Can I get my loan Modification expenses back?

What is the name of your state: Florida

Hi,

I hired a legal group (or so they called themself ) to negotiate a loan modification with my bank. I pay certain amount up front a monthly installment until the process is complete.

The problem I have is that I don't see the end of the tunnel with this. It has been going on for 20 months now and I still don't have any results.

It's hard to get in touch with them and get some details as they always blame the bank for taking long. I am seriously considering hiring another firm to finish the job but if I do I will loose the money and god knows how much more would I need to pay.

Can I sue this firm to get my money or at least part of my money back? Specially since they didn't do what they promised? How many months is an "aceptable" time to see some results?

Thank you so much for your feedback

There is a current discussion on brokerdirt (A mailing list for property-law attorneys and other real estate professionals.) about loan modification businesses. While the thread started with questions related to transferring property to a trust in an attempt to delay foreclosure, it quickly went to all loan modification businesses and "loan auditors" along with the illusory promise of a "trial modification".

The bottom line is that many feel modification really is to benefit the bank since it is the bank who has the most to lose if the loan goes bad. It is a complex topic with many specific arguments, but, without knowing who you are dealing with and what the plan is, there is no way to tell if you should continue the process with them.

I do know it is unlikely you are going to get any money back from them, no matter what the argument. (I believe the law changed at the end of last year in order to prevent situations like yours from developing.)

There is a time ambiguity about whether modifications benefit the bank or not. Many banks were pushing mortgage holders into foreclosures and short sales just to get some cash flow. They were just plain out of cash, particularly in 2009, and they were foregoing future payments just to stay afloat now and avoid a takeover. Another bank VP was telling me (also in 2009) that they just didn't want to create any obvious pattern of loan modifications that everyone would end up asking for. He said if everyone got the reduction that a few clearly needed, they'd sink. Asked what his criteria was to say who "needed" the modification, he replied it was the number of defaults that would sink the bank. Basically, they are trying to float on the backs of those who can pay their loans without mods.