Loan Modification Hell: New Solutions To Avoid Losing Your Home

Last Updated Jun 22, 2010 3:44 PM EDT

Don't miss the comments: Are You In Loan Modification Hell: Join The Club, Loan Modification Hell: Income Requirements For New HAMP Rules, and Loan Modification Hell: The Horror Stories Continue.
I've been hearing from more homeowners who are frustrated by the customer no-service they're getting from their lenders when they call to ask about a loan modification.

If you ask the government, you'll be told (as I was recently) that great strides have been made over the past two years.

It's true, but that's cold comfort if you're about to be foreclosed upon.

I had another conversation with my contact at the OCC today. He asked me to remind you that there are some specific steps you should take if you feel as though you've reached the end of the line with your federally-chartered bank and/or the HUD-certified housing counselor you've been working with.

Assuming you've already taken those steps, consider the following:

  1. File a complaint with the OCC's customer assistance unit. This page is part of the website that the OCC set up to deal with problems consumers have with the banks that are regulated by the OCC.
  2. Get the complaint confirmation/case number. Make sure you save it somewhere safe, where you can access it at a moment's notice.
  3. Wait 30 to 90 days. This is the tough part. The OCC's customer assistance unit is swamped, and while they'd like to get back in touch with 30 days or so, it probably isn't going to happen due to sheer volume. However, if you are in imminent danger of losing your home, you should write "URGENT" on your complaint, which will help it be elevated in the stack.
  4. If you don't like the result, appeal. My source at the OCC says many consumers don't realize they can appeal the decision of the lender through the OCC's customer assistance unit. But going through an appeal doesn't mean you'll get the result you want. Still, you will know that real people have evaluated your application at least twice, and I'm assured that if it's close, the OCC will push for you to receive your modification.
  5. If you still don't like the result, hire an attorney. Alternatively, you'll be able to stop a foreclosure (for some time) by filing for bankruptcy.
If you're in the URGENT/IMMINENT FORECLOSURE category, you can forward your complaint confirmation/case number to me (through email) and I will pass this along to my contact at the OCC to make sure you don't lose your home without a solid look at your application.

This isn't a magic bullet. It's one of a series of "backdoor channels" the government has set up to try to assist as many folks as possible.

And, you might not get the result you want.

Loan Modification Hell: More Solutions

My contact at the OCC tells me that there are a few other ways homeowners in extreme financial trouble might be able to get help:
  • Contact a non-profit consumer credit counseling group for help. Organizations like and the National Foundation for Consumer Credit can link you to HUD-certified housing counselors (or they have them on staff). If you tell them you're about to be foreclosed upon, the good ones will step up to help. The best number to call nationwide is 888-995-HOPE.
  • Contact your local LegalAid Society. They are helping people save their homes every day.
  • Hire an attorney. You can try to sue on the grounds that the lender is not following the guidelines set forth by the government.
  • Go to a local foreclosure prevention housing event. The OCC and other government regulators are attending many of the larger events, like those sponsored by NACA. Upcoming events are scheduled for Washington, D.C. and California.
  • Go to your lender's local housing office. As of May, 2010, Chase has opened 51 Homeownership Centers across the country to provide one-on-one housing counseling for its borrowers. The company is also setting up multi-day foreclosure prevention events in eight markets.
Millions of homeowners are in the temporary loan modification hell pipeline. Let's see if we can get a few more turned into permanent loan modifications.

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Ilyce R. Glink is the author of several books, including 100 Questions Every First-Time Home Buyer Should Ask and Buy, Close, Move In!. She blogs about money and real estate at
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    Ilyce R. Glink is an award-winning, nationally-syndicated columnist, best-selling book author and founder of Best Money Moves, an employee benefit program that helps reduce financial stress. She also owns, where readers can find real estate and personal finance resources.