Loan modification servicers act as agents to the lender. They are different from a loan modification firm. They are responsible to the lender in several areas, such as they collect payments from the borrower, manage the accounts of a loan and also process loan modification applications forwarded by the loan borrower.
There are some violations that they may take place while processing a loan modification request from the borrower. Here are some common loan modification mistakes that the mortgage servicers often make:
Stating that a homeowner has to be in default to be eligible for a loan modification
This is one common violation. From the government policy on home modification, this is a wrong demand. According to the Obama’s Home Affordable Modification Program (HAMP), it is stated that a borrower can apply for a loan modification if the homeowner is defaulting payment or is most likely sensing that defaulting is looming.
Delay in application processing
This is another common violation that often prevents a homeowner from getting through a loan modification process. In this case, it is possible that some documents might be missing. With the new federal rules, this is put on a check to favor the homeowner in saving time and getting a modification approved.
Failing to convert trial modification to a permanent one
According to the government HAMP program, a three month’s trial of a loan modification should be made a permanent one when it is obvious that the borrower can comply with the payment terms of the new arrangement. Mortgage servicers are reluctant about this by keeping a borrower much longer in the new terms.
There are some other violations committed by mortgage servicers. You can ask your loan modification attorney to help you out if you realize that violations have been committed against you. You can visit loanmoddepot.com/ for loan modification related guides.