Loan Modification & Foreclosure New Guidelines To Speed Up The Process
To better streamline both loan modifications and foreclosures, a set of guidelines have been imposed on banks which need to be met by mid June. U.S. regulators are looking for a better plan and process to manage the volume of loans in trouble.
One of the biggest changes will be a single point of contact eliminating the frustration of calling your lender only to be told the person you are talking with just got the file and are not yet up to speed. This is probably one of the reasons it has taken so long to get a file through they system.
In addition, the banks will be required to provide a deadline as to whether a loan modification is even possible. Some loan modifications have take up to 6 months to get a decision and there have been cases while going through the loan modification program, home owners have been foreclosed on. This is an example of one department not know what the other depart is doing?
On the forefront are banks such as J.P. Morgan (Chase) and Citigroup that are revamping their foreclosure and loan modification processes:
- Chase is developing a software program to make it easier for employees and borrowers to track loan modification requests. It also has started providing borrowers with a “relationship manager” to help navigate the loan modification or foreclosure process.
- Citigroup, which already provides a single point of contact, says in the next few months it’ll debut a “concierge” system that will provide a small team of employees to guide delinquent borrowers and home owners at risk of default.
- Wells Fargo has really sped up their decision making process providing borrowers with a decision 5 days after a loan modification request is submitted.
In an effort to prevent foreclosures some lenders will be proactively contacting homeowners who miss just one payment. While it may be that a loan modification is not the answer, perhaps the lenders can advise the borrowers on the best approach to avoid foreclosures such as implementing a short sale.
Filed under: Real Estate
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