I wanted to offer some serious advice and a does of reality to those who are suffering the loan modification process. I say “suffering” because it is in general a battle of nerves. (speaking from hard won experience)

The truth is that what is going on merits a Congressional investigation or if possible, a class action lawsuit, (if it can be determined that our taxpayer contribution to the banks gives us some rights of shareholders?) for bad faith on the part of many banks. Their general strategy is to deter, discourage, delay and threaten.

In the mean time, for those in this process, I advise this: notate all communications. Ask a lot of questions and say little. Ask them to clarify things in writing, or inform that you will write down their questions and respond to them in writing by mail or fax. Get the names of the people you are dealing with. Call after you send a fax to verify its receipt. Assume that they will ask you to resend everything two to three times, and try to deny that you send it. If you can get them to admit they received it, they will as a matter of course come back to you in a couple of months (up to four months) and tell you your modification has been denied because it is incomplete, and you must start over again. (They will not request that you send that one month pay stub you forgot.) You must be thorough, meticulous, and relentless to play this game. Remember, they have armies of bureaucrats to trip you up, and collectors to call you in broken English from Pakistan three times a day. (If you have an attorney, you can send a Cease and Desist letter). You must approach this like a court case where the best prepared and most persevering win. This is not a process for the faint of heart, and the banks know it. (one collector threatened to throw a recent window out of her lifetime home in the dead of winter, despite qualifying for a loan modification more than six months ago…sorry, but you may be beginning to get the picture.)
Remember also, if you do receive a modification, you will be asked to go through a three month probationary period with the reduced monthly amount, but may have to make at least one full monthly payment from the past due amount.

My general hope is that a day of reckoning with the Congress and the taxpayers will come for the banks and the dishonest practices, and I encourage anyone in media or the Congress, or anyone who can contact Congress or a major media source to take note of the contents of this letter, which can be easily verified, because the truth is not being told. Why is nothing being done in the Congress about this issue? Why has it not reached mainstream media. The banks have our money, are paying their executives million dollar bonuses, and are not dealing fairly and forthrightly with the taxpayer homeowners who have given them the money to survive. Congress must soon begin to look complicit in this fiasco of giving taxpayer money to private enterprise. (Let’s take it back if they are not going to perform.)

This is a story that needs to get out:

Today CNN reported “Congress is trying to ‘shame’ banks into performing on the home loan modification plan.” Would you loan someone a hundred billion dollars and rely on “shame” to make the other party perform? Would you tell someone you will “make efforts” to help homeowners if they were about to give you a hundred billion dollars? How can a Congress full of lawyers put taxpayers in such an absurd position? Is a class action lawsuit possible as taxpayers are the injured party?

If there is ever a story about the interaction of democracy and capitalism, or socialism and capitalism it is this:

While the Congress is providing failing banks with billions of our taxpayer dollars to help citizens stay in their homes, the banks are using every means to avoid acting responsively and in good faith, while simultaneously managing to pay themselves billions of dollars in bonuses, increasing their own salaries to defeat Congressional limitations on bonuses, and pursuing their usual agendas, all as though the bailout was some kind of no-interest loan that they could utilize however they saw fit in their own interest. The winners? Stockholders and executives. The losers? Homeowners. An inherent conflict of interest for the Board of Directors. How many modifications have been made by the banks? What does that benefit in value to the homeowners represent as a percentage of the taxpayer money provided to the banks?

The economy? To most it is their homes and their jobs.

While homeowners wait anxiously for six to nine months to even hear whether they will receive a loan modification the banks are engaged in the following bad faith behavior:

1) Repeatedly informing homeowners and their attorneys that documents have not been received after those documents have been sent repeatedly.

2) Continually harassing homeowners with up to three calls a day while homeowners are in the modification process.

3) Informing homeowners and their attorneys that internal or external regulations have changed and whole files must be resubmitted.

4) Failing to acknowledge attorney communications to homeowners while attempting to circumvent those attorneys to pump clients for information.

5) Providing no information on status to homeowners for months, and then foreclosing on them.

6) Attempting to offer limited solutions less costly to the banks while homeowners are attempting to request and receive modifications.

7) Denying a modification will be coming through or that it is realistically being considered and threatening foreclosure.

Interviewing any law firm dealing with the banks in this matter will verify the above information. I encourage all homeowners to get the truth out.