Your Loan Mod Looks Good, Only A Couple More Weeks For A Decision
True story. A couple of past clients of mine had fallen on hard times and did not have the equity to do a “regular” refinance. Furthermore, their loan is not Fannie or Freddie. So, after they missed a mortgage payment, their lender BIG BANK sent them a package regarding a possible loan modification.
They figured, “what have we got to lose by sending in the paperwork?” So they gathered two years tax returns, last 30 days of paystubs, last 2 months bank statements, a letter of explanation of why they fell on hard times, and completed the application form.
They overnighted the documentation back to BIG BANKS’s loan mod department on May 6th, 2010. After two weeks, they called to make sure the information was received. It was and they were told to call back in another couple of weeks.
They called back as instructed and were told that they were missing basically all of the paperwork that was originally sent in. So they faxed it to the loan mod department this time and were told to call back in a week. They also received another package re: a loan mod with BIG BANK.
This cycle continued until November 30th, 2010, when they received a letter stating that all of their items had been received and that a “decision” would be given within 30 days. They called at 30 days, 45 days, 60 days, 75 days, 90 days…”it’s still in line for a decision.”
During all of this time, they were given conflicting information by the BIG BANK regarding their payments. Some days they were told to keep paying, other days they were told not to pay. Money was tight so they did not keep paying. Better to put food on the table.
Finally, they received a letter on April 16th, 2011, via Fed-Ex that stated, “You do not qualify for a loan modification and foreclosure proceedings will begin on May 16th, 2011.” The letter really did not list why not, just not. However, it did show what the modified payments would have been if approved…thanks for the carrot.
Fortunately for these folks, a family member came to their aid and brought the mortgage current prior to the “deadline” set by the BIG BANK. Moreover, their employment situation has improved and they are now able to handle the non-modified payment. But, the last 10 months was the most stressful period of time in either of their lifetimes. Pretty sure BIG BANK didn’t have any trouble sleeping.
