Why the Loan Mortgage Servicer Industry Gives You the Runaround

By August 15, 2019Blog Posts, Podcasts

The individuals who work for servicers–the people you talk to on the phone when your loan is default or nearing default–are sometimes called Loan Modification Processors, Loss Mitigation Specialists or Single Points of Contact. Their specific job title depends on which servicer they work for, such as Chase, Wells Fargo, Selene Finance, Fay Servicing, PHH Mortgage, Ocwen Loan Servicing, PNC Bank, Rushmore Loan Management or Bank of America (to name just a few). These folks appear to be friendly and often are. But sometimes their actions, or actions of others in their company, are actually frustrating things throughout the application process for a loan modification or other loss mitigation alternative. Foreclosures are a servicer’s friend. 

Sometimes, our staff even thinks the individual employees—the Loss Mitigation Specialists or whatever they happen to be called–are actually kept in the dark by their company for the purpose of leading the homeowner along. You call one person; they know your kids and you hear about theirs; the servicer’s assigned loss mitigation specialist appears to care about and understand your circumstances; they are just as shocked as the homeowner when the servicer sandbags you with foreclosure despite your diligent participation and engagement with them in their application process. 

A Loan Modification Application, Short Sale Application, Repayment Plan, Recapitalization, Deed-in-Lieu-of-Foreclosure Application, Assumption Agreement or the Assumption Process (from a death or divorce in the family) are all forms of “loss mitigation.” 

Loss Mitigation application denials by servicers can result from an erroneous determination that the servicer makes in the normal course of business. Or, servicers will commonly ask for the same documents over and over. They claim they never received the documents or just keep asking for the same thing without telling you what needs to be fixed on the document you already submitted. Then the servicer will deny the application based on an alleged failure to provide all documents requested. These denials often frustrate homeowners and discourage them from completing or re-starting the loan modification process; it’s no coincidence of course that the servicer charges inflated fees from servicing a mortgage loan in default. It most easily recoups these fees by the property going to foreclosure sale.  Thousands of homeowners across the nation throw up their hands in frustration as they are never able to actually complete the loss mitigation or loan modification process. 

What can you do about a servicer giving you the run around? The best approach is to hire a licensed attorney to fight for you through out the loss mitigation or loan modification application process. We can put the servicer back in their place, insist they find the documents they claimed are lost and ensure they comply with federal regulations. A homeowner must keep accurate records of their interactions with the servicer, with dates, times and notes of what the servicer told you throughout the loss mitigation process. This way if you are denied, you have made a record to build a Notice of Error or other demand to process a loan modification application

The choice of attorney is important. And you should never hire a non-attorney loan modification processor, or a “fly-by-night” company that is located outside the state of Illinois, who promises you they can get you a loan modification. Be wary of any attorney that wants to charge you for an initial consultation, or an attorney who does not specialize in foreclosure defense but wants to defend your foreclosure. Foreclosure is an intricate practice area with many pitfalls for attorneys who don’t know what they’re doing.  

Lou Brydges & Associates has been in the trenches of the foreclosure crisis since it started. Our attorneys have a combined 37 years of experience litigating in the state and federal courts. We strongly believe a free, one hour consultation in our office is the best way to understand your particular situation and needs, and to craft a strategy that will work for you and your family. Our consultations are not a sales pitch. They are a conversation to discuss your options. If you are in or facing foreclosure, call or click today to set up a consultation. The sooner you learn your options you can face them head on and feel better knowing you have experienced attorneys on your side to help you through the stressful situation of foreclosure or the loan modification process.