The company i work for, currently, after you fax in your paperwork like 10 times, you will get a loan modification in about 6 months...

Yeah...but I'm not sure it can be attributed to "poor service". The pattern of losing important papers, sending people to the wrong department, promising then failing to mail things...it seems way too much to be accidental.

Then there's this, which explains why banks-who-are-also-mortgage-servicers may have a financial stake in not doing modifications:

[www.nytimes.com]

We just lost our home because the lender REFUSED to modify our loan. Our only option given was go through a mediary chosen and hired by the lender who charges $750 for their "services" and you're then bound by contract to accept whatever modification they offer.

So be it going up or down, you have to accept their "negotiated" offer.

The banks are refusing to process these, yet refuse to maintain/repair/list the properties. I guess they're waiting for the market to come back and unload them at a profit after claiming the loss now.

Wait.
So if I want to save my house, I have to go BACK to the goons that put me in this crappy position to start with, and hope they don't f*ck me over again?!

Yeah, I'm screwed.

@cash_da_pibble:

"Goons" put you in this position? hmmm...last time I checked, the borrower agreed to the terms.

@cash_da_pibble: There are several ways to speed the process up that i have seen. Just do your research before hand, and it shouldnt be to much of a problem.

@KingPsyz here for HappyFunKingPsyz©: To be accurate, you lost your home because you didn't make payments. And it was never the banks duty to maintain, repair, or list your home. If that is what you were looking for you should have never bought in the first place.

Shortly after I bought my home my loan was sold to countrywide, which then became BoA. I bought in 2007, right before everyone started saying "subprime crisis" and housing values began plumetting.

So, anyway, I'm a BoA customer now. We recently tried to refinance with BoA through the refinancing program (where you can refinance with less than 20% equity due to falling home values).

Turns out, BoA's independent appraisal of our home is way low, too low to refi even with that program, compared to other houses on my street that have sold in the past few months. We live in a townhouse, so the other houses should be fairly similarly priced.

BoA's appraisal was way low, and there's no way to appeal. Basically, they made it impossible to refi through them. So this isn't surprising to me.

The way I figure it, BoA has no real incentive to want to refi my loan, since I've always paid it on time, they already own the loan, and they'd therefore lose some money in the process. I guess I can hopefully have better luck trying with some other company.

Our friends' subprime reset and they were not going to be able to afford the payment. They called BofA and within an hour and some faxes, had their payments frozen at their current rate, and their loan was converted to a 30 year fixed. I was impressed to say the least.

Wow, I guess I feel fortunate that ours worked out OK. GMAC did a loan mod for me; for the next 5 years my monthly payment is HALF of what it was for my Fannie Mae-backed mortgage. HomEq Servicing did roughly the same for my fiance's non-Fannie/Freddie loan. Both were "hardship situations" due to our hours being cut. We supplied all necessary documents and always sent them via an overnight service with proof of delivery (thanks to me reading so often about "lost" documents and such.)

For the first few months of these programs the payments must be there BY THE 1st (no 15-day grace period), sent directly to the Loan Mod section (no online paying). GMAC accepts personal checks; HomEq requires a cashier's check. These are sent proof of delivery as well of course.

After about 4 months of this it'll switch to being able to pay online again and having a 15-day grace period. I guess it takes that long for everything to go through. The Loan Mod people have also told us to ignore any late payment notices we may receive (and we have gotten a couple) because it takes the loan mod info a while to catch up to your account.

I'm in somewhat the same position as Shadowman. I am actually in the midst of the modification process which I begun back in March. BofA was being so unresponsive, and none of their CSRs even knew any details on the Making Home Affordable plan or when it would go into action that I actually wrote a letter to my congressman for help. He stepped in and managed to escalate it to someone in the Executive Office of BofA, and I managed to wrangle a 2-month forbearance out of them for my July and August payments (that I was notified of on July 31st, thanks), but now we're at another standstill while they review the loan to see if I deserve further modification. I actually had a BofA CSR tell me that they wouldn't bother talking to me until I didn't make my payments 2 months in a row.

This program, when shown against the backdrop of people going into foreclosure and essentially living in their homes for 8-12 months until the banks finally get around to kicking them out - incents nobody to repay their mortgages. Period.

I'm continuing to dance the dance with Wells Fargo. I'll be giving them the same info I given them twice in the last 6 months. That would be my income and expenses. I once was resigned to leaving my home but I would really like to stay. However, since my loan is not quite a year old, Wells' software won't allow a loan mod. What ever happened to common sense?

@Mary Marsala with Fries:Thank you for mentioning this early on. This has been my marching argument from when the whole mortgage industry started to collapse like a supernova creating its own black hole...

From the NYT story:
"Instead, it is that many mortgage companies are reluctant to give strapped homeowners a break because the companies collect lucrative fees on delinquent loans."

@organicgardener: "The Loan Mod people have also told us to ignore any late payment notices we may receive"

I hope you got that in writing or recorded the person telling you that...

@cash_da_pibble:

Yeah, it must have been awful when those guys from Citibank held a gun to your head and forced you to borrow all that money to buy the house.

@econobiker: That made me nervous as well, I hope we don't read about you here in a couple of months! I'd get in contact with whoever is sending the late notices (your original bank?) and make sure all parties are on the same page and as econobiker mentioned try to get it all in writing. Hopefully we're just jaded and paranoid.

@Shadowman615: My brother had CW and BOA took less than a month to approve his modification. It is on a 3 month trial.

I think it was easy for him because he had some equity and his loan initially was a 15 year. This mean I think they are just extending his term. They didn't specify what they were going to modify, and won't until the end of the trial.

@NeverLetMeDown:
The issues behind first-time buyers looking for a home to invest in purchasing a less-than stellar house in an over-inflated market right before a housing bubble do not stem from a national conglomerate, but rather greed from people we trusted and names we now curse.

They knew what they were doing...

Now I am being told to go back to these people for help?
I don't want to see their faces for as long as I live.

Maybe it is anger clouding my rational mind, but everyone makes mistakes, yes?
It just happened that our mistake was compounded by a team of yes-men.

@HIV 2 Elway: Wow! Seeing a person's entire history from a single post like that, you must be psychic!

I believe the poster was referring to certain banks' refusal to maintain/repair/list home on which they have already foreclosed (and therefore now own.) So, you know, take a breath before hitting that 'send' button next time.

@TinkishDelight: Yes, all parties are on the same page. When I call they are aware of the loan mod in process, but they can't stop the automatic notices generated in the meantime. I know, it's stupid! My last "late notice" from GMAC included a packet of loan mod papers as "perhaps a loan modification might be necessary to avoid foreclosure." They were the exact same documents I'd filled out at the beginning! So the right hand doesn't know what the left is doing in real time, but it should catch up within the 3-4 month time frame.

We tried to refinance under the MHA plan for people who had a good payment history. We have never missed a payment and can afford our mortgage and we would have gone down 1% APR, and gone from a 30 year to a 20 year loan for about the same payment. Unfortunately our loan was backed by Freddie Mac so we had to go through our current servicer, BofA/Countrywide. I called and called and the people I talked to were trying to scam me, just like the old Countrywide. It took 2 months and an email to Ken Lewis' office before I finally talked to someone qualified to talk to me about it.

The refi was never approved because our credit union wouldn't subordinate our home equity loan to the new 1st mortgage, even though the new 1st would make us better credit risks.

@TinkishDelight: And both loan modifications are with the Loss Mitigation Dept. of the original mortgagers - not some service company - so we know everything's legit.

I think what helped is that working in an office where I do a lot of document-package assembling, mailing, etc., I presented neat, professional-looking doc packages that were done right the first time & probably easier to sort through than I would imagine some of them are. (Just trying to make it as simple as possible for them!)

@cash_da_pibble: They really didn't know what they were doing. They lost billions- and really lost the whole business.

EVERYONE made mistakes.

@runchadrun: I would be real pissed at the CU! Is there any logical reason for that at all? I don't think so(but I could be wrong). Seems they hurt their chances of getting full payment.

@Mary Marsala with Fries: EXACTLY!

@Mary Marsala with Fries: Of course. The govt. needs to give the banks some motivation to do these modifications. Or some pain if they don't.

I really think the solution might be a drastic change in how homes are built, paid for and resold. Homes are crazy expensive because developers are making (or were) a huge profit on each one. If we developed more non-profit, coop or barn raising type efforts to build affordable housing rather than building what has the biggest profit margin for a developer we would be better off.

@KingPsyz here for HappyFunKingPsyz©: Our bank told us our loan can not be modified. I think they are lying but even the loan guarantor has no clue.

Don't get me started on the vacant house in the neighborhood that has been that way and not listed for sale for two years.

@cash_da_pibble: I saw the blatant lying and knew it was such by certain people when we were looking to buy a house.

Many real estate agents who knew some mortgage broker who was selling liar loans, interest only ARM loans and such swill were pushing them hard. They would hard sell people that you just didn't understand the financial savvy of this loan product or you would be jumping all over it. I would walk and tell them to f-off. People who were new to the process didn't have the knowledge of how loans should work and could fall for it.

It is so irritating to call these places. I work for a bankruptcy attorney and have called different mortgage lenders on behalf of clients. One, Sun Trust, couldn't seem to coordinate their systems to keep track of paperwork I sent in. I'd call and speak to someone who would verify to me the client's release of information was on file and then they would transfer me to the next department and that person would tell me it wasn't on file, so I'd re-fax it. This happened twice before they all had the paperwork.

@socomo65: Many companies require your loan to be "seasoned" before being able to offer you a modification. I should know, I do mods for a living.

The length of "seasoning" is generally about 12 months. The new MHA guidelines really only affect borrowers who received a loan since Jan 1st '09. If that's the case, well... you're probably out of luck.

We have always been on time with our GMAC Mortgage. Husband was laid off in May. Called GMAC and they told me about the modification program on my 1st call & sent out the paperwork to me. We sent all required paperwork in and in less than a week we were approved for the trial modification. We need to make 5 trial payments and then our loan will be modified (I'm guessing the trial payments are to give GMAC time to modify). The process was very quick and seemed to run very smoothly. Everyone I spoke to was aware of the modification program. I was told the program is to help homeowners BEFORE they default.

Thanks to this program and GMAC we will be able to stay in our house.

@ArcanaJ: @bohemian: I see you guys have obtained the super powers of common sense and reading comprehension unlike our friend who wishes a deadly disease on John Elway.

For you @HIV 2 Elway: I suggest the book 'Reading Comprehension, the Internet, and You!' By Ghetta Klue.

But if you must have my life story spelled out for you here you go. We had a fixed roate loan, which unbeknownst to my Mother in law was switched to an ARM loan when she had to refinance to save her daughter's home from foreclosure.

We were advised by a lawyer to stop making payments so we could qualify for the mortgage modification plan from the government. Because the lender refused to adjust our loan. His "advice" was ill advised indeed, because now we were going to loose the home and the banks were ignoring the mandate. Now she has lost over a hundred thousand dollars in down payment, monthly payments, and improvements to the home, but thanks for your understanding. I'll let her know next time she's feeling good that some random on the internet thinks she had it coming including the resulting bankruptsy...

As was already noted my comment about upkeep, repairs, and listing is in refrence to once the banks have taken ownership of the homes they refused to negotiate on. We also did try and sell the home to avoid this and the market drop off coupled with the lender not accepting short sale offers made it moot.

@socomo65: It wouldn't matter however. Both me and my mother use wells for our homes. Both requested we send them information ASAP, then we wouldn't hear anything for months. Eventually they offered me 3 months no payments (I didn't need time, I needed a modification) and told my mother they literally wouldn't even talk to her about it for her home.

You have to realize these guys are the same a-holes who got us in this mess, so I would expect having them fix it would go this poorly.

It is down right maddening. I have b been trying since the MHA plan was launched to get Wells Fargo to work with me (our loan is current and and backed by Fre/fanny). After sending in paper work multiple times (and them loosing it) we finally get some documents from them, we send those in, they loose them, we send them again. They finally have them and promise to get back to us in mmm 90-120 days. No escalation, no process for dealing with folks who have already been trying to get a modification for 90-120 days, zip.
Eventually they sent us paper work requesting all kinds of info from the original loan documents (WTF, your my bank should you now have these things), including some thing like the original listing agent agreement which we of course did not have. So we sent everything we could a and letter for items that we had no reason to have ever had... that was over a month ago I'm actual scared to call them to find out the status, I think they might just be trying to give me a heart attack to close out the deal.
Seriously though, Wells Fargo seems to be playing some bizarre waiting/resource game to cause people to fail, the time lines are completely nutty when folks are in trouble the requirement for MHA is that the loan stays current. Combine that with reports of many banks making more off of foreclosure's then keeping people current and the mind boggles.

What upsets me the most is that banks like Wells Fargo where given tax payer money with the requirement that programs like MHA would be supported, but the folks who gave them these insane money grants did not have the foresight to specify any kind of reasonable performance requirements... so of course they screwing everybody over. In my book this makes the politicians to blame as much as the banks.

You know how long it takes to do a modification. Five minutes and a fax machine. Sign the new term sheet, fax it back tier one pencil pusher puts in the numbers. Everything else is fluff.