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December 10th, 2009 (Modified on January 30th, 2013)

Update3: Loan Mods: Submit ALL Your Paperwork!



Update3: If you’ve been ushered into a long-term trial mod, one non-profit wants to hear your story. Click here to find out more.

Original Post (published 12/10/09): We’ve covered the Treasury’s Making Home Affordable Program (MHA) quite a lot since it’s inception and have been quick to point out the program’s flaws as well as the flaws others have noticed. The White House has focused less on addressing the structural flaws of this program — which we feel have created a host of “unintended consequences” — and more on prodding lenders and servicers to step up their game.

While we’ve already addressed why we think “shaming lenders” isn’t the proper approach to increase the number of permanent modifications, it’s important to remember that MHA is a two-pronged attack.

When the president announced the Making Home Affordable plan in February, he specifically stated that the program will require “both buyers and lenders to step up and do their part.” However, some 10 months later, we know each party isn’t doing all they can. The Administration has made it clear that they feel that lenders and servicers haven’t lived up to their end of the bargain, but what about borrowers? According to several sources, a significant majority of borrowers haven’t received a permanent modification because their paperwork has been either incomplete or completely non-existent.

From WhiteHouse.gov (emphasis added):

The majority of homeowners in trial plans still owe their servicer paperwork. Thirty-seven percent of homeowners have submitted paperwork that is incomplete.  More than twenty percent of homeowners have submitted no paperwork at all. As part of this campaign, Treasury and HUD will be engaging the 2700 HUD-approved housing counseling organizations to reach out to these borrowers.

From the Associated Press:

The mortgage companies, also known as loan servicers, have had a hard time getting borrowers to complete the needed paperwork for the administration’s loan modification program. Nearly 60 percent of the 375,000 borrowers who qualify to have their loan modifications completed by year-end have either submitted incomplete paperwork or none at all.

“Borrowers must understand the urgency of getting their completed paperwork in so they do not miss out on the opportunity for more affordable mortgage payments,” said Phyllis Caldwell, who recently was named to lead the Treasury Department’s homeownership preservation office.

-be sure to see our link in the Wall Street Journal-

The White House hasn’t stopped short at using any means necessary to prod servicers along, including threats of penalties. Perhaps they might consider a better way to prod borrowers, too, given that the risk of losing their home to foreclosure seems insufficient to get the job done. Or, will the administration push to get these “no-doc trial mods” to a permanent status?

Update1 (published 12/09/09): Just this afternoon, Chase — the nation’s third-largest servicer — announced that “only 16% [of their modifications] have been approved (or ready to be approved) for a permanent modification.”

From National Mortgage News:

Approximately 71% of the homeowners are current on their trial mods, but many have not submitted the required documents for underwriting – pay stubs, proof of employment and tax returns. “We are focused on helping the 51% of borrowers that are paying but need help completing documents,” said Chase executive Molly Sheehan.

The inability doesn’t end with Chase. Only about 10,000 borrowers nationwide completed the modification process as of October, according to the Associated Press. The news source says the Treasury will release November’s stats tomorrow. With perpetual, back-and-forth blame being passed between servicers and borrowers, we wonder how long the administration will let their program continue as is without making some changes.

Update2: As promised, the November numbers are in. As of November, 31,382 loan mods have been made permanent out of 759,058. While November’s number is still drastically low, it’s about three times higher than October’s (based on the Associated Press).

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30 Responses to “Update3: Loan Mods: Submit ALL Your Paperwork!”

  1. Lina Y Villenas Says: December 9th, 2009 at 2:54 pm

    I am loan modification agent who had started helping former
    clients facing foreclosures to keep their home thru the HAMP
    program. These are my observations, not merely allegations,
    since I had experience these anomalies first hand:

    1) Lenders like Deutsche Bank are Bank of New York are hardly offering the HAMP fortheir struggling borrowers
    most especially if the property had not lost significant
    value or their present value is lower than the replacement
    cost. These Lenders would rather foreclose, sell the note
    to an investor for 40% of the note value at Trustee Sale date and leave borrowers in suspense until the TS date.

    2) The rest of the Lenders (loan servicers) are so disorganized, you have to send the paperworks three to four
    times before acknowledging they actually received the
    financials of the strugglimng borrower.

    3) Aurora Loan Servicing is quick in giving the trial
    payment period, but very slow in giving the final agreement
    and I had two cases that they even made a mistake of foreclosing on borrowers who are already paying the trial

    Please do not blame the homeowners. Their best intentions are to keep their home and they are always quick to provide
    documentation requested by the loan servicer. The loan
    servicer who are actually the “alter-ego” of these investors-noteholder; are so swamp and exhausted with
    millions of these loan modification applicants; sometimes
    you can hear from their voices their frustrations.

    The biggest culprit here are the actual investor-noteholder.
    They delay loan modification appproval, wait for an investor
    to buy the note for whatever they desire to sell and really
    do not think of how they can help struggling H/Os. They
    just want the money back since most of them are money managers who gets paid by the investors whether the investor
    makes money or not.

    One good example is a client of mine who owes Deutche Bank $720,000. Deutche sold my client’s note to a holding company for $333,000, ignored all the laws protecting my client, and foreclosed on the property, even if my client
    had offered to reinstate the loan 10-days before the TS date.

    There are many anomalies out here in the LM process that had not been explosed by the media because nobody really cares. The H/O are always the victims and the aggrieved
    party in any of the scenarios previously discussed.

  2. Tim Manni Says: December 9th, 2009 at 4:23 pm


    Thank you so much for your observations — we’ve been dying to hear more first-hand experience from those in the trenches. We are certainly not placing all the blame on borrowers or lenders. I think you said it best when you said “There are many anomalies out here in the LM process…”

    I’d be curious to hear if you have any observations regarding BofA? The only reason I ask is because the majority of readers who write in about any number of complications regarding the loan mod process are BofA customers.

    Thanks for commenting, your observations will certainly add to the article. Please visit us again soon!


  3. Karl Says: December 10th, 2009 at 1:07 pm

    Can anybody tell what has been a general experience with an investor loan serviced by Wells Fargo???

  4. Tim Manni Says: December 10th, 2009 at 2:58 pm

    Hey Karl,

    Hopefully someone another reader will be able to reach out to you to answer your question. Did you have a good or a bad experience?


  5. robert roldan Says: December 11th, 2009 at 3:38 am

    Everytime we call B of A for the result of our loan modification, they always says that our loan is under review. We provided them with all the documents they need and it is over 10 months now that our application still under review. I believed that they are not conforming and following the President’s order about helping homeowner.

  6. Tim Manni Says: December 11th, 2009 at 2:39 pm

    Hey Robert,

    Thanks for commenting. Well, look at it this way, many in your situation have received “acceleration letters” (a letter that escalates the foreclosure process) without hearing back from their lender. I know you want some answers, but BofA is probably backlogged and hasn’t gotten to your application yet (or they’re putting off offering you a reduced payment).

    Keep on them, and keep all your conversations well documented. Communicating by email allows you to keep physical records that can help bolster your case. Please keep us updated!

    Thanks, and good luck,

  7. Barry Hart Says: December 14th, 2009 at 5:33 pm

    As an experienced Loss Mitigator for borrowers, I share the comments above except the post putting the “blame” on borrowers. Sure, some borrowers may not be compliant in getting documents supplemented to the servicer. In my experience, by far, the vast majority of borrowers seeking loan modifications who we assist, promptly provide complete documents, supplement documents when requested and still get the run around from servicers including, B of A, AHMSI, Aurora, EMC, especially Wells Fargo, Saxon, Chase, Wachovia (Wells Fargo merged), Indymac(OneWest)is virtually impossible to deal with and CitiMortgage etc. If you are an investor borrower seeking modification, then you can get in line for up to a year or more to get your response. We have tried RESPA WQRs TILA reg Z etc through forensic audits citing the violations—many of the servicers do not bother to respond to them within the legal time frame or at all. HAMP loan modification turn-around times are improving but still very frustrating 4 to 5 month avg. My own opinion–the current note holder is the primary culprit and the servicers are facilitating their conduct. Without some federal law with serious teeth in it from an accountability standpoint and proactive enforcement and/or substantial litigation against the the folks who put these “deals” together including the against the current note holder, we will see much more of the same in years to come–the lack of accountability will be a catalyst for the continuation of this nightmare for all concerned.

  8. Tim Manni Says: December 15th, 2009 at 10:26 am

    Hey Barry,

    Thanks for commenting, sorry I couldn’t get back to you sooner. I don’t think anyone is “blaming” the borrowers. I can only speak from my experience in reading borrowers’ comments and reading reports released by Federal entities (including the White House) about paper work. I do agree with you, from my experience, borrowers “provide complete documents, supplement documents when requested and still get the run around from servicers…”

    What servicer in your opinion has given borrowers the most run around?

    Thanks again for your comment Barry, we hope you’ll weigh in with your experience again soon, thanks,


  9. Loan Modification Says: December 28th, 2009 at 4:00 am

    There’s so much misinformation out there that people don’t really know what is and is not. It’s refreshing to see people that know what they’re talking about. You have an Informed commentary seems to be a rare commodity these days.Thanks for a great article keep it coming.

  10. Stop Foreclosure Says: January 22nd, 2010 at 12:35 am

    I found your blog because I wanted more information. The content you have on your blog needs to be discovered so I have added you to my Google News Reader. I really look forward to reading more posts from you.

  11. Z. Burkett, Clearwater, FL Says: February 4th, 2010 at 10:59 am

    I feel your pain, all of you. I was fortunate enough to find a company that is legitimate. Now I know that the banks the news and government say we shouldn’t go to any company that charges, that the banks will modify your loans for free. Well, how many of us on here have had our loans modified by the banks? A lot have lost their homes, and lot more still will unless you do what’s necessary to save your homes from the banks. I went through what most of you have, I was there. Then I was referred to Corey Lassiter of Clear Image Financial Group. They saved my home. I know I would have lost it to Wachovia if it wasn’t for him, Tasha, Denise and the rest of the people who work there. Got me caught up on my mortgage 1st & 2nd, lowered my interested rate & payment, and secured me a 50k principle reduction. Before anyone else on here loses their homes you need to give them a call 877-940-1477 ext 231. Corey Lassiter. Don’t be afraid of hiring a loan modification company, be afraid of the banks, they are the ones who are taking our homes!

  12. Tim Manni Says: February 8th, 2010 at 12:41 pm

    Z. Burkett,

    Thanks for sharing that info. I read something pretty recently that said something along the lines of: Congress may try to pass a law that says private mod companies won’t be able to charge a fee. Perhaps that will help diminish the controversy surrounding these types of private companies. Doing a quick Google search I found a lot of conflicting info surrounding Clear Image Financial Group.

    We haven’t heard too much about these companies from readers, so thanks for sharing your experience. We’ll definitely be keeping a close eye on this one.


  13. marilyn furniss Says: February 12th, 2010 at 2:15 pm

    I found this website/blog today 2/12/10. I appreciate the info here!! We have been struggling with Wells Fargo for over a year now . We have been through the free help (green Path) without so much as an unintiated communication to see what is beeing done. NOTHING has been done by anyone that has made a real difference in our situation. Sent ALL paperwork (2/3 times!) Had a mod offer that increased our payment, had a sp. forebearance that was lived up to with charitable assistanc and WF made the account current! Had to start over!! HAd Sp. fb #2 lived up to,redid pw and filed again!! offered a moritorium that they think will change our financial condition and have heard nothing sense!!! Any thoughts or help available? We are scared to ask for any help as we can’t affordx to pay anyone and all indications are that we would be scammed anyway!!

  14. Tim Manni Says: February 12th, 2010 at 2:34 pm


    We’re so glad you stumbled across our site — how did you find us?

    Be sure to check out this recent story of ours: http://blog.hsh.com/index.php/2010/02/how-long-have-you-been-in-a-trial-mod-share-your-story/
    A non-profit is looking for borrowers who have been put into long-term trial mods to share their stories.

    Anyway, we’re sorry to hear about your struggles, we wish we had an answer for you. This mod system is totally broken. Please don’t hesitate to offer up any story suggestions or ideas that you would like to see covered on the blog.

    Best of luck, thanks for sharing,

  15. William Anderson Says: February 16th, 2010 at 1:44 pm

    I have played the paper chase game with AHMSI for three and a half months. Faxed w/ return and Cert mailed all docs and waited the 72 hours to verify. Then while waiting to be assigned a mediator, my docs were lost. Did the steps again and was told two weeks later they cannot use my bank statements and need a profit loss. No prob, get that and then they wait three more weeks to tell me (had spoke with 3 employees in this period) they need my wifes check stubs since two months had passed. Complied and verified with loss mit agent that all docs were present and accounted for and after two more weeks they started the foreclosure process and send me a letter declining the loan mod due to not filing the documentation but said I could re apply!!!

  16. Tim Manni Says: February 17th, 2010 at 11:03 am

    Hey William,

    This sounds ridiculous! Sorry to hear about your troubles. I’m starting to question if lawmakers will ever be able to fix this loan mod process.

    Best of luck, keep us posted, thanks,

  17. Gary Says: February 19th, 2010 at 10:41 am

    What is the deal with B.of A. ? I have submitted all the required paperwork 3 times now, over a period of about 6 months. Are they just stalling , or are they just so incompitent they cannot keep up with it? Does anyone know what is really going on with them ?

  18. Tim Manni Says: February 19th, 2010 at 11:39 am

    We wish we did Gary.

    You’re one of the many (and I mean many!) who have been asking the same question and expressing the same frustrations over BofA.

    Were you a BofA customer originally — or were you a CountryWide customer? What type of loan do you have?

    Hope to hear from you soon,

  19. Z Burkett Says: March 9th, 2010 at 1:22 pm


    I understand totally what it is that you are saying. We all are at a huge MAJOR disadvantage in these negotiation proceedings. In these dealings! What I don’t understand is that since I know that we aren’t the only ones who realize this (or are we?), why aren’t more people going to lawyers and compliant loan modification companies to get their loans modified? Instead they will listen to their lenders who tell them not to, then they frustrate the hell out of you until you give up and/or lose your homes…Then you want to find a lawyer for a class action lawsuit. That doesn’t bring your home back…

    The government needs to do something to punish these banks for not doing what they agreed to do when they accepted that tarp money…And, we as consumers need to take all of our money out of these banks, and open up accounts at our local credit unions. Money is all they seem to understand. We all know that the President can’t do this all himself. And, the other politicians can’t seem to agree on anything fast enough to help all or most of us homeowners not lose our homes. I feel for anyone who has to lose their homes when they don’t have to. YOU NEED TO DO WHAT’S BEST FOR YOU AND YOUR FAMILY TO SAVE YOUR HOMES! NOT LISTEN TO THE SELF CENTERED ADVICE THAT THE LENDERS ARE TELLING YOU. Hire a professional to get this loan modification done for you. The legitimate ones know what they are doing, do your research. Find the right company or lawyer (one who knows what he’s doing) and go at the banks like you’d goto court..prepared with the best representation that you can find..I can’t stress this enough how much sleep I got and gray hairs I lost once I turned my case over to Corey Lassiter at Clear Image Financial Group, Inc.. They are one of the good guys. Kept in touch with me from the very beginning, I could view updates on their website, or phone in and speak to the negotiator assigned to my case, as well as I don’t know how many time I spoke to Mr. Lassiter on the weekend or late in the evening via his cell phone. He always took the time to speak to me. Then when my loan mod was approved, I could exhale….They got accomplished in 90 days what I couldn’t seem to get past step one for about 6 months. I will never forget what he told to me.. He said, ” When the banks ask you questions over the phone or ask you to send in the same paperwork over and over again, they are not really looking to approve you. They are hoping you tell them or send them something to disqualify yourselves”. And, the more I read these blogs and forums the more I realize that that is 100% true.

    Look for yourselves, out of the 344 comments on here am I the only one who got approved? I must of been the only one who used a professional! You have a better chance of getting approved if you do. His contact info for all you smart people who whats to keep their homes is 877-940-1477 ext 231, classiter@clearimagefg.com. I can lead you to water..well you know the rest!

    And, Tim if loan modification companies aren’t allowed to charge a fee, then how will they stay in business? We will end up in the same situation we are currently in. I think that’s more propaganda being spread by the banks…Not sure what you saw, but I think that negative information on Clear Image Financial Group came from a disgruntled employee! Anyway you look at it, they worked great for me and my family!

  20. Tim Manni Says: March 9th, 2010 at 4:59 pm

    Z Burkett,

    You know, you may be right — I think you may be the only one who has left a comment so far that has had (at one time) a hassle-free mod experience. We really don’t address (and certainly don’t endorse) private mod companies due to the fraud and scams that surround them; that’s not to say a majority of legitimate companies exist.

    I just did some research on the FTC’s website: the ban on fees (for private mod companies) has been proposed for upfront fees. Companies will be able to collect fees if they deliver what they promised to the borrower. They can charge for their services, they just can require money before they begin.

    “He said, ‘When the banks ask you questions over the phone or ask you to send in the same paperwork over and over again, they are not really looking to approve you. They are hoping you tell them or send them something to disqualify yourselves’. And, the more I read these blogs and forums the more I realize that that is 100% true.”:
    This blog post is addressing this exact issue — from now on borrowers must submit every piece upfront, and lenders must promptly communicate with borrowers if they don’t. However, I’m not naive, this won’t make the system perfect, but as I said in the post, this should have been the case from the start.

    Great comment. Since you’re one of the only readers who has gone through a private firm, perhaps you can tell us more about it.


  21. marilyn furniss Says: March 12th, 2010 at 12:07 am

    I would like to know exactly what the company did for Mr. Burkett!! Seems that I have found his name on several blogs about home mods and it seems that they all say the same thing word for word. Is he copying and pasting everywhere to let people know there is help or could he be working for the company he says worked a miracle for him? The research I did on the company did not end in such a cheery picture. Check out the Better Business Bureau in Florida and then look at othere blogs about home modifications!! When someone can show me the truth in writing from documents that have been recorded with the proper certification I MIGHT believe it!! My life just keeps getting better! I just got a bladdere cancer diagnosis and found out that only one of my kidneys is working and I still do not know if I am going to loose my home!!

  22. Tim Manni Says: March 12th, 2010 at 12:33 pm

    Hey Marilyn,

    “I would like to know exactly what the company did for Mr. Burkett”: Good question! There’s some sentiment out there that those companies don’t do anything you can’t accomplish on your own. However, that doesn’t say they haven’t helped some homeowners. I too saw the stuff on the Florida BBB. We haven’t heard much positive press from these companies, so I’m always interested in hearing the other side.

    So sorry to hear about your health conditions, we wish you the best of luck.

    Try and have yourself a good day, we look forward to hearing from you soon,

  23. souvanny phrakonekham Says: June 8th, 2010 at 8:46 pm

    MY name is Souvanny and I made it as far as getting a permanent loan modification from Bank Of America with a conract signed and notarized. I received the documents April 1 got it nortarized April 2 2010. I mailed it by FEDEX on April 5, 2010 and according to the tracking number BOA received it on April 6, 2010. The deadline for returning the document was April 8, 2010. I haven’t heard anything from BOA and on April 15 or 18 received a letter from BOA saying they are canceling the special forebearance agreement and no mentioning of canceling the loan modification. So I called BOA on April 18,2010 and ask what’s going on they said my loan had been contract for the permanent loan modification got denied due to noncompliance. I ask what the noncompliance was and they said they received the documents late but that turned out to be not true because they received it on April 6, 2010 but denied it April 8,2010. I have been calling BOA and trying to get a straight answer and no one at BOA was able to give me one. I called to with the help of a HUD approved councelor to find out what is really going on and someone at BOA said I got denied due to differenc in financial. They said what I said verbally when I had first applied for the loan modification was different from my paper documents they required by $1400. They had said the analyst went over my file from Feburay to May 6,2010 and that’s why I got denied. I never received a letter stating why I was denied. When I gave Bank of America all my finance information and they sent me a letter say they received everything.Why did Bank of America mailed me the contract for a permanent loan modification and turned it around by denying me with no notice stating why it was denied. Please anyone help me.I just recently lost my husband on October 18 , 2010 but Bank of America doesn’t seem to care about me losing my husband. you can contact me with advice at 760 877 5679 anyone please help

  24. wildinwarba Says: June 10th, 2010 at 9:29 pm

    I contacted ClearImage and talked to Corey Lassiter about a loan modification in Aug.2009. He took all my info, said they could reduce my loan almost $600.00 Sent them the $1895.00 requested along with ALL documents needed. Sent updated finacials every two months and was told I was in review. Again was asked for updated financials and sent those. Was told several times all documents had been recieved. In March 2010, I tried to get on the website to view my case and couldnt get on the website. Called ClearImage and was told they had been shut down by the Dept.of Financial Regulation of Florida. Money gone and no loan mod. I will lose my home

  25. Tim Manni Says: June 11th, 2010 at 2:36 pm


    So sorry to hear that. That is precisely why these private modifiers can’t be trusted. If we hear of a way to help you can be sure we’ll be in touch.


  26. James Pierce Says: June 16th, 2010 at 6:09 pm

    We too have been dealing with Corey Lassiter with Clear Image. We started our loam nodification in Jan. 2010. We paid Clear Image $1295.00 and in Mar just like with wildinwarba I logged onto Clear Image to check my case and could not log on. Called and found out they were shut down. we just received letter from BofA stating we were turned down for mod loan. Now we are out $1295.00 and probably our home.

  27. Tim Manni Says: June 17th, 2010 at 10:45 am


    So sorry to hear about your misfortune. Do you know BofA turned you down?


  28. wildinwarba Says: June 20th, 2010 at 7:47 pm

    Sorry to hear that you also James, have not had a good experiance with ClearImage. I have resigned myslef that I am losing my home but its still a bitter pill to swallow when I think of it.The LM has just gone on to long to continue, and all the hope is gone about saving my home. When I checked out other web pages and found out that EMC/Chase has only app.16% of their applicants, all the air was sucked out of me. I have been trying to continue the LM on my own and I am still waiting to hear from EMC/Chase,but at this time have not been able to make a complete payment as of May 2010. It doesnt look good!!and I dont think I want to anymore. Just want to get this headache and the mind games over so I can figure out what is my next move.I hope things go better for you and yours James.

  29. Albert Says: August 2nd, 2011 at 12:50 pm

    With Bank of America and still waiting for the packet with the trial payments. After about 8 months we got a call from the underwriter who said that our file was not even looked at because the person working on it either got fired or quit. Now he needed “updated” information which we submitted. In May 2011 we were told we were approved but we are still waiting for the packet to start on the trial payments. All the months waiting and waiting and were told “under review” and the file wasn’t even looked at. The banks are not complying and extending these modifications. Still waiting!!!

  30. tamajam Says: October 8th, 2012 at 5:43 pm

    There is absolutely NO incentive by the servicers to modify loans – none. In fact, there is far more incentive to simply go through the motions by promising loan mods while having every intention to foreclose. Keep in mind that the pools (RMBS)of loans are insured against default to protect investors. Moreover, once a loan defaults (and how many homeowners are actually ENCOURAGED to default), the SERVICERS charge huge ‘default fees’ – and that is when the insurance kicks in for loan. Then, after foreclosure, servicer also gains title to the property – even though it never held the note – and can still sell at a huge discount to ‘double dip’ on the property. So, investors profit AND servicers profit. Homeowners? They get screwed – again. Government knows all this and cares little because it was involved in RMBS scheme from getgo – that is why we do not hear about this in media. Meanwhile, government bails out the banks. The RMBS was a crime against this country of unparalled magnitude…people are still making millions of dollars while this country is in the beginning stages of economic death.

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Tim Manni is the Managing Editor of HSH.com and the author of their daily blog, which concentrates on the latest developments in the mortgage and housing markets.

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