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WASHINGTON — Having trouble paying your mortgage? To find out if you qualify for a loan modification, you'll have to work with a loan servicer — the company that collects your mortgage payments.
But dealing with these companies can be frustrating and confusing, says Diane Thompson, an attorney with the National Consumer Law Center in Boston.
"People have always gotten lost in call waiting," Thompson says. "You'll routinely have people hang up on you, and you'll never reach the same person."
Thompson offers these tips for working with your servicer:
— Keep careful written records of every contact you have with your servicer, including logs of your phone calls and copies of written correspondence.
— If your servicer makes a promise — to credit a payment or modify your loan, for example — get it in writing. "People should believe nothing that's not in writing," she says. That includes promises that a foreclosure sale will be stopped.
— If you've received notice of a possible foreclosure sale and your servicer later says the sale has been halted, show up at the scheduled time anyway. Many borrowers have had their houses sold without their knowledge.
— Your servicer is required to send you a hard copy of your complete payment history and other information. You just need to request it in writing. If you have a dispute with your servicer or want to understand fees you're being charged, write to the address on your mortgage invoice labeled "qualified written requests" or "RESPA requests." RESPA is the Real Estate Settlement Procedure Act, which governs servicers' responsibilities to homeowners.
— If you're seeking a loan modification, request in writing that your servicer tell you who owns your mortgage loan. Some banks and investors have policies on which loans they'll modify. So having the record will keep your servicer from arguing they can't help you because the investor refuses to modify the loan.
— If you don't understand something, deal with it immediately. Write to your servicer, explaining your concern, and request an explanation. You also can call the servicer to seek a speedy resolution. In any case, put all communication in writing in case you need to refer to it later.
— If your servicer tells you to stop making payments because you've applied for a loan modification, ignore that guidance. Keep making payments for as long as possible. If you can't make full payments, pay as much as you can. Otherwise, your loan will accrue more interest, and it will cost you more in the long run. Many servicers have been accused of going ahead with foreclosure after telling borrowers not to pay.
— If you can't resolve your problems or you think your servicer is violating your rights, contact a nonprofit housing counselor or seek legal help. Housing counselors will help negotiate a loan modification for free. Be wary of services that offer to renegotiate your mortgage in exchange for an upfront fee.
If you want to know whether you qualify for a loan modification, check out Treasury's homeowners Web site: http://www.makinghomeaffordable.gov.
