In a blog post a little while ago I mentioned the fact that one of the 5 greatest challenges facing a homeowner applying for a loan modification is the fact that they don’t have a single contact point at the bank who they can deal with.
Lost in a maze – Many consumers have stated that they feel entirely lost in a bureaucratic maze when attempting to secure assistance from their banks. It is unacceptable in my opinion that people should feel so helpless over an issue with is of such incredible importance, especially when it is so easy to make the process a great deal simpler. When you apply for a mortgage in the first place, you have the benefit of dealing with one point of contact. When you try to modify your loan in an attempt to save your home, you are often given an endless run around. Where is the sense and ethics in that?
Double-standards in business conduct – In 2007, there were numerous cases in which banks would sent mortgage brokers to a client’s home on a Saturday, and by Monday the client’s home mortgage loan would be approved. This often occurred with very little documentation in place. When those same clients now need to have those loans modified, the waiting period is ridiculous, and the amount of required paperwork suddenly becomes a great deal more burdensome. Documents are often lost or misplaced. The key here is to work thoroughly and smartly. Keep a record of every piece of documentation you provide your bank with. If they make a request for the same information, ask them to recheck their files before you resubmit the documentation in question.
High turn-over of key bank personnel – Another issue that is being reported by a number of homeowners is the fact that so called “relationship managers” at banks are getting burned out due to stress and workloads, and they need to be replaced with new staff. This can often leave the homeowner with the frustrating situation of practically having to embark on their loan modification application process all over again. It’s apparent that the inefficient systems that banks have in place are of little benefit to staff and customers alike. Banks need to take responsibility for implementing efficient systems that are aimed at providing homeowners with real help and hope.
Here are a few things for banks to consider:
- Stop messing people around and wasting their time and money
- Evaluate loan modification applications as soon as possible and let people know if they pre-qualify or not before burdening them with tons of paperwork and fees. With a confirmation that a client qualifies for loan modification, the income and debt validation process can appropriately begin
- Quit screwing around by failing to convert trial loan modifications into permanent ones. Too many people have been toyed with in this way. Can you explain why this is the case, Mr. Bank?
- Provide the applicants with loan modification terms of agreement as part of the TPP (trial period plan). Don’t wait until the TPP is over. People have the right to know what they will be committing to at that point. We are not in the dark ages! People should be treated with dignity and be allowed to understand the consequences of the decisions that they are making. These are the same people who you provided over-priced loans to a few years back, remember?
As banks hopefully step up to the plate increasingly and provide struggling homeowners with tangible assistance and guidance, we may perhaps begin to witness a turn-around in this awful housing market crisis.