“Dear Steve,

I have been attempting to get a home modification for the past 2 years and I was scammed once before.

I contacted a “non-profit” company called Consumer Protection Assistance Coalition and I have been offered a chance to go in and have a meeting with one of the lead attorney’s. Before I set an appointment, I asked them if I would have to pay a fee for their services. Can a non-profit company charge you fees?

Kevin”

The Answer

Dear Kevin,

Yes, a nonprofit group can charge you fees. Many people misunderstand the term non-profit or not-for-profit. All it means is that the company is supposed to serve a charitable purpose and in return they are not taxed on their income. They can make as much extra money as they can.

My suggestion is always to contact your lender and a free HUD Housing Counselor first to get an idea of what solutions might be available before you spend any money.

You can also try the resources below.

Mortgage Help

Be sure to first read How Not to Get Scammed by a Mortgage Loan Modification Company.

Debt-to-Income Calculator

First you’ll need to determine your current debt-to-income ratio. The target debt-to-income ratio under the Home Affordable Modification program is 31%. Use this free online DTI calculator.

Mortgage Modification Calculator

The mortgage modification eligibility calculator will ask you several questions and then show you which programs you may be eligible for.

The free mortgage modification calculator can be found here.

Free Mortgage Modification Help and Counseling

If you have questions about the process or eligibility you can call 888-995-4673 and get connected with an mortgage modification adviser for free. This help is provided by government subsidized HUD Housing Counselors and they can be a big help in navigating the modification process.

In order to assist you, the housing expert will need to gather some information from you. Have the following documents handy:

• Information about your first mortgage, such as your monthly mortgage statement.
• Information about any second mortgage or home equity line of credit on the house.
• Information about the monthly gross (before tax) income of all household members contributing to pay the mortgage, including recent pay stubs if you receive them or documentation of income you receive from other sources.
• Information about your savings and other assets.
• Account balances and minimum monthly payments due on all of your credit cards.
• Account balances and monthly payments on all your other debts such as student loans and car loans.
• Your most recent income tax return.
• It may also be helpful to have: A letter describing any circumstances that caused your income to be reduced or expenses to be increased (job loss, divorce, illness, etc.), if applicable.

You can also get free help and housing counseling from a local HUD approved counselor. You can find your local free housing counselor, here.

Contact Your Mortgage Company

Not sure if your mortgage company offers modification programs? Not all do. You can contact your mortgage company to ask them about mortgage modification programs you might be eligible for. Click here to find your mortgage company.

NPV Calculator

Want to know the net present value (NPV) of your home for the mortgage modification process? No problem, use the free NPV calculator to find out. The NPV calculator is right here.

The calculator can be used by homeowners who have been denied a HAMP modification because of their NPV result or can also be used by homeowners prior to applying for a HAMP modification to help them better understand the NPV evaluation.

No Advance Fees

The Federal Trade Commission has a Mortgage Assistance Relief Services Rule which prohibits advance fees for mortgage rescue services or mortgage modification help.

Please post your responses and follow-up messages to me on this in the comments section below.

Big Hug!

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