Loan Modification Applicants Must Follow-up Effectively
Nobody's happy with the loan modification process
. But, with tens of thousands of applicants ahead of you in line, you don't have a choice. You have to understand it and work it to your advantage.Effectively following-up on your application is a critical success factor. The goal is to insure that your application gets entered into the system marked "complete", to supply frequent required updates to the file to demonstrate attentiveness, to insure that your file does not get sidetracked for rework, to respond quickly if problems arise and to counter rejections promptly.
These are the ways I follow-up:
Call Each Week
Do not simply call for an update. Be sure you are speaking to a person in a department "beyond" customer service. You want to be contacting the Loss Mitigation Department or some derivative of it - like the "Immanent Default Specialists" or the "Making Homes Affordable Team" or "The Way Forward counselors, or you get the picture. Get and record the full name of the party you are speaking to. Request information and provide information that requires an entry on your file. For example, don't ask if the file seems complete. Rather, ask if a specific item, like your 4506-T form is in the file. Or, if your application is for the Making Homes Affordable Modification Program (HAMP), ask why you were not put on a trial modification. Each week invent questions that require opening, investigating and notating on your file.
Once the file is over 30 days old, start phoning to update personal budget information, paystubs, bank statements, and 4506-T Forms. In your phone calls, ask whether or not you need to send these updates. Then, they become fodder for your other weekly follow-up action - faxes.
Weekly Faxes
Don't be routine in your requests. Send them to the attention of the person you spoke to earlier in the week. Fulfill the promisses you made and link the fax to the call. Ask for further clarification, etc.
Monthly QWR
The Qualified Written Request, guaranteed in Section 6 of the Real Estate Settlement Procedures Act (RESPA), is a formal procedure for dialogue between borrower and lender. It is surprisingly effective in eliciting responses from lenders and servicers. You can see an example on my site or at http://www.hud.gov/offices/hsg/ramh/res/reslettr.cfm. Expect adherence to the requirements of QWR - an initial response within 20 days and a formal and full response within 60 days.
Don't abuse the QWR process. Rather, integrate it into your follow-up regimen by using it monthly to request important information - one item at a time. Multiple questions per QWR never seem to get satisfactory responses. This effort provides material for additional meaningful faxes and phone calls. And, it provides information that you need. Request the name and contact information for the investor/owner of your loan. Request verification of Fannie Mae or Freddie Mac on your loan. Request a copy of the note (you may get a big surprise with this one!). Request a record of the transactions on your loan. These practices should not take you more than 20 minutes per week. Remember to call VERY early in the day so you don't have to wait long.
All applications are getting rejected initially.
Don't be surprised or alarmed. Actually, I consider it a good sign as it usually presages immanent approval! Simply continue your follow-up by determining the specific reason for the rejection, addressing it appropriately and escalating it if needed. I have some great tips for diplomatically (and sometimes not so) escalating in another article.
by: T.J. Rockwood, Jr.