Where’s My Loan Modification?
A loan modification is very good in theory, but unfortunately, there are very, very few homeowners who actually receive one.
For example: with Bank of America, as of March 2010 less that 7% of ELIGIBLE homeowners had received a loan modification! Amazing.
The 1st report card (end of 2009), of the Obama administration’s foreclosure rescue plan also showed slow progress. The Treasury confirmed that only 9% of delinquent borrowers were placed in trial modifications at that time. With abysmal statistics like these, one should not get too excited about the idea of actually obtaining a modification, but if you have the time and hours to devote to this process – then by all means – go for it.
Based on our prior experience assisting clients with loan mods, here’s a short list of items you should be aware of (varies by lender):
- Plan on documents getting lost. From day one, start an activity log and document everthing – the who/what/when/where/employee id#’s/ overnight delivery tracking numbers/name of person who received the pkg/confirmation the contents of the pkg got entered into their system, etc. If at the end of the process you are denied due to missing documents, you’ll have proof.
- Make several copies of everything you send in. Depending upon who the lender is, you may need to resend these items at least a half a dozen times.
- Don’t expect to get the same answer every time you call – or anytime you call. This goes both ways: reconfirm good news as well as bad news.
- If making trial modification payments (which can be half of your original payment), beware of making over the phone “verbally authorized” check payments. If an “oversight” occurs and you are charged the original payment amount, it may take weeks for your lender to try to resolve and credit you back – if at all. Worse yet, if the “oversight” causes your checking account to become over-drawn and you do not have overdraft protection on the account, you have now missed your trial mod payment and thus your chances for a modification!
- Don’t expect accountability. It’s possible that you might not ever speak to the same person twice. Large lenders have call centers throughout the world! Document – Followup – Confirm.
- Persistence is key. Be prepared to possibly devote a significant amount of time and energy trying to unravel and understand the inner workings of an extremely large lending organization that is overwhelmed and under-staffed.
