Q: You’ve spent a lot of time in print and on the radio talking about loan modifications. I thought I had gotten my loan modified, only to find out last month that my “big box lender,” as you often call them, denied me after four months of their “trial period”.
My lender, after submitting paperwork, hardship letters, bank statements and tax returns four times, sent me a letter telling me I did not qualify for a permanent loan modification based on a bunch of variables supposedly set by the Federal Reserve Bank.
When I called the number they listed in the letter, the representative I spoke with told me that I was 1) Considered as delinquent since I was not paying the full monthly mortgage figure; and 2) Had extra late fees now attached to my mortgage.
I then received a letter from Freddie Mac confirming that I was delinquent, and that they were notified by the lender to that effect.
At this point, all I want to do is pay the amount I owe for those four months, less the add-on penalties and late fees, and refinance the house myself.
Unfortunately, I am sure they have trashed my otherwise perfect credit score (formerly in the 800s). I do believe my husband and I still have equity in the home despite the perpetual devaluation in the housing market. I think our home is probably worth somewhere between $450,000 and $500,000. Our loan is at $317,000.
What do you think I should do now? I wrote to the president of the company but now they say I have “been released” from their office. I would have to submit another letter for them to respond to me.
Please let me know what you would do next. I am so disgusted with this I could spit.
A: You should immediately file a complaint with the Office of the Comptroller of the Currency’s (OCC) HelpwithMyBank.gov website
In the complaint to the OCC, which regulates federally chartered banks, you should write that you’re in imminent danger of foreclosure. Filling this complaint is a last-ditch attempt to get the bank to pay attention to you.
When you file a complaint, you’ll receive a case number. Be sure to safeguard the case number because that’s what you’ll refer to when you call the OCC and your lender to follow up.
The complaint will take between 30 to 90 days to process, but I heard from someone on my MoneyWatch.com blog who was in loan modification hell since last October. But within 15 days of filing a complaint with the OCC, she received an offer for a permanent loan modification.
Read the complete blog post about her loan modification success here
By the way, you’re not alone on this path I’ve heard from dozens of readers that have had trouble getting loan modifications even when they submit all of the forms and documents. At times, the whole process seems to depend on getting the right person at the right time to pay attention to your loan modification application.
For others, the whole loan modification process appears to be an attempt by the banking industry to give homeowners the illusion of providing help while waiting for the housing market to recover. It almost seems as though the banks hope that homeowners will somehow manage to pay back the full amount owed, if they just string out the process long enough.