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Loss Mitigation Errors – How to Fight Back when Banks Make Mistakes

Loan Modification and Bank Issues Still Plague Consumers

I read a recent article in the New York Post where a homeowner is seeking to fight back using glitches in a banks loan modification system. This news left me unsurprised that someone had this happen to them. Many of my clients have had prior attorneys in their foreclosure cases that did not offer loss mitigation services (loan modifications and short sales). They hadn’t seen what this consumer and my office see everyday – loss mitigation errors in processing by the banks. In this article, it appears Wells Fargo admitted to a glitch which triggered a denial of a loan modification affecting roughly 600 people and a homeowner is trying to claim that they were part of that group. It didn’t have to take that long, but for so many consumers they are simply unaware of the errors in the first place.

Avoid Loss Mitigation Errors by keeping a paper trial of your communications with the bank in foreclosure

If you are trying to navigate the loan modification or short sale waters alone – do so with caution. An attorney that does this everyday is highly advisable. This is because various rules and regulations are out there that are designed to keep the bank honest in working on your loss mitigation application. This is meant to help avoid loss mitigation errors if you know what you are looking for.

If you are submitting a loss mitigation package, or have done so in the past, take a few moments to create a timeline. Itemize when you started the process. Detail what you sent and in what method. If you received something in the mail from the bank or servicer – write that down too. Do you think there was an error in handling the loss mitigation application (e.g., you never heard back after you uploaded it, they requested the same documents you had sent, etc.)

If you can’t seem to get a decision from the Bank – bring the information you’ve gathered to an attorney. They may see patterns and practices that are clearly wrong – such as a potential denial letter for “not enough income” shown on the application when there truly is a large income shown in it. It’s important to read everything coming in from the bank.

In some instances, you can even give the bank notice of their loss mitigation errors and get them to admit that they made a mistake. If that happens, they are likely to begin to correct that error and reattempt to find a program for the consumer. This is commonly done in our office by using the Notice of Error, Qualified Written Requests, and Requests for Information made available to consumers by the Consumer Financial Protection Bureau.

Having Loss Mitigation Problems – maybe we should talk?

If you are a homeowner that is tired of dealing with the run around from the banks or loss mitigation errors and not sure how to make them aware of their mistakes – let’s set up a time to talk. Meeting with an attorney can be very helpful to you. I pride myself on being easy to get to. You can reach me 3 ways: (1) call my office at 813.502.6768, (2) e-mail me at my firm – we’ll get you set up for a time to speak to me; or (3) schedule a consultation by using my online platform.

1 thought on “Loss Mitigation Errors – How to Fight Back when Banks Make Mistakes”

  1. Thanks for the good info.
    Yeah, Seterus requested tax returns and profit and loss statements for my company, then after all that stated they never used it but used “other” criteria to deny my application for a modification.

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