No customer service for loan modifications

In 2004, Missy and Keith paid $450,000 for their home, but by 2009, their home was only worth $275,000. Their mortgage was $400,000. Missy lost her job at a local nonprofit, and Keith’s sales job as a luxury boat salesman pretty much hit bottom. They were no longer able to keep making their high mortgage payments and applied to Bank of America for a loan modification. It took over five months with Bank of America for the modification, and when Missy and Keith finally received it, their payments went down to half of what the original amount was, but only temporarily. Just a few months later, the bank changed their mind. Keith and Missy tried, to no avail to speak with the bank about the reversal, but the bank refused to make any changes, and as every month passes by, Missy and Keith’s credit gets worse and worse.

The government is pushing lenders to lower mortgages so borrowers don’t have to lose their homes, but the biggest complaint from Missy and Keith and countless others is the unprecedented amount of paperwork, unexplained rejections, rude personnel, and unreturned phone  calls. Lenders aren’t approving applications as originally anticipated. Less than 4% of the nation’s applicants under the government foreclosure prevention program have received help. Bank of America is one of the leading institutions lagging behind.

Under HAMP, which is Making Homes Affordable with loan modifications, there is a three month trial before the lesser loan becomes permanent, and stories like what happened to Missy and Keith are becoming more common. Under the new rules beginning June 1, 2010, the government is taking another step to make banks more accountable to the never ending complaints of the troubled homeowners by making it mandatory for mortgage companies to collect borrower’s official documents as part of the initial process. That will at least eliminate the excuse about losing paperwork. Now what can the government do about rude bank representatives?

The banks don’t really want to foreclose on all of these homes, and there are millions of home owners who would rather qualify for the modification than walk away. Perhaps it is time for the banks to hire more personnel, train representatives to be more efficient as well as  teaching employees some basic principles of customer service.

photo credit: woodleywonderworks

2 Responses to “No customer service for loan modifications”

  1. Tim Sanchez said:

    Feb 03, 10 at 12:36 pm

    I’ve been a Bank of America customer for about 12 years. I still have my main checking and savings accounts with them and my home mortgage.

    I’m sad to say I’ve seen their customer service and practices steadily decline over the years. I am hearing nothing but horror stories like this one when it comes to loans.

    I wonder what caused the decline in service…perhaps it is better to let them find that out while I move my money and loans to USAA.

  2. Service Untitled» Blog Archive » Wachovia delivers positive customer service said:

    Mar 02, 10 at 1:09 pm

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