Bar News - June 21, 2013
Homeowner Counselors Have Direct Access to Lenders
By: Krista Atwater and Mary Stewart
We have all heard the story numerous times. Jane Doe Borrower falls behind on her mortgage payments due to unemployment, health issues, divorce, etc. She is unable to afford the full mortgage payment, but she can make lower payments over a longer period of time. So, she accepts the mortgage servicer’s offer to apply for a loan modification in an effort to avoid foreclosure.
Ms. Doe works directly with the loan servicer to obtain a modification. The servicer mails Ms. Doe a request for information and the substantial number of documents necessary to initiate the application. Ms. Does diligently assembles the package and returns it to the servicer as instructed.
Then, Ms. Doe waits a few days to allow the servicer to receive and process her application. When she does not hear back, Ms. Does calls for an update on the status of her loan modification application. The first few calls are inconclusive; the mortgage servicer provides no information. Finally, after a few weeks of multiple calls each day, Ms. Doe learns that her loan modification package was lost or incomplete or “stale.” The servicer instructs her to update and reassemble the information and documents necessary to initiate a loan modification application. Trusting that this is an anomaly, Ms. Doe dutifully updates her loan modification application and sends it to the servicer a second time.
What happens? The second application also is lost or incomplete or stale. At this point, Ms. Doe is facing foreclosure in less than a month and is terrified that she will lose her home.
There is a better way – HomeHelpNH.org.
HomeHelpNH.org is a statewide foreclosure counseling initiative to provide free assistance for homeowners at risk of foreclosure. The home ownership counselors are specifically trained in loan modifications and are generally familiar with other options available to borrowers, including a forbearance, short sale, private sale or deed-in-lieu of foreclosure.
A home ownership counselor works with a borrower to prepare the application for a loan modification. Once the package is complete, the counselor transmits the application through a direct portal to the servicer that tracks receipt of the documents. The result: No more lost documents.
Homeownership counselors are trained in the myriad modification programs available to borrowers. Their knowledge of the programs and options available is invaluable to the borrower deciding whether it is worth the time and effort to modify his or her loan.
In short, collaboration between the borrower, borrower’s counsel and a homeownership counselor decreases legal expenses for the borrower and increases the borrower’s chances of securing a loan modification.
Homeownership counselors are located throughout the state. To locate the counselor closest to you or your client, call 2-1-1.
Krista Atwater and Mary Stewart are contract attorneys working with the NH Bar Association Legal Services Department on the NH Foreclosure Relief Project.