While struggling homeowners across the country grasp for help from the government through loan modifications, there is much debate over the loan modification fees being tacked on upfront by some companies that help perform the actual modifications. Loan modification fees are to some a necessity and to others a disgrace. The question remains: Should a company charge already strapped homeowners with a fee upfront or should the company hold their fees until the clients have modified their loans and then redeem their money?
On 7/20/2010, the FTC(Federal Trade Commission) implemented a ban on up-front loan modification fees set forth by loan modification companies. This rule requires mortgage relief companies to make good on their promised results before charging or accepting payment from consumers. Under the rule, companies cannot be paid until they have a documented offer from a mortgage lender or servicer that lives up to the promises they have made. While this comes as a relief to all consumers due to them not having to to pay yet another fee, some companies are not so happy about the new ban on up front loan modification fees. Their debate shows some merit as well.
