Escalate Your Loan Modification Problems

The nuns used to punish me for getting out-of-line but, these days I do it all the time and coach others to do so as well. I know Sr. Helen Michael would be pleased, however, because I am giving good advice that is helping people! Here’s what I mean.

In the current Loan Modification Frenzy, the “line” is too long. Hundreds of thousands are in the queue ahead of you with more than 50,000 added per week. The banks can’t staff and train and manage and retain nearly enough workers and the systems and procedures are overwhelmed as well. Add to that the fact that the banks are only begrudgingly cooperating with the effort – and you have a formula for frustration and failure.

The answer is to copy the winners, that 4% of applicants who get the good modifications. How do they do it? They step out-of-line and do extraordinary things.

In previous articles I’ve described the way winners craft their applications and follow-up on their files to use what I call File Inertia. Now I will describe the way they escalate problems. Because problems are an inevitable part of such a convoluted and broken process, effectively dealing with them is critical. I advise you to 1) Ask 5 Times, 2) Escalate well and 3) Escalate well beyond.

Ask 5 Times – Handling common problems is easy. If they misplaced your 4506-T Form, send them another one. If they want 3 months of bank statements instead of the 2 their forms state…send it in. What I mean by Ask 5 Times is, when you get information from the agent that is just wrong, and you can’t seem to get them to perceive it…I call back and try another agent, 5 times. That’s right, it’s not worth it to try to prove your point and sometimes the agent is just not savvy enough or trained well enough to understand your question or concern. If I can’t get 5 agents to give me the “right” answer, then I ESCALATE.

Escalate means going up the chain of command…asking a manager or supervisor to review the situation with you. I do this politely so as to minimize the offense to the agent but also confidently and pointedly. I will say (to the 5^th agent) “Please connect me to the supervisor on duty, will you? This is just too important to me to let this go. I want to hear it from a supervisor”. Sometimes the agent will oblige. Sometimes the agent will argue with you. Sometimes (I believe) the agent will ask their cubicle-mate to pose as a manager. Sometimes the manager will have to call you back (lots of luck with this one). And sometimes a more informed, better trained person WILL actually take your call and add insight and solve the problem.

Escalate Well Beyond means taking your problem beyond the Loss Mitigation Department to seek assistance and support from other departments, or from bank executives, regulatory agencies, politicians, trade associations and even the press.

Don’t think that your situation is too small for any of these entities to care about or to take action on. The secret to getting their support is to request it in a manner that indicates that you 1) have used all the correct channels already, 2) understand their role and have appropriate expectations for what they can do on your behalf, 3) know exactly what you want them to do and by when and 4) that you are the sort of person who will escalate right past them if they do not respond.

These Escalations Well Beyond are incredibly effective. Recently one client was assisted by the CEO of Aurora Loan Servicing, another by a local Congressman’s plea to the OTS and a third by a U.S. Senator! Who’d a thunk it?

We’re all in this together (well, many of us are at least). And getting help is often just a case of knowing who to ask and what to ask for. Most people are genuinely sympathetic to those of us caught in the housing crisis. After all, it’s nearly most of us.