Q: I like your advice, and you seem to have a lot of it regarding the current loan modification program. I have applied for a loan modification, but I’m in the waiting period.
However, since mortgage servicers receive $1,000 for every loan modification request they put in, does it really make sense for them to process the request and then sell the loan to someone else?
It would be really shady for this to be happening, but I’m starting to think that is the current game. Is this what’s going on?
A: A senior official from the Treasury Department. tells me that lenders do not receive $1,000 just for requesting a loan modification or submitting an application. I’m not sure where this rumor started, but it is certainly making the rounds.
But I do know that you can’t just wait for your loan modification to be approved. You have to aggressively stay on top of the situation by calling your lender every couple of days to make sure all of the information is together and to make sure the lender doesn’t need any additional information.
According to Obama Administration officials, roughly one-third of borrowers have not provided lenders with the paperwork needed to make their trial loan modifications permanent.
If my mail is correct, it isn’t only that borrowers aren’t sending in the documents, but that loan servicers are losing documents and not requesting all of the documents needed at the same time.
If you want your loan modification application to get higher priority, you’ll need to send the CEO or president of your loan servicer a letter detailing the runaround you’ve been given. Send the letter by overnight mail to the company’s corporate headquarters and be sure to copy the Office of the Comptroller of the Currency (OCC) and the Treasury Department.