This is a continuation of my post from September 19, 2015 entitled What Is A Home Loan Modification.
Applying for a home loan modification can be a grueling process. I have seen the process go on for 12-18 months, often ending in a denial and, unfortunately, many times I see a home reach the point of foreclosure during the modification process. Dealing directly with you mortgage company is the best place to start the process. You should be wary of foreclosure rescue scams or companies who may contact you to “assist” with your modification. This can drag the process out and there is usually nothing these folks can do that you can’t do yourself.
The process begins with an initial application that will be provided to you by your mortgage company or may even be available on your mortgage company’s website. In most instances, you are required to submit the application with additional financial documentation such as paycheck stubs, tax returns, utility bills and more and you may be asked to update this documentation on a monthly basis while your modification request is pending. As mentioned in my previous post, diligence, along with consistency, is the key to successfully obtaining a home loan modification. It is best to communicate in writing so that you have a record of who you talked to and what was requested of you. It is important to save all documentation. In most cases, the mortgage company will transfer your modification request to several caseworkers and you may be required to submit new information each time this happens. Again, that is why I stress that written communication and strict documentation of all correspondence is key to obtaining a successful modification.
Re-submitting information draws the process out longer and all the while you may be getting further and further behind on your mortgage payments. Once you get so far behind while awaiting approval of your modification, your mortgage may be transferred into the foreclosure department. At this point, the foreclosure process is running a parallel pathway with your modification. This can become problematic and expensive for a mortgagor as the mortgage company will add additional fees to your mortgage for costs associated with the foreclosure process. Not to mention it can also be scary and leaving you feeling uneasy and uncertain about the process.
If you have reached the point in your modification process where you receive a notice of foreclosure, my strong advice is to act immediately as time is now of great importance. You must either get your modification approved to stop the foreclosure sale, of which I recommend getting documentation in writing that it has been stopped, or take alternative action to stop the foreclosure sale.
Short of paying the mortgage arrearage current, a great alternative option is to contact a bankruptcy attorney and discuss filing a chapter 13 bankruptcy to stop the foreclosure. It is imperative that you contact an attorney in a timely manner as action must be taken before a foreclosure sale date takes place.
If you reach this point in the process, believe it or not, modification is not lost by filing a chapter 13. Although you may have spend many hours fighting for a modification that was previously denied, many times I see my clients have greater success at obtaining a loan modification after they have filed a chapter 13 to stop a foreclosure.
If you are struggling with your mortgage and feel like you are getting the “run-around” from your mortgage company it may be time to get help. Contact our office nearest you and schedule a free consultation to discuss your financial situation.
Amy K Tanner is a shareholder in several of the Bond & Botes Law Offices. She holds a Bachelor of Science from Auburn University at Montgomery, and a Juris Doctorate from Thomas Goode Jones School of Law. She focuses primarily on consumer bankruptcy law in the Huntsville and Decatur offices.Read her full bio here.