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Should I Accept My Loan Modification?

Requesting a loan modification is far from a quick or easy process.  Lenders have a reputation of dragging their feet when it comes to approving applications for modification.  Many lenders make their borrowers wait up to a year before they offer an answer to the original request to modify the loan.  In many cases, this lack of communication with the lender makes borrowers grow anxious.  Instead of approaching an offer to modify a loan with a level head, borrowers who have been strung along for months on end resort to accepting the first offer their lender makes, whether it is anything close to what the borrower originally wanted or not. 

For borrowers who hire an attorney to represent them, the answer to the question “Should I accept my loan modification” carries a very positive answer:  No.

Well…not as long as the attorney representing the borrower thinks that they can do better.  In the end, the choice is ultimately that of the borrower, but they would be unwise to go against the advice of their attorney.  Their attorney has much more experience in dealing with lenders than they do, and their attorney knows what a good deal is.  Why shouldn’t the attorney be listened to?  Especially when the attorney has a proven track record?

When the lender makes an offer for modification, they aren’t saying “take it or leave it”; they are actually starting the negotiation process.  The offer doesn’t have to be taken, but many homeowners, especially those without lawyers, don’t realize this.  If a person disagrees with what is offered, they can make a counter offer.  This is the whole point of a negotiation.

Attorneys know how to negotiate and how to talk the lender down.  They also know how to apply legal pressure to compel the lender to make more of an effort to lower the monthly payments of the loan in question.  In almost every case, the first offer is not the best offer the lender can make.  The lender knows that most borrowers will leap at the first offer made, so they intentionally leave the offer inflated.  What do they have to lose?  Besides, the borrower is already desperate; otherwise they wouldn’t have filed for the modification in the first place.

Lenders know when they are dealing with an attorney and when they are dealing with a solo borrower.  Lenders prefer to deal with those who are not represented by an attorney because they know that they can make so much more money in the long run.  In most cases, even the first offer presented to an attorney will be considerably lower than the first offer presented to a borrower applying for modification on their own.  If this doesn’t clearly illustrate how little lenders think of their borrowers, nothing else will.  Lenders see their borrowers as nothing more than a check in the mail every month, nothing more.  They will do everything they can to keep that check coming, whether it leads the borrower into financial ruin or not.      

Borrowers shouldn’t sell themselves short.  They shouldn’t let their lenders walk all over them just because they don’t know a lot about the lending industry.  Borrowers should seek the advice of a professional with experience in foreclosure law who can negotiate on their behalf and represent them in court should the lender refuse to budge.  Only an attorney can perform both of these tasks on behalf of their client, and only an attorney will be any good at completing the tasks.