Vested Interests......

I was watching TV last night when a commercial for CARFAX came on. It shows the guy with the sock puppet that says "Car Fox" and he's telling the couple that it's just as good and that they don't need a CARFAX. Funny commercial.....but moreover it mirrors the current loan modification industry.

So of course the car dealer has a vested interest in selling his product and making as high of a profit as possible. This is what they have a reputation for.......just like most other businesses. If a car was purchased with an unclean CARFAX, then the value is considered to be less thus leaving the consumer with paying full cost, for less of a car. This holds true in the loan modification industry with both high priced loan modification companies, and the lenders/servicers themselves.

Banks have a vested interest in selling you their products (mortgages, car loans, credit cards, etc...) and making as high of a profit as possible. Since inception, this is what their reputation is. If they borrow the money and pay 3% in interest on it, and lend it to you at 8%, they are more than doubling their costs. It gets worse with credit cards when you're getting charged as high as 32% after fees and interest. If the car dealer took in the car for $20K and sold it to the customer for $40K, it would be considered "ripping off" the customer. In the banking world, this is an everyday occurrence. While they are doing this, they have the "puppet" talking to the media and spending millions of dollars to discourage customers from using any "for profit" agency and redirecting them to either a non profit organization (where they know they can just go through the motions and give out half handed offers as the non profits are inexperienced to know any better) or coaxing them into just working with the bank directly. If the customer gets "sold" into doing this, they are now relying on the multi-billion dollar corporations who have a vested interest in making as much money as possible to magically change their business structure to just "do what's best for the customer". I believe the definition of insanity is attempting the same thing the same way over and over again expecting a different result.

Unfortunately, there are companies out there that are preying on the American homeowner. One of the major complaints is a misrepresentation of services. Due to changing legislation, many of these higher priced companies have changed their tactics using big words like Internal Loan Doc Audit, and Attorney Based/ Law Firm. Loan modifications are not rocket science, they are semi-complicated and the average American can't do it themselves. For a professional mortgage broker that knows what he/she is doing, and implements a set process with maintaining good contacts and relations with various lenders an average modification should take between 7-10 actual man hours. If you're really good you can cut it in half. So assuming that a company charges $4500 (you're paying that company more because they are "really good"), it takes them 4.5 man hours to complete, you've now been charged $1000 per man hour (while they are paying their paralegals who are actually doing the work $8.00 an hour). No wonder so many "Attorneys" are jumping on the bandwagon. If you pay $2000, and between placement, processing and negotiations it takes a total of 10 man hours, you've then paid out $200 per man hour. That's 1/5th of the cost! My old Platoon Sergeant used to tell us "I don't care how you get from point A to point B, as long as you get there and the mission is accomplished".

So if the end result you're looking for is to get caught up on your past due payments and make the payments to be more affordable during your time of hardship, why pay more? You can tell me all you want how the "Shamwow" is bigger, better and worth the additional money, but the bottom line is that it's the same thing I can get at Wally World for half the price. You work hard for your money, don't pay more for the smoke screen, contact PMC today.