Most Common Loan Modification Delay Tactics

April 2, 2010 - Lending institutions have many tricks up their sleeves when it comes to loan modifications. Many homeowners follow the loan modification process in good faith, anticipating that their banking institution will do the same. However, your lender may have reasons for not wanting to modify your home loan, and may use delay tactics to stall the process.

Under the federal government's program, the Home Affordable Modification Program (HAMP), every homeowner must go through a 3-month trial period. Delay and stall tactics are common during this process, and can be encountered even before the trial period begins. Whether you are modifying your mortgage through HAMP or the private HOPE NOW program, these are the 2 most common delay tactics:

• The lender says deadlines were missed. In applying for a loan modification, there are several deadlines that must be met on time. Forms must be filled out and filed on time with your lender. In some cases, banks say they didn't receive the forms at all, even though the homeowner has met the target deadlines.
• The lender doesn't credit payments. During the HAMP trial period, homeowners must pay a reduced payment on time, every month. If they don't, they may not quality for a permanent loan modification. The bank may not properly credit the payments, which puts the whole process in jeopardy.