Hello Everyone,
I was just wondering if any of our seasoned veterans or any Signing Agents have seen an increase of Loans Mods in recent months? Thanks in advance for opinions and or any information anyone can provide.
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Yes and that was expected once rates increased. It’s all part of the cyclicality of the mortgage industry. When rates are low, refis increase and HELOCs/Loan Mods are slow. With rates up, Refis drop but HELOCs and Mods grow. There will always be ebbs and flows in the market and it’s important to know this is normal.
Purchases and sales have been steady as long as supply is available. Right now, I am doing a lot more closings for cash buyers.
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For those of you that are inexperienced, loan mods are the restructuring of a mortgage by the lender. In leu of an expensive foreclosure the lender has agreed to tack the delinquent loan payments onto the back end of the mortgage. “Modified” to a 40 year loan with an increasing interest rate that becomes fixed after 4 years. Usually a last resort lifeline that seldomly works. The assignment doesn’t pay well and the signers can be a bit sketchy. I remember one smug signer boasting of posing as a minority because “they” the bankers I presume, wouldn’t approve his modification otherwise.
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I’ve received several but have rejected them due to stupid low fees. I’ve countered the $30 fee but it’s just crickets after that. 
. Someone’s taking them though. I’m in a large rural county and $30 just won’t cut it for a 30+ mile round trip!
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$40 is not acceptable for a Loan Mod. I work with one company that will pay double. The signings are easy and fast.
Also, not all loan mods are a term extension. A forbearance, as you described, by tacking on delinquent payments on to the end of the term is only one way. A lower payment can be offered by increasing the terms to 40 years is another way. Lenders can also offer an interest rate reduction to lower the payment in lieu of a longer term. Finally, the lender can forgive delinquent fees in order to get the borrower back on track.
Source: I managed a Loan Mod program for Freddie Mac.
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Great explanation Richland, thanks. Is $80 from a signing service enough? Also what is the typical notary fee on the borrowers settlement statement?
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No settlement statement on a Loan Mod. Most of those I do are about 20 pages. The signings take 10 minutes maximum since they already have been through the docs.
Considering I received a notification for a full refi today from Mortgage Connect for $75, I’ll do the Loan Mods within a 10 mile radius for $75 any day. I used to get $125 from one lender for loan mods but they have lowered their fee to $75 too.
Starting to see an uptick in Laon Mods as the economy continues to slow down. I’d expect an increasing number of Mods over the next year.
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