Congratulations, You Have Been Offered a Loan Modification! Your Loan Servicer Will Soon Foreclose on Your Home!
Do not think your nightmare is over because you have signed and returned a permanent loan modification. Loan servicers are notorious for failing to honor permanent loan modifications. In our experience, they're all bad, but Bank of America is the worst.
Here's how to improve your chances of getting your loan modification honored:
First, meticulously follow the instructions provided with your loan modification. No matter how nuanced and ridiculous the instructions are, follow them exactly. For example, one servicer provides a sheet titled "Instructions for Notary," for which there are multiple versions, but some require any months to be spelled out. If you write "Dec." or "12" instead of "December," the servicer will tell you months later that you have not entered into a loan modification because you did not follow instructions. This is obviously a bad faith attempt to collect additional payments from you before foreclosing on you, but nonetheless, you must not give the servicer reasons to do so.
Second, make your payments distinctly identifiable to the modified payment. If you are paying by check, write in the memo line, for example, "June 2014 loan modification payment." If you are paying by phone (because your ridiculous servicer requires you to), insist that they note the "June 2014 loan modification payment" information on your account. This can be crucial to successful litigation later. Your servicer will later defend your lawsuit on grounds that it never signed and returned the agreement ("statute of frauds" defense). Well, by following this advice, you are creating the "partial performance" exception to the statute of frauds defense.
Third, call your servicer regularly to ask why you have not yet received the permanent modification agreement executed by the servicer. You will receive a response such as, "Oh, it takes time, just give it time and keep making your payments." Express to the representative that you are concerned, and ask that they please make notes of your concerns, and their response. Always play nice with these reps--get them on your side, willing to help. The individual reps often do want to help--the servicing company fat cats just do not let them help. You are again helping your future litigation tremendously by creating this record--building your "partial performance" exception to your servicer's unconscionable defense.
Fourth, if your servicer refuses to accept your payment, politely explain that you must make the payment, and that the servicer can figure out the problem later. If the representative remains unwilling to accept payment, kindly ask him or her to make note of the conversation. Call back again later, and try with a different rep. If you just cannot make a payment, save the payments for coming current after your litigation.
Fifth, file a Consumer Complaint with the Florida Office of the Attorney General Consumer Protection Division. Also, file a complaint with the federal Consumer Financial Protection Bureau. Also, file a complaint with the Florida Office of Financial Regulation. Filing complaints with these agencies can help tremendously, as the loan servicers often can only be motivated by public exposure of their recklessness. Make sure your complaints are well-written and detailed to be effective! On more than one occasion, we have had servicers' responses to these complaints help us in litigation.
If, despite your best efforts, your servicer commences or resumes your foreclosure, or if you are fearful that your servicer will not honor your loan modification, contact Parker & DuFresne, P.A. and discuss your concerns with one of our experienced lawyers. We are actively engaged in Mortgage Servicing Litigation, and we often work on a contingency basis in these suits, as the Fair Debt Collection Practices Act and the Florida Consumer Collection Practices Act provide that the loan servicer pay our fees if we are successful.