A video released by Freddie Mac says that it is…and that having your documents all lined up and ready to go will help make things easier for you and your servicer.
What do you think?
Not so Fast!
I agree that having all your documents lined up and being able to get to them while talking on the phone is very helpful and can help eliminate a little bit of the phone tag that’s inherently part of the loan modification, short sale, or foreclosure process.
But the video over simplifies a very complicated and convoluted process and makes it appear as if the problem is with homeowners not being prepared when they call their servicer. While that is surely a problem for some, from my recent experience trying to get a short sale approved on a house I used to live in (see My Short Sale for more info), a huge part of the problem is a complete lack of urgency from the servicers.
The Real Problem with Servicers
Here’s my situation…and I know from talking with you all that I’m not alone.
I literally called my loss mitigator 3 – 5 times a day and left nice, polite messages each time asking for status updates. It took 2 weeks for her to finally call me back!
And then when she called, the gist of our conversation was…”your application is in the process and there’s nothing that can be done to move it along…it has to go through all the steps and you just have to wait for it to happen when it happens.”
That’s all well and good, I guess…as long as my buyers will hang out and wait for the deal to finalize!
They’ve already been waiting 4 months since they put the offer in!
Enough about my situation, though. It’s just symbolic of what most people are experiencing…long wait times, servicers that don’t call you back and then ask for the same documents you’ve already submitted to be resubmitted.
The industry and government like to blame it on being over burdened. And I’m sure that has something to do with it. But the real problem is a lack of desire to do anything meaningful about the problem.
It’s a Systemic Problem
The problem goes from the top to the bottom of the loss mitigation side of loan servicing. For example, the actual loss mitigators could help by simply returning phone calls. The management of servicing companies could help by streamlining approval/denial processes so they used more standardized and meaningful models, and the investors (primarily Freddie Mac and Fannie Mae) could help by telling servicers that as long as they deal met their criteria it was OK to modify or sell.
So yes, you can definitely help yourself and the servicer out by having everything ready when you call. But don’t buy into the video’s over-simplistic message…you’ve got a long road ahead.
More Help
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Tags: freddie mac, hardship letter, Home Affordable Modification, Home Affordable Refinance, loan modification, My Short Sale
September 8th, 2009 at 8:40 am
If this was reality the foreclosure mess wouldn’t be so bad. Not unless servicers have retrained their people within the last 2 months, this scenario belongs in lala land. My servicer, took my information over the phone, stated that he needed to run it thru his system, and stated that we could not be helped based on his model. All done within 3 minutes.Needles to say we’re moving on.