I had a loan modification then the loan got transferred and then new company is refusing to honor the loan modification. What do I do?
General rule on loan modifications when transferred
This is because your loan is a contract. If it is truly modified, then whoever gets that loan (that contract) must follow it.
What should you do if this happens?
My suggestion is to be very aggressive on this so you can get it fixed and so that the new mortgage company can’t argue (it would be wrong but still….) that you somehow have agreed to them not honoring your loan modification.
You can send letters under RESPA (Real Estate Settlement Procedures Act) — notice of errors and request for information.
What are these RESPA letters?
Basically where you give the mortgage company a chance to fix their error and explain themselves, or they can get sued in Federal Court for money damages.
We cover this in our comprehensive free video series on saving your home from a foreclosure at www.ForeclosureDVD.com. We only encourage you to go to this site if you are willing to work hard to fix the problem.
Can I sue my new mortgage company for violating the modified loan?
Usually you can if they take some negative action against you that violates the contract. For example:
- Refusing to accept payments
- Changing the amount that is due
- Reporting you late on your credit reports when you are not
- Threatening to foreclose
- Actually foreclosing
Some of these you may can sue immediately. Others may require you to send a RESPA letter or a letter to the credit reporting agencies under the FCRA (Fair Credit Reporting Act). Normally we recommend even if you do other letters, you should send RESPA letters.
These letters will allow you to sue your mortgage company if it refuses to follow the law for up to $2,000 per violation. And normally when we sue we are suing for multiple violations. And you can get actual damages and your attorney fees paid.
If you have questions, give us a call at 205-879-2447, especially after you watch the video series on preventing a foreclosure at www.ForeclosureDVD.com.