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'Paper Avalanche' Delays and Denies Loan Modifications to Struggling Homeowners

July 3, 2009

The New York Times ran an article June 28 with a twist on the same sad story about absurd bureaucratic delays for loan modifications: It told its story by following a Los Angeles loan modification company's employees. Just like many homeowners, these workers are finding that banks are creating a red-tape nightmare for people who are trying to avoid foreclosure by making a good-faith effort to change their home loans. The article relates that nightmare to the Obama Administration's foreclosure prevention plan, but as our clients and our Rowland Heights loan modification attorneys have found, the delays apply to all homeowners, regardless of whether they qualify for the plan.

The article follows an intern at an unnamed Los Angeles loan modification company. She calls Washington Mutual to check on the status of a customer's loan, only to be told that the documents have disappeared -- for the third time. Because the file is more than 30 days old, the representative tells her to send the paperwork a fourth time. Down the hall, another representative from Washington Mutual tells a second worker that a client's application was rejected because the file was incomplete, a charge the worker denies vehemently. And a third worker at the loan modification company asks GMAC Mortgage to remove an incorrect delinquency from the customer's status, placed there because their mortgage payments are being held as "loss mitigation fees" while their application is being reviewed. Loss mitigation says to call customer service; customer service says to call loss mitigation. When he objects, he is hung up on.

By now, these stories probably sound unhappily familiar to homeowners trying to negotiate a loan modification. As Cerritos loan modification lawyers, we hear stories like these all the time from clients who tried to get a loan modification on their own, only to be ignored, delayed, denied or endlessly transferred back and forth. In many cases, all the phone calls, paperwork and other efforts don't stop the lender's foreclosure process, which means that delays can actually cost the borrowers their homes. Frequently, this is when we step in. Our Murrieta loan modification attorneys negotiate these same issues with lenders -- but with the added weight of the law behind us.

Howard Law LLP represents homeowners throughout Southern California who need help convincing a loan servicer to treat their loan modification requests with respect. Banks listen to us because we are Anaheim loan modification lawyers -- which means we can and will sue a lender that violates our clients' rights. In fact, we start each loan workout case by reviewing the client's file, looking for any evidence of predatory lending that we can use as leverage for a favorable loan modification. Our goal is always to keep clients in their homes for the long term by lowering their monthly mortgage payments to realistic, sustainable amounts.

If you're frustrated by your lender's delaying tactics and you're ready to try something new, contact Howard Law today for a free, confidential consultation. You can contact us online or call us toll-free, anytime, at 1-800-872-5925.