Are Loan Modification Companies Legit?

The vultures come out when there is blood.  If you are behind on your mortgage a loan modification may look like a simple solution.  But wait most of these companies are going to charge you a fee for their service.  Is it worth it?  I don’t know, you can probably do it yourself.  Your first step is to call the loss mitigation department of your bank and talk to someone about your situation.  The most likely outcome will be a forbearance agreement.  This will give you a lower payment for a few months and tack on the difference at the end of the loan.  If you are real lucky you can get a lower interest rate and principal reduction.  In either case you can ask the bank for this yourself with out a fancy pants Loan Modification company.

The money could be spent in a much more responsible manner.  What this country needs is jobs, not a bailout.  If there were more confidence in the economy and jobs, the real estate market would turn around.  My years experience have proven to me that when people have confidence in their jobs, they will buy houses.  It does not even matter where interest rates are at, they will buy homes.

Do Not Bailout The Housing Market, Stimulate Business Instead

How about rewarding people for being responsible instead.  I have compassion for folks that are having a hard time paying their mortgage, I really do.  But the fact of the matter is that many of these people that bought these homes should not have been in the market for a home in the first place.  Bailing them out probably wont help much anyway.  No Income and stated income loan programs made it easy for almost anyone to buy a home unfortunately.  I think the money would be better spent on stimulating businesses to prosper.  This is where the real impact will be made for America.  Having a stable job market and  business environment will build consumer confidence thus start a rebound of the economy.  Right now we are in a market of no confidence and people are scared.

The laws of nature state that when you eat to much you get fat.  There is no magic skinny pill to make you skinny.  This is why it wont work.  Republicans and Democrats I invite you to contact your legislator and stop this insanity.  Lets get back to sound lending fundamentals and let the market do its work to sort itself out.  Spend the money on business incentives instead.

If you are having trouble with your mortgage call your bank or lender.  They are willing to work with you right now to get your mortgage manageable.  In most instances you can work out a forbearance agreement or eve new loan terms with a lower rate and principal balance.

You may have seen the commercials on the tv and where curious as to what exactly is an Offer in Compromise? If you are unable to pay your income taxes in full and an installment plan wont work, a person may be able to do an offer in compromise. An offer in compromise is looked at as a last resort option after a taxpayer has exhausted all other options. The reality is that the IRS only resolves less than one percent of all tax bills owed through this type of method. The TV commercials make it seem like you can just pick it right off the shelf and get it done. The reality is that your chances of being able to work this option out with the Internal Revenue Service is remote.

What is an offer in compramise?

What is an offer in compromise from the IRS? It is an agreement between the IRS and a taxpayer that completes the taxpayers tax bill. The IRS has the authority to settle or compromise a federal tax bill by taking less than what was originally requested. This will only be allowed under certain conditions. An IRS tax bill can be compromised for the following reasons:

Can I negotiate my income taxes?

1. Doubt as to liability, There must be doubt that the tax bill has been assessed correctly. The Internal Revenue Service can make mistakes and may be unclear as to what a tax position is for a taxpayer. In this case they will look at the possibility of lowering the amount that you will need to pay.

2. Doubt as to collectibility, Will the taxpayer ever be able to pay the tax bill in their lifetime, the Internal Revenue Service will consider settling the tax bill for less. Even if you get an offer in compromise, you may still have a large bill on your hands to pay back.

What is effective tax administration?

Effective Tax Administration, When the IRS has no doubt that the tax is correct and could be collected, but there is an extraordinary circumstance that allows the IRS to consider an offer in compromise. To be considered for a compromise on this basis, the taxpayer must demonstrate that collection of the income tax would create a financial burden or would be inequitable or unfair.

What is a Form 656?

If the offer in compromise is approved, the IRS will give you a revised Form 656, which is a revision on what your taxes are that you will have to pay back. A taxpayer could also get a Form 656 – L, which would declare that there is some doubt to the liability when it is believed that the tax liability is actually correct. A taxpayer is can’t file offers at the same time for claiming that both the tax liability is incorrect along with no ability to ever be able pay it off.

Can I do an offer in compromise on two concurrent years?

Form 656 also includes changes in the guidelines as the IRS will no longer investigate an offer for a tax year or tax period that has not yet been assessed. The IRS will return the offer back to the taxpayer if it is turned in solely for a tax period that has been unassesed.

This information is designed to be of general interest and should not be considered legal advice. The specific information discussed may not apply to you. Before acting on any matter contained herein, you should consult with your personal legal adviser or attorney.