LOAN MODIFICATION foreclosed properties .
But anyone who has attempted a mortgage modification knows firsthand the frustration of submitting an application to the servicer .
Over and over , the servicer claims that you haven ’ t sent the documents , or the documents are stale or incomplete .
That inability to account for the modification application documents is , I ’ m afraid , just a sneak-peak at the next mortgage horror :
· Servicers have no records about the loans they did modify .
· Or , more precisely , the records they have are not to be trusted .
Rotten Record Keeping
The casualness with which servicers approached modifications has scared me for some time .
· modification agreements were poorly drafted
· borrowers never got copies signed by the lender
· changes in terms not part of public record
The quality of the customer interface at the servicer was laughable , if it wasn ’ t frightening .
The problems are compounded when the servicing on loans changes hands .
The new servicer starts with the ending balances from the prior servicer . Few records other than an electronic data base change hands . Any mistakes made by the prior servicer are now impenetrable .
The terms , or maybe even the enforceability of the modification itself , are lost in the mists of time .
Practice Self Defense
Who knew that homeownership was going to be a contact sport ?
But your clients have to assume , if they got a loan modification , it will be up to them to defend the modification when the time comes to pay it off .
Here ’ s the homeowner ’ s two step :
1 . Keep good records- find and preserve the loan modification agreement . Treat it as being just as important as the deed to the home .
2 . Request mortgage accounting each year - make an annual request for the state of your loan , and preserve the response
The goal is to have your own records supporting the terms of the loan modification and to catch any problems in accounting early .
May all the lender ’ s mistakes cut in your favor and may the Force be with you .
You ’ ll need all the help you can get .
Rediscover the lost art of human interaction .
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National Association of Consumer Bankruptcy Attorneys Fall 2016 CONSUMER BANKRUPTCY JOURNAL 33