As anyone who has tried to secure a loan modification can tell you, the process is not easy. On more than one occasion, I have referred to it as "Kafkaesque." While there are some well-intentioned employees in the loss mitigation departments at many banks, many just don't really care.
Last summer, I wrote about Bank of America's new online portal for accepting loan modification documents. It turns out that Bank of America occasionally sends our loss mitigation department emails with useful tips for submitting loan modification applications.
Since most people probably don't receive these emails, here are the highlights:
1. Always use the Hope Loan Portal (www.hopeloanportal.com) to submit your documents. Fax remains B of A's second line of communication. Let's face it -- it's much more difficult to lose documents that are faxed in. Bank of America has been notorious for losing documents in the past. Using the online portal at very least removes the human element from the equation.
2. Always submit a complete package. This is very important. When the bank has to ask for additional documents, you increase the odds that previously submitted documents go "stale" before you can get the additional documents submitted. I normally avoid cliches, but, "measure twice, cut once," is a good policy in this regard.
3. Call the bank every 7 days for updates on your file. Not only is this common sense, but it also creates a paper trail. How does it create a paper trail? Because you should be logging every call you make to the bank on your own paper. Write down the date and time of your call. Also note the name of the person to whom you spoke and that individual's ID number, if applicable.
4. If you receive commissions or bonuses, and your paystubs show this, then you need to submit a letter that explains these entries. The bank will want to know how often you receive these payments. Are they weekly? Monthly? Quarterly? Yearly? Banks count those payments as part of your income, so it is very important that you are clear about how often you receive them.
Applying for a loan modification is a lot of work. Following these tips will hopefully save time and effort.