Q: For a brief moment in August 2009, my business just all but stopped. I’m an accountant and my clients had trouble paying their bills. I asked my lender for a loan modification. They said everything was great except I didn’t send a copy of my Social Security letter, which they never asked for it. So, my loan modification was denied.

After calling them, the lender reopened my loan modification petition, and made me jump through hoops forever. I was within three days of getting the modification, when I called on a Thursday to verify they had everything. They did.

Later when I called, they said I had been declined. When I asked why, they told me it’s because I didn’t send in my Social Security letter.

So I simply said, “Fine, sounds like a good court case to me, I’ll see you in court”. And I hung up. Two weeks ago a representative of the lender called and told me that they had started foreclosure proceedings.

I’m just waiting for the court date because I have all my documentation from every day I tried to contact them and proof that they received all of the documentation. Shortly after I got this call, one of the big banks took over my lender. I now receive notices from the big bank and my lender, but I don’t respond to anything. I just keep the paperwork in my file.

Why would I go to these people when I was refused twice for something stupid? They don’t want to help and I am not wasting my time! I paid the modified payments on time, and I did everything they said, but to no avail.

In the meantime, I am waiting for the court date. I am waiting to see if they will give me the loan I qualified for and my payments should be $257 month. Then I will be happy and pay on time just like I have done for 11 years!

A: I’m not sure you’re going to win the game with the hand you have and the way you have decided to play. You need to know that just because you applied for the loan modification and you may have otherwise qualified for the loan modification; your lender may not have had a legal obligation to give you the modification.

If the lender had no legal obligation to give you the loan modification and you have stopped making payments, the lender has the right to proceed and foreclose on the home.

When you get to the foreclosure hearing, the judge in that hearing may only need or want to focus on the issue of whether the lender proceeding in foreclosure properly and if the lender’s documentation is in order. The judge may ignore or not even want to look at your documentation relating to the loan modification.

What you may need to do is work to stop the foreclosure. You can go to your county courthouse and see if someone there will help you or guide you as to whether the documentation the lender has filed in your case has been done correctly. For many people that have contested their foreclosure proceedings, these people have been guided by an attorney and you may need one at this point.

In the meantime, you should also file a complaint with the Office of Comptroller of the Currency (OCC) which regulates the mega-banks. They have someone in their office that works with your particular lender and will push the cash from their end to make sure you’re getting a fair hearing. You can file the complaint at HelpWithMyBank.gov.

In general, if you’re not getting anywhere with your lender on a loan modification, there are some things you can do to get the lender’s attention

  • File suit in small claims court or regular court;
  • File a complaint with the OCC at their HelpWithMyBank.gov website;
  • Call your state banking regulator and file a complaint (or work with their ombudsman to get in touch with the lender, since all mortgage lenders must be licensed in the current state);
  • Go into a branch office and sit down with the branch vice president and see if you can get some assistance there;
  • Call the corporate offices for the bank and ask to speak to the senior vice president or chief of operations (even the COO’s secretary can probably assist you). You may want to follow up with a letter to that person with any documentation and details you may have.
  • Talk to an attorney about your case in case you need his or her services to protect your home from foreclosure.

Of these options, I think filing suit in small claims court or finding a way to stop the foreclosure proceedings will certainly attract the most attention. But my sense is that each of these avenues should be pursued in tandem because I simply don’t know which will work the best. At times a letter to the senior management of a big bank works pretty well and you can try that while looking into your other options.