Permanent Loan Modification After Making 7 TRIAL Payments Under HAMP?

by Paul
(Sacramento,Ca)

After submitting our HAMP loan modification application and all necessary documents in OCT 2009, we were placed into a trial modification Feb 2010, and have made 7 successful payments under the trial. Unfortunately, I had to file bankruptcy in Feb 2010 due to a downtown in the housing and local economy here in California. I am a flooring contractor and my business has declined. The bankruptcy was discharged under Chapter 7 in May 2010. We signed an intent to reaffirm our mortgage with IndyMac/OneWest bank prior to this discharge. It is and was our intent to remain in our home. This month (Sept 2010) I have been told by my lender that I was disqualified, and my payment has gone back up to an un-affordable level. They said I was disqualified for not signing and returning the final modification paperwork, but we NEVER received ANY modification paperwork from them. They have not even as much as told us what date they sent them to us allegedly. They claimed they sent them to our attorney, but he says he has nothing from them regarding permanent modification! Now, we've been asked by OneWest bank to re-apply for the HAMP program, re-submit income documents, proof of occupancy, profit and loss statement since I am self- employed, pay-stubs for my wife, and in the meantime my payment is unaffordable and I am in imminent risk of default. What do I do next?

Mortgage Loan Modification Answer:

Unfortunately, OneWest bank is one of the really awful banks with regards to loan modifications. Countless homeowners have complained about OneWest's underhanded tactics to stall or avoid having to modify loans.

You mentioned that you have an attorney. What does he or she have to say about this? Is there anything your attorney can do to compel the bank to honor the original approval and move it to become permanent without having to re-apply for HAMP and start all over again?

If you have no choice but to re-apply, your lender cannot foreclose on your home while you are in the process of getting your loan modified.

Your lender can start the foreclosure process, but cannot finalize it unless they issue a denial for your re-application.

I know it's probably one of the most frustrating things to start over again, but if that's the only way to get your loan modified to an affordable amount, then I say just do it. Be extremely diligent with your follow ups and document all your correspondence, both verbal and written.

If you feel inclined to escalate your issue, click on HAMP Escalation process for information on how to go about doing so.

Good luck and all the best to you! Please come back and let us know how everything turns out for you.