities to offer this service, charging a fee, knowing they will never be successful in helping the client.
Seniors often don’t realize that there are nonprofit companies that provide mortgage modification assistance at no cost. I have had extensive experience with organizations that charge a fee for mortgage modification assistance. I would never advise a senior, or anyone for that matter, to seek the assistance of such a company. Especially when there is always a nonprofit company that offers the same assistance and in my experience, at a much better success rate than a company that charges a fee.
HAMP, or the federal Home Modification Mortgage Modification Program, which many people have heard about, officially ended December 31, 2016. However because this federal program ended doesn’t mean that mortgage modification still doesn’t exist. Most mortgage lenders have programs available to help people modify mortgages.
This doesn’t mean a person will be successful. However lenders know the reality of foreclosure. The home comes back to them and they are never able to recoup their investment in the loan and costs of foreclosure. If a loan can be modified that makes economic sense, they have an incentive to help a homeowner stay in a home.
While Ethel was on the phone I searched on the internet, typed in the city near where she lived and “nonprofit mortgage modification assistance.” I immediately found a website for a nonprofit organization that provided this type of service at no charge. I called and confirmed their availability to render this service. I provided the number to Ethel. I explained that a modification likely would not be successful in her case, which she understood, but she wanted to try. She was grateful to learn she could receive this help at not charge. These nonprofit housing assistance companies are funded by grants and from other sources. Since nonprofit housing agencies offer this assistance at no charge, they have no incentive to give incorrect information in order to justify a fee or a continued fee to a senior seeking a modification.
Mortgage modification is never a sure thing. If seniors are determined to try they need to understand that they don’t need to pay for this help. Better help is probably available for free.
Eric Olsen HELPS Nonprofit Law firm “bringing peace to the lives of seniors and disabled” www.helpsishere.org