Homeowners fight for loan modifications from swamped mortgage servicers
By Pamela Yip
The Dallas Morning News (MCT)
DALLAS - After losing his job in January, Stuart Miller has fought hard to keep his home out of foreclosure.
At the end of May, the 55-year-old Plano, Texas, man began trying to get Wells Fargo & Co. to review his application for a loan modification.
After making repeated calls, he finally was told that the company would place a three-month moratorium on his mortgage payments.
"They're going to give me July, August and September, but I haven't paid June yet, " said Miller, a former trainer for a franchise company.
He's among many struggling homeowners who say their attempts to get a loan modification have been met with either long waits to get their case reviewed, no response at all or a runaround.
The Obama administration is leaning on mortgage servicers - the companies that collect and process mortgage payments - to step up modifications.
A report released last week by the Treasury Department showed wide variations in how quickly mortgage companies are helping troubled homeowners avoid foreclosures.
It also found the government's program is helping only a tiny fraction of struggling homeowners. As of July, only 9 percent of eligible borrowers had seen their mortgage payments reduced with modified loans, the report said.
"Much more progress is needed, " Treasury Secretary Timothy Geithner and Shaun Donovan, secretary for Housing and Urban Development, wrote in a letter to mortgage companies. "There appears to be substantial variation among servicers in performance and borrower experience, as well as inconsistent results in converting trial modification offers into actual trial modifications."
Mortgage servicers said they're committed to working out more loan modifications, but they're overwhelmed by the number of homeowners all wanting help at the same time.
"It's a new ballgame, " said John Dalton, president of the Financial Services Roundtable's Housing Policy Council. "The delay is the fact that we've got 3 million people today who are 60 days past due on their loans. These servicers have not been accustomed to and were not geared up to deal with that many incoming calls with people having difficulty."
The industry also is reinventing itself to add loan modifications to its traditional role as the collector and processor of mortgage payments, he said.
"Loan modifications are a relatively new thing, " Dalton said.
A loan modification is different from a traditional mortgage refinancing. When you refinance, you sign a new contract for a new loan. A loan modification involves changing the existing loan by lengthening its term or lowering the interest rate so that you can continue to afford your mortgage payment.
Homeowners may be eligible for a loan modification if they have a mortgage payment greater than 31 percent of their monthly gross income and can document that a financial hardship has made the payment unaffordable.
Miller, the Plano homeowner, hopes he will soon receive a confirmation letter from Wells Fargo with the details of his loan modification. He said the process he underwent to get to this point was frustrating.
"My frustration is the time that it takes, " Miller said. "They have control of my financial life, and I can't talk to a decision-maker. They literally get to say whether I get to live in my house or my life gets completely turned upside-down, and I am literally at their mercy."
Wells Fargo officials said they're reviewing his situation.
"While the majority of our customers who request help are getting through to us and receiving the help they need, we know we've fallen short of our customer service goals in some cases, " Mike Heid, co-president of Wells Fargo Home Mortgage, said this week. "We've recently undertaken new steps that will soon enable us to qualify most borrowers (for a modification)."
After I called a Wells Fargo spokesman for a response to Miller's situation, a company representative contacted him and told him that the financial institution would not report his delinquency to credit bureaus until his situation's resolved.
"I feel better now that I have a name of a person to talk to, " Miller said.
Bonnie Mathias of Dallas hopes for a similar outcome. She has applied for a loan modification with her servicer, CitiMortgage.
"It's been a nightmare, " said Mathias, a customer service representative at AT&T Advertising Solutions.
Her husband's company, which sold commercial exercise equipment, went out of business last September. He found another job, but his income is lower now.
Mathias applied for a loan modification in February.
"I'm having a difficult time getting my counselor from CitiMortgage to contact me, " said Mathias, a chapter leader at ACORN, the community organization that has been putting pressure on mortgage companies to help struggling homeowners. "This is my second counselor, and I have yet to talk to either one of them."
Mathias received a letter last month from a Citi representative saying she had been trying to reach Mathias.
"I have left four messages on her voice mail, " she said.
Despite the difficulty, Mathias doesn't plan to give up and advises others to do the same.
"Persistence absolutely is the key, " she said. "Do not give up."
When you apply, have at the ready the necessary documents, such as tax returns, pay stubs and a letter describing why your mortgage is unaffordable, and what caused your income to fall or expenses to rise. Not having the necessary documents will gum up the process of getting a loan modification.
And if anyone says you have to be behind on your mortgage payment to be eligible, don't believe them.
Homeowners are eligible if they are "at risk of imminent default."
Unfortunately, many responsible homeowners have been thrown into financial chaos by the sour economy and are now at risk of default.
They're making desperate, good-faith attempts to save their homes. It behooves mortgage servicers to move much faster to help those people.
RESOURCES FOR HOMEOWNERS
- www.makinghomeaffordable.gov - The Obama administration's program to help troubled homeowners avoid foreclosure.
- www.hopenow.com - A group of counselors, mortgage companies, investors and other mortgage market participants formed to help distressed homeowners. Call toll-free 1-888-995-4673 to reach credit counselors to who can help you with options.
- ACORN Housing - Call 214-823-4580 to find a housing counselor for free help.
SOURCE: Dallas Morning News research
(c) 2009, The Dallas Morning News.
Distributed by McClatchy-Tribune Information Services.
Loan Modificaiton Fraud - SCAM - ATTORNEY GENERAL
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Madison Heights, Michigan
Best Loan Modification Companies - How to Stop Foreclosure
Countrywide consumers have many question right now concerning Loan Modification Companies and the legitimacy of loan modification programs. However, it has been proven that Loan Modifications are a reality and that it is possible to stop foreclosure proceedings through them.
According to Hector Milla editor of the “Best Loan Modification Companies” website -- www.BestLoanModificationCompanies.com -- through a loan mod those facing a foreclose proceeding are able to;
“… lower their payments, secondly they can get a lower interest rate and they can lower their overall principal, finally they are able to stop foreclosure immediately once they get the loan modified …
But that is not all, the value of homes has decreased and it is very likely that the value of houses close to be foreclosed has been decreased too, then it is possible to save in taxes, a visit to the county tax assessor is highly suggested, see the home values in the area and get information about the way to lower taxes based on the decrease. It is very likely that, if a reduction in taxes is granted that value will be maintained for some time.
H. Milla added “several people are trying to get their loan modified by themselves, that it is not recommendable if you don’t have some type of real estate background, the paper work can be tricky sometimes, trying to save some money can produce devastating effects in the future by misinterpreting the paperwork involved. The best and smart move is research in order to find a reputable company to handle your loan modification…”
The number of people desperate to save their homes is enormous nowadays, so lenders are more than willing to help borrowers to resolve foreclosure problems, those that do not know how to stop foreclosure should get --once again-- help from one of the best debt consolidation companies in the market. A home is a dream, use all possible alternatives to keep that dream alive.
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5 ways to stop foreclosure: How loan modification works
The housing market is showing signs of recovering, but a lot of homeowners are still looking for solutions to devalued homes, or adjustable rate mortgages.
If you are in trouble with your home, and think you have exhausted all your options, there still may be hope.
According to Dawn Aguilar, owner and founder of The Foreclosure Group, there are new programs coming into play all the time.
Aguilar created The Foreclosure Group in March of 2008, out of necessity.
"As a Senior Loan Specialist for many years, I began getting calls from so many former clients asking me to help them with their loan modifications, " said Aguilar. "When the economic downturn began and the bottom fell out of the mortgage industry, I quickly understood that most homeowners have no idea how to get their loans modified. My business focus came about out of need, out of understanding and, most of all, out of the desire to help homeowners in a compassionate manner stay in the homes that they love."
While each situation is different, and there is no one solution that works for everyone, here are some of Aguilar’s tips to dealing with a troubling housing situation.
Five ways to stop foreclosure:
1. Loan modification (Fannie Mae, Freddie Mac, traditional)
2. Short sale: If your home is worth less than the amount you owe, Aguilar suggests you find out if the lender will cooperate on the short sale. Aguilar says this will affect your credit, but not as badly as foreclosure.
3. Deed-in lieu of foreclosure: Aguilar says this is when you deed the house back to the lender. This process will affect credit the same as a foreclosure.
4. Repayment plan (forbearance): This is where the lender will make arrangements to pay back missed payments before taking legal action.
5. Sell your home
Six criteria for loan modification:
1. Job loss/unexpected unemployment
2. Sudden illness or medical emergency
3. Divorce/loss of second income
4. Job demotion or promotion denials
5. Inability to pay an adjustable interest rate/with no option to refinance
6. Excessive debt obligations
Five things to watch out for when hiring a loan modification company
1. Guarantees, there are NO guarantees ever. Aguilar says beware of a loan modification officer who guarantees they can get you a home loan modification
2. Offer to buy your house for cash at a price that is below market.
3. Someone who tells you to make your house mortgage payment directly to them
4. Advising you to transfer your property deed or title.
5. Makes a plan to pay your mortgage and then they will lease it back to you.
There are also banks and brokers that defrauded loan customers. Have option arm loans audited for TILA or Truth In Lending Violations. These are consumer protection laws enacted by congress to protect consumers from preditory lenders!!!
The courts are playing ball up till now with the banks but that will soon change as the public becomes more and more educated about tthe mechanics of banking preditory schemes that were being sold rampantly to loan customers in the last ten years.