Loan Modification is Broken..

First of all, I’d like to state how entirely demoralizing it is to seek financial assistance, but the way banks are handling the loan modification programs is a complete embarrassment for all parties involved.

Having both established lucrative careers at the same company, my wife and I were confident in deciding to purchase a new construction home.  After a year and a half though, we both found ourselves laid off and without income.

We immediately hit the streets, looking for anything we could.  My wife found a job making around 60% of her salary.  I on the other hand, found it a bit harder, and had to rely on unemployment until I could get my own IT consulting business going.

We decided to apply for  a loan modification due to our extremely decreased income as well as homes in our neighborhood still being built for around half what we paid (for the same model), thus lowering our home’s value dramatically.  We were stuck, couldn’t sell,  and had no where else to turn.

We initially applied in October, 2009 and were declined within 10 days for the reason of not making enough money.  (This seemed ironic, as this was the precise reason we applied in the first place.)

After drumming up a few clients and launching my business, we decided to try again in early November, 2009.  We were offered a trial payment plan for 4 months and told to make these payments and that a decision would be made.

Each and every month I would call to check on our lender to see if any progress was being made, and each month would be told to keep making trial payments, and that they were backed up.

After the first two months, we began receiving phone calls from our lender that we were delinquent and our loan was in default.  It turns out that because none of the departments in this giant conglomerate company talk to each other.  Our smaller payments than normal (Trial payments) were showing in the main system as shorted and thus we were behind on our mortgage.  Our credit reports were literally being raped because of paying exactly what our lender told us to, and exactly when they told us to..

It took quite a few phone calls to get these departments all on the same page, and a lot of headaches before finally getting our credit reports straightened out.

Finally,  early in the morning on April 24th 2010, I received the call we had been waiting for.  We had been approved for a loan modification and would be receiving paper work in the mail with instructions and forms that needed to be filled out within 1 week.

Upon receipt of these papers, I was confused to see that the paperwork read as if we were declined for our loan modification.  Further investigating showed that the reason for the denied modification was “Reason 11: Incomplete submission”.  This was extremely frustrating as we had gone to great lengths to make sure everything was correct and complete the entire process.  They were instead offering us a program called “Alternative Modification”  Our payments were less than our trial payments to start with, then would gradually increase throughout a 9 year period then be steady for the remaining years of the loan.

The modification was using a deferred principle method, which takes a chunk of the principle and places it at the back of your mortgage, tax and payment free.  You still have to pay it, but you save on interest.  We were still optimistic about this type of modification and only had a few questions.

When I finally got ahold of the loss mitigation department to ask my questions, I was told that everything was correct, and we had nothing to worry about.  The one question they couldn’t answer is how we were supposed to pay off the deferred amount at the close of our loan, but they promised to notate and that if we called back an answer would be in the system from a supervisor.

Upon contacting our lender to retrieve this answer, we were told that the paperwork we recieved was an error, and that they had sent out the incorrect paperwork to 45,000 customers.  I was to shred the papers I received, and would be receiving another packet within 10 days.

How could a bank have screwed up 45,000 loan modifications in a single day and it not be reported in every news paper around the country?

It is my hope that someone in power sees this and makes sure this doesn’t happen again.

Industry Advice.. From a customer..

Running my own business has taught me a ton of things.  I’ve learned that being your own boss, really means that your customers are your boss.  At some point, businesses are forgetting that little fact and they have really began to stop caring about what the consumer thinks.

This idea that if a company gets to a certain level of success they can begin telling consumers what they need / want, is rather annoying.  This ideology also leads to the decline of a customer’s experience from a “level of service” position.

I’ll paint a picture using a personal example I’m dealing with literally as I write this entry.  I am working with several vendors for a new customer of mine that happens to be a brand new company setting up their brand new office etc.  The typical needs of any business are the same , phones , lines , internet etc..

Having called a few places to order a Phone System that would be compatible with another office that already has a system in place, I settled on a company.  We’ll call this company “DayTel” for legal reasons.

Daytel assured me numerous times that my order was no problem, all of the parts could be ordered and in well before my install date and we would be good to go.  I gave them my credit card info for a 50% deposit and things looked great.  My install date was to be February 18, 2010.

Sadly I received a call on February 17, 2010 that the part was delayed and wouldn’t be in until afternoon on the install date, that we’d need to install on the following day.  “No big deal”, I thought.  Mistakes happen, What’s an extra day?  New install date? February 19, 2010.  This date rolls around and another call from DayTel.  It appeared there was another shipping delay and the boxes were out for delivery now via FedEx.

So we have another delay here, few hours, I had other things to do so it didn’t bother me too bad, until it came to light that the box was delivered too late for an installer to come out and we’d have to push the install date back to Monday the 22nd of February.

With a deep sigh, I accepted this fact, and was assured everything would be checked out on Friday and 100% ready to go on Monday.  I slept easy that weekend, at least knowing the system had arrived, was being checked out, and would be installed on Monday, 9AM Sharp!!

Which leads us to Monday..   Monday morning was a very rainy miserable day, so I gave the installer the benefit of the doubt not being on time.  At around 9:15 I called just to be sure we were still on, to which I was assured everything was on schedule.  The next thing I knew, 10am rolled around and I was answering a phone call from DayTel.  Apparently they unboxed the system today and there was a missing part.  They took the “liberty” of ordering it and having it shipped overnight..  They really made it sound like they did me a favor in ordering my part for me.

I don’t have an ending to this story yet, but the point is, companies stopped caring about their customers at some point.  We as consumers have begun to accept the fact that we are going to get shitty customer service.  Until we start fighting back against this corporate attitude, I only see it getting worse…

So, where does that put me?  I guess it puts me back to the title of this post.  My advice, which is to the industry leaders out there, not to the consumers, I say “FIX THIS!!”  When we do wise up, we’re going to strike back, and we’ll strike back hard and fast, and you will be left cleaning up a huge mess.  It would be much more cost effective and save your companies so much face to just make your customers experience your number 1 priority… And that is all for the moment..

Hello world, and so it begins..

I’ve made the decision that the Internet has felt empty since my blog went offline..