Q. I am having great difficultly getting a loan modification on my mortgage. I am 100% confident that I meet the criteria for the loan modification program. After initially agreeing to do the modification, they now say I don’t meet the requirements and stopped taking my calls. Can I sue? My story:
- I followed the modification path and it dragged out for about 4 months.
- They had an appraiser come by and call my home a 3 bedroom not a 4 bedroom. This amongst other ignored factors forced my home to come in at 105.9% LTV. (The threshold was set at 105% LTV at the time).
- I advised them that they had made a mistake on the appraisal and that my home should have been considered a 4 bedroom and they agreed that it would push it over 105% LTV and that the appraiser would be back out. The appraiser never showed for the “revised” appraisal. Now the bank won’t take my calls.
In addition, when I first called, the bank tried to steer me towards refinance, not modification. I’m very angry at the moment and in extreme financial hardship. Are they doing anything illegal by not modifying my loan?
A. Right now, if your loan unless you have a Fannie Mae or Freddie Mac loan, participation in the program is VOLUNTARY. They are not required to modify your loan, but they get incentives if they do. You can’t sue them for anything if your loan was an interest only adjustable rate mortgage (ARM) or a subprime loan You didn’t say whether or not your loan met the Fannie and Freddie requirement.
In your case, the whole problem seems to be the appraisal. Banks are very conservative these days about values of homes, given the volatile housing market. I’m actually surprised they agreed to send the appraiser back out there.
Some things you can do:
- You can offer to pay for another appraisal.
- Have you pulled your county assessors’ office to find out the square footage and number of bedrooms they have on record? The appraiser should have used what is on record for square footage and bedrooms. If the assessor’s records show the square footage and number of bedrooms as different then what the appraiser used, this might help convince the bank that the appraisal needs to be redone.
- I caution you, though, if there was an unapproved addition, the extra square footage and bedrooms are regarded by the assessor’s office as non-existent. In most counties in this country, all additions must be approved before the home gets “credit” for the extra square footage added. This is to ensure that building codes are followed by conducting an inspection of the work done.
I definitely would advise you to keep trying. The modification is not dead yet.
We are eager to hear about your loan modification experiences – tell us by leaving a comment!
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This is typical -we all go thru the same long dry waiting. Later we are told not approved.
I have been trying to get a loan modification for almost 4 mths. for my 2 homes. I finally just been notified that one of the homes got re-modified and still waiting for info on the other one if that one will go through. I was very lucky and its just a waiting game and i was lucky it worked for me. Saving almost 200.00 a month.
My loan modification was a standard refininance done in 2005 with a 6.375 fixed rate. After a two year battle (dropped calls, incorrect date, dismissed case for no reason, wrong phone numbers, you name it…..) I received a modification which stretched the loan to 40 years and reduced the rate that I pay. The problem? After five years the rate goes from 2 to 3. Year six, 3 to 4, Year seven 3 to 5 and the remaining years are at 5 % fixed. My hardship letter and income statement clearly spelled out that a quarter of my income for the first five years is alimony that will cease at year five! Also, the original note’s interest is still going to accrue throughout the life of the loan, leaving a balloon of $90,000.00 and I had to pay $7,000 to have this done! At issue is the fact that at the beginning of my marriage in 9/2005, I became disabled. I am now permanently disabled and unable to produce any extra income. The 31 % threshold will be far surpassed by year 8, plus taxes and homeowners are now escrowed and sure to increase. Is this legal? Is seems as if this is nothing more than a surefire way to foreclose after five years! I now I sh0uld not have accepted this loan, but after paying a reduced payment, I was also recieving notices to accelerate and owed over $2,000.00 I also was going through what became a nasty divorce, declaring Chapter 13 bankruptcy and trying not to have a Nervous Breakdown! My credit score was in the middle 700′s when I married. Now I am afraid to look, I just now it is really bad. The worst part is the liabilities were not mine, but I was trying to be nice and accepted 90%! One year into the divorce and the alimony has stopped. He is not working. I am going to food banks and can not even pay for gas to go to the doctor, let alone pay for the doctor. In essence, I think I am SOL. Any suggestions? Anyone? signed, clinging to a sinking ship in Sarasota, Florida