Friday, November 20, 2009

Why is my loan modification taking so long?

Just a year ago, lenders processed loan modifications quickly, sometimes in as little as a month. In the last few months, the picture has changed drastically. Banks are understaffed and disorganized, losing borrower information and failing to communicate effectively with the very borrowers they are foreclosing on. "The judges are seeking more and more a pattern of indifference to record-keeping and good business practices," said Robert Lawless, a law professor at the University of Illinois who specializes in bankruptcy law.

Some common examples of lender irresponsibility include (1) Routine loss of borrower financial information that has been submitted for loan modification (in some cases up to three times); (2) Lenders purposely disconnecting phone lines are putting a caller on hold for a long time; and (3) Multiple representatives from the same lender giving the borrower conflicting information. Even HUD-approved housing counselors face the same stonewalling tactics used on homeowners. Depending on who they [housing counselors] talk to, and the level of seniority and the level of training and the different servicers (they deal with), they get completely different outcomes," said Helene Raynaud, an executive at the National Foundation for Credit Counseling.

No comments:

Post a Comment