Currently many banks are using every underhanded / evasive tactic to either ignore mod requests OR put so many obstacles in the home owner's way ...that they simply give up.

 

Here's are the latest tactics/ obstacles and a possible ways to combat them.

 

Tactic 1

 

"We didn't receive your package"

 

This is the most common delaying tactic is when the lender is able to convince the home owner to "fax in" their mod package (vs. mailing it).

 

Solution

Never e- mail in your package....always demand a physical address...the addresses of the lender's regional centers can be gotten from web chat room or google search.

Tactic 2

Referring a home owner to a (supposedly) "independent 3^rd party" mod processing service "that's not connected to" the lender.

 

Solution:

When I heard of this tactic...it reminded me of the old movie western where the outlaw is finally captured...AND THEY SAID "Don't worry "KID".... you're gonna git a fair trial.....and then we are gonna hang ya....but you'll get 1^st class funeral!!!

 

These outside third party companies are just another tactic to delay or subvert a successful modification

 

Only send the mod package directly to the lender and make sure it goes to the correct department with all loan numbers on ALL pages (they tend to lose things).

 

Tactic 3

 

"You don't qualify"

(because of income OR RATIOS)

DUH! 

 

Solution

 

The entire HAMP plan is based on a borrower's household income vs. their 1^st TD house payment.

 

If you read the Treasury Dept Guidelines... ...Nothing else is relevant.

 

The new payment (1^st TD) will be 31% of the borrower's gross monthly (household) income.

 

If the home owner has been declined for a loan mod....they have the right to resubmit the file based on more accurate or recent financial data.

 

In order to compare the accuracy of the lender's calculations to the "home owner calculations" contained on the application ....we need to all be reading "from the same rules book".

 

The best solution enlist the help of an experienced loan officer to use their software (usually "Calyx or "Encompass") to prepare portions of the mod package that illustrates income and ratios.

( I can refer one to you, just ask)

 

Without a properly prepared income analysis ....the home owner is simply relying on the judgment of the lender's "intake clerk" to properly calculate income and debt ratios for the package. Not a good choice!!!!

 

Tactic 4

 

Many lenders are refusing to issue written "declinations" for pending mod applications.

 

Solution

 

Become the "squeaky wheel"

 

This is the one of the rare times an attorney may be of real help to borrower. All lenders are very sensitive to claims of "redlining" discrimination predatory lending etc. 

 

If you think that there is even the slightest possibility you are a victim of one of these practices...start writing HUD, your Congressman, your Senator etc.

 

 

Tactic #5

The home owner is told they must FIRST apply for a "refinance" and... the "application fee" is $400-$500 dollars...before the can apply for a mod".

 

Obviously this is a big deterrent to the home owner. 

 

Of course the home owner doesn't qualify for a refi... (ie. "negative equity" low credit scores etc....so its just a way for the lender to fleece the homeowner out of money they don't have and delay the mod process.

 

Solution

 

Apply on line at the lenders website...the lender then must issue an acceptance or denial of the credit application within thirty days.

 

Once a denial letter is sent to the borrower...it can be used to get around the lenders obstacles.

 

Tactic #6

The lender tells the home owner that they must use the lender's "in house specific application forms" and the package will be only sent out in 4-6 weeks

(if at all).

 

Solution:

Not true...the financial worksheet and hardship affidavit forms are generic and can be downloaded from government websites. Most times the forms are on the banks website for download too.

 

Simply submit the application regardless & keep a copy for your records with proof of submittal such as certified postal receipt/confirmation (cost 35 cents),

fed ex delivery confirmation etc.

 

All the mod documentation is standard:

* Last 2 paycheck stubs

* 2 years recent federal tax returns & W2 Statement or 1099 Forms

* Verification of other income: rental agreements, social security benefits, disability, pensions.      

* Recent asset / bank statement:

(all accounts, all pages)

* Most recent monthly mortgage coupons/ statements

* Signed Hardship affidavit

* Completed and signed worksheet

For additional information on Your Rights go to

www.HUD.gov

Read all about the

Home Affordable Modification Program

&

Home Affordable Financial Assistance

 

Please fill out the form on the short sale help page for help with your loan modification too!