In many states, if you are not acting on your own accord, you must have an attorney present to represent you. No Tom, Dick, or Harry can call up the mortgage company on your behalf. As you can guess, lawyers are not cheap, so a loan mod isn't either. Fierce competition and saturation in the modification market is forcing fees to be lowered, but expect to pay anywhere from $2,000 to $5,000 for a completed modification. Having a second mortgage or multiple borrowers on a single loan will require more paperwork and typically drive up the cost. 

Does the Money Need to Be Paid Up Front?

This is no small question when you are unable to pay your mortgage. The answer largely depends on what your modification agent allows. Some require all funds up front while others allow stagnated payments as they hit certain goals. Expect to pay at least a half up front, around $1,000 at least. Understand that when someone is not paying their mortgage, a modification company is well justified in asking for a good portion of the payment up front.

If My Loan Isn't Modified to my Satisfaction, Can I get My Money Back?

As long as realistic expectations are established and agreed upon up-front, an ethical Loan Modification should return a portion, if not all, of your proceeds. You should be very wary of any Loan Modification company that requires all the money up front and has a no refund policy.

Bankapedia's Take

Loan Modification has emerged as a new way for all the mortgage brokers that fell on hard times during the real estate crash to all of the sudden make money again. Just like the Real Estate gold rush brought plenty of shady characters into the fray, the Loan Modification boom is no different. Be very, very wary of any loan Mod company that doesn’t use attorneys, only takes cash, and requires full payment up front. Unlike the mortgage field, which has its fair share of unethical members, loan modification reps are not required to be licensed. This means no background checks and little accountability. A good loan modification company can make a huge difference in your life, but a bad one can quickly relieve you of a couple thousand dollars and provide nothing in return.