The loan modification process is arduous. No one…not applicant, counselor or bank employee…is pleased with the process. And, with tens of thousands of applications ahead of you in line, you have to take extraordinary measures to make it through the process successfully.
Effective follow-up on your application is one of those measures. Your goal in follow-up is 1) to insure that your file gets into the system marked “complete”, 2) to supply frequent required updates to the file to demonstrate attentiveness, 3) to insure that your file does not get sidetracked for rework, 4) to respond quickly if problems arise and 5) to counter rejections promptly. In short, effective follow-up creates dialogue to give you an advantage over other applicants.
Here’s what I recommend:
One Phone Call Per 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 requires 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.
One Fax Per Week
Do not simply fax for an update. Tie your fax to your phone calls by faxing to the attention of the person you spoke to by phone earlier that week. Link the conversation to the fax by specifically fulfilling promised information and by asking additional questions to get clarification. The additional questions for clarification provides real material for additional faxes and phone calls.
One Qualified Written Request Per Month
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.
Rejection has become standard operating procedure
It is highly likely that you will get rejected in error. Especially of late, it seems like erroneous rejections and after re-evaluation is the norm. So, don’t be discouraged if you get rejected. Just continue your follow-up by 1) determining the exact reason for the rejection, 2) countering the rejection appropriately and 3) escalating the situation as needed. Get my article on Effective Escalation Techniques for some great tips.
