Tired of the Mortgage Modification Run Around? You Have Rights! Attorney Michael Primus realizes the mortgage modification process scary and frustrating. In fact, a person may file chapter 13 bankruptcy in Contra Costa County to stop a foreclosure even though he or she is in the middle of a loan modification. It’s not uncommon for a person in the middle of a loan modification to be told very different things from one day to the next by their mortgage lender. For example, one representative may say “don’t worry we’re not going to foreclose because you’re in a modification” and the next day another representative will say “We didn’t receive your application and so your loan was placed in foreclosure.” Often, the foreclosure process is initiated while a modification is pending. This is called dual tracking and refers to the practice of running the foreclosure process at the same time as the loan modification process. Note: foreclosure is the legal process used by a mortgage lender to take your home if your payments are delinquent.
We were told that the National Mortgage Settlement would help people keep their homes. Part of the National Settlement was to eliminate dual tracking so that people maximize their opportunity to save their home from foreclosure through the modification process. The National Mortgage Settlement states that the “Big Five” will cease all dual tracking as of October 3, 2012. So who are the “Big Five” you ask? Chase, Citifinancial, Wells Fargo, Bank of America and Ally/GMAC. This is supposed to mean that while an active loan modification is taking place the mortgage company cannot proceed with foreclosure. Sounds great, right? Of course who would violate the National Mortgage Settlement and take a chance of making the Attorney General mad? Good questions but apparently what seems to be clear cut may not be so clear.
I am still seeing mortgage companies claiming that modification paperwork was incomplete when received or never received at all. This despite homeowners repeatly faxing, mailing and even Fed Ex-ing modification applications. What does this mean? This means that the mortgage company can claim that there is no active loan modification and game over. The mortgage company will then be entitled to pursue the foreclosure without violating the National Mortgage Settlement. So is all hope lost? No.
If you are attempting a loan modification, keep a record of your activities. The date you sent documentation, a list of the documentation sent and the address or fax of where you sent the documentation. Keep a record of the calls, who you spoke with, the phone number, date and time as well as the conversation details. If you get the run around or are accused of not sending the documentation you should file a complaint with the monitor of the National Mortgage Settlement.
What if your loan is not with one of the Big Five? Consider your rights under the California Homeowners Bill of Rights which became effective January 1, 2013.
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Law Office of Michael Primus