Loan Modification:
why the paperwork restarts, and who can break the loop

Eleven submissions of the same documents

You fell behind on your mortgage after an illness. You asked for the loan to be changed so you could afford it.

Two years later you have sent the same documents eleven times and the house is in foreclosure.

Two years of starting over

1. You applied to have the loan modified.
2. You sent bank statements, pay slips, tax returns and a hardship letter.
3. Something was missing, or unreadable, or received too late.
4. You started again. Documents expire after a few weeks, so the earlier ones were stale.
5. You were given a trial payment plan and made the payments.
6. The person handling your file changed. The new one had no record of the trial.
7. The application was denied. Foreclosure continued the whole time.

Why documents expire faster than the review takes

A modification application is a moving target. Documents expire faster than the review takes, so the file is never complete at any single moment.

Foreclosure and modification usually run in parallel rather than one pausing the other. Being in a review does not stop the clock, and many people believe it does.

The single point of contact is often a role rather than a person, and files change hands without the history following.

Why nothing in your bank account changes this

Nothing in your bank account. This is a documents-and-deadlines problem, and no view of your money changes it.

Where Plenee fits

Very little on the outcome, and it is worth saying so plainly. An app does not make a servicer approve a modification.

Three narrower things:

• The trial payments are provable. Plenee holds the dates and amounts of every trial

payment you made, which matters when a new case handler has no record of them.

• The hardship is documentable. A modification application asks for income and

spending. That is exactly what Plenee already holds, in a form you can export rather than reconstruct.

• The earlier warning is the real help. Most of this starts with a few missed

payments. Seeing a shortfall coming a month out is where the cheap options still exist.

Once the loop has started, this is a case for a housing counselor, not software.

Where a housing counselor can help

• Use a free housing counselor. They are funded to do this, they know which document

is missing, and they can often reach people you cannot.

• Send everything by a trackable method and keep the receipt. "We never received it"

is the most common reason a file restarts.

• Ask for the denial reason in writing, and ask what would change it. Denials are

sometimes based on a figure you can correct.

• Ask whether foreclosure can be paused during the review. Sometimes it can, and it

will not happen unless you ask.

How often modification appears in mortgage complaints

Borrowers struggling to pay are one in seven mortgage complaints, the second largest category for the product.¹ More than half of those complaints mention a modification.²