When the Making Home Affordable Program was launched, the Department of Housing and Urban Development (HUD) had a pretty good network of counselors in place. Not only were these counselors free of charge and highly trained in the ins and outs of mortgage modification procedures, but they would advocate for the homeowner in seeking the best available modification under applicable regulations and policies. Where banks might give modification seekers the cold shoulder, HUD-approved housing counselors had back channel connections that would push the request forward in a reasonable amount of time.
For these reasons, the second edition of The Foreclosure Survival Guide (which I wrote about the same time as the Making Home Affordable Program launched) strongly recommends that you hook up with a HUD-approved housing counselor to help you deal with your bank under its--and the Making Home Affordable--guidelines.
New Landscape: Not Enough HUD-Approved Counselors
Unavoidably, the number of people seeking assistance from HUD-approved housing counselors ballooned with the advent of the Making Home Affordable Program, and from all accounts HUD's housing counselor program has not kept pace. My clients have consistently reported that working with HUD counselors provides little or no advantage over working directly with the bank, and that counselors, like banks, lose paperwork and require redundant submissions over a long period of time without any tangible results.
Old Advice May No Longer Hold True
In short, my previous universal answer to people facing foreclosure ("call 1-888-995 HOPE and hook up with a HUD-approved housing counselor") may no longer be operative in all -- or even most -- cases. On the other hand, you have little or nothing to lose by starting with a HUD-approved counselor, provided you approach the relationship with a tad of skepticism. And my advice in The Foreclosure Survival Guide about not paying for modification help still holds. In most cases it won't help you to hire a lawyer or real estate broker to assist with your modification request. The fact is, too many people are seeking modifications for most banks to respond in any reasonable time frame.