Distressed homeowners can improve their chances of getting favorable loan modifications from their loan servicers by submitting relevant and complete documents and by knowing their rights as consumers and as borrowers, according to Diane Thompson, counsel to Boston-based nonprofit National Consumer Law Center.
Recently, Thompson testified before the U.S. Senate Committee on Banking, Housing and Urban Affairs on behalf of NCLC and the National Association of Consumer Advocates concerning the barriers faced by distressed homeowners in accessing the Hope for Homeowners Program and the Making Home Affordable Program to save their homes from foreclosure.
Thompson warned homeowners that they will encounter long waiting times on the phone and will most often not reach the same loan employee they have previously spoken with.
Loan modification applicants are advised to keep written records of all contacts with their loan servicers, including phone calls, emails, letters and other papers provided by the servicers.
Borrowers are also advised not to believe promises not put in writing. If the servicer promises to modify a loan, the borrower should ask the servicer to put it in writing. If a foreclosure sale notice has been given and then a promise not to proceed is later made, the borrower is advised to attend the scheduled foreclosure sale and ensure that the home in question is really not included in the sale.
Home loan borrowers are also advised to provide a written request to their loan servicers to give them a copy of their complete loan payment records. Borrowers need to examine the records for charges not clearly defined and then write letters of complaints or inquiries to the mortgage invoice address under Real Estate Settlement Procedure Act or RESPA requests. RESPA enumerates the responsibilities of loan servicers to their borrowers.
Borrowers applying for loan modifications should also make a written request to their loan servicers and ask them the name of the entity that holds their mortgage loans. This request will warn the loan servicer that the borrower is serious in pursuing a loan modification and will leave the servicer with no argument about the real ownership of the loan.
Lastly, according to Thompson, homeowners should contact nonprofit housing counselors or volunteer lawyers offering legal assistance for free if they feel their loan servicers are violating consumer rights or certain provisions of the federal foreclosure prevention program. They should not make deals with private mortgage modification companies that charge high upfront fees.
back to top
Comments on this entry are closed.