Wachovia / Loan Modification
I had to apply three times in order for someone in Wachovia's underwriting department to finally APPROVE my application on a property that was / is an investment property.
Wachovia was way understaffed in both their loss mitigation department and their underwriting department. Since August of 2009 when I started this whole process I found the following to be true of Wachovia;
1) They are understaffed in the all the departments which handle their loan modicifiations
2) The rules surrounding loan mods change daily and even on the hour so customer service representatives in their loss mitigation area do not speak with one voice and often one person will tell you one thing, the next hour tell you something totally different. As a result, as a banking institution they loose all credibility. They lack the foresight to properly train their representatives to answer questions correctly the first time. Wachovia also needs to streamline the process, have better software and tracking of loans in process, and also assign one UNDERWRITER per file, not a room and people who pick up files randomly and supposedly work the file. In this process one day I had and UNDERWRITER pick up my file, bounce it back and said I need to update my P+L statement. The very next day after I spent 3 hours fulfilling the request and faxing it in, another UNDERWRITER - totally different person (I verified this) said my file was fine and no update was needed.
How ridiculous is that. It would be like seeing a different dentist every few months and wasting time having someone become reaquainted with your teeth every time you see the dentist.
Yet this is concerning a expensive property that you want help retaining.
3) One of their representatives told me AFTER I was approved Feb. 2010 that only 5 percent of all the people who apply for a loan modification get approved. Pretty bleak odds I would say.
4) If your going to apply with a loan modification with any bank, load all your documents on a computer in the form form of a PDF file and use an online service such as efax...this way when someone tells you in customer service - "oh we never got your fax" - you simply keep sending what they need - relentlessly.
5) The reason why UNDERWRITERS will ask for ridiculous items in paper work is because often times, behind the scenes issues like an in house appraisal or requesting copies of your previous tax returns from the IRS take a long time to complete and get in your file...so if they are falling behind in obtaining these issues...they will start asking for crazy items to be faxed, like a letter from your employer as to when you started your job, if your belly button is an innie or an outie, important issues like this.
6) You have to hold UNDERWRITERS feet to the fire and actually at the start of your application, FAX them way more than they ask for - that what this greatly diminishes them asking for more later on. If you get a new pay stub along the time line of doing this process, fax it in everytime, if your bank generates a new bank statement fax it in.
7) One of the most disconcerting things is at least a Wachovia,
on loans that are being modified outside the government program called HEMP, as MAP program which is modeled after the government program, are given a 70 day time clock where even IF all you paper work has been faxed in and scanned into your file, the computer is governed to automatically kick you out of the system, they use the word EXPIRED...which means to NO FAULT OF YOUR OWN, you have to start the whole process all over again. In my case, since I had to apply all over again, which in my case, being self employed, I have to REFAX OVER 400 DOCUMENTS THREE TIMES FOR THREE APPLICATIONS...this is absolutely ridiculous.
8) This point is the MOST IMPORTANT of them all.
When you do your initial financial interview over the phone where the put all your expenses on your file all your income, you never get to see a copy of this - even though there could and usually are some human input errors. In my case, the second application, the customer service representative typed in that per month I paid $1, 600 per month for a property management company to manage my rentals - WHEN THE CORRECT FIGURE I GAVE THEM WAS $198 - just that wrong amount alone got me turned down because my debt ratio was totally off. I had no idea this error was there until during my third and final interview, a customer service represent compared the figures and brought it to my attention. How you respond and the figures you give in the initial interview are CRUCIAL - and can and will make all the difference as to whether your file will be DENIED OR APPROVED...Make the representative read back you line by line ever item before you close your interview.
9) Lastly, and this is kicker of all, when I was approved, no where on the entire two page offer (approval) does WACHOVIA bother to mention that because my offer involved about $50, 000 debt reduction, reducing my principal balance substantially, that they will send me and the IRS a 1099-C
form, making me liable to pay taxes on that amount.
How they can get away without fully disclosing this is beyond me. I happy to be a detail person and love protect myself, so I did my own homework on this issue. Only if the loan modification involves your primary residence, you might can be 'excused' from this 1099-C making you financially responsible for taxes on this amount and even kicking you potentially into a much higher tax bracket than you normally would have been.
If some of these details empowers you to not give up on your own pursuits of a loan modification, it would make me really happy to have extended some helpful advice.
Since August 2009, I called Wachovia at least 2 times a day to finally get this approved in 2010.
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