A Loan Modification Approval Does Not End the Process

[dropcap]C[/dropcap]ongratulations, you received a loan modification from your lender and you are now on your way to saving home.  Or are you?  Even when you receive an approval, the banks still have another trick up their sleeve.  When you receive the loan modfication, it is only a temporary modification.  In order for it to become permanent, the borrower must satisfy certain conditions.  Many times the lender will make it difficult to complete these conditions,  If the homeowner cannot comply with these conditions, the loan modification will be not go permanent and be denied.

Typically, there are two important conditions that the bank will make difficult to satisfy.  The first is the payment condition.  Normally, in order to have a modification become permanent, the borrower will have to make three on time payments.  The lender will use two tricks to make it difficult to accomplish.  The first way is to claim that they never received the payment.  The bank will give erroneous information about where to send the payment.  The borrower will go through an obstacle course to figure out what happened, find out why the bank is claiming it did not receive the payment and how to correct this situation.  Secondly, the bank will claim the the payment amount is incorrect despite what the modification agreement says.  Again, the borrower will have to go through a maddeningly  complex maze to figure out what went wrong.  Of course the borrower will never speak to the same customer service representative twice.

The second trick the banks uses involves paperwork.  The bank usually requires the borrower to fill out new paperwork and forms to receive this new loan modification.  The bank plays the familiar game of losing paperwork or claiming that it never received the paperwork.  The borrower keeps sending back the same forms over and over.  Eventually the banks will deny the permanent loan modification because of the failure to comply with the bank’s request to fill out the paperwork.

This scenario happens quite often.  That is why it is necessary to have an attorney deal with the banks.  Not only it is important to have a lawyer to successfully apply for a loan modification, but also to make sure the modification goes permanent.  It would be a shame to spend all the time and effort to obtain a a loan modification only to lose it because the bank continues to play games after the process has ended.


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