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Lenders Continue to Blunder Loan Modifications

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At Graham Legal, we have long advised homeowners of the importance of seeking out the expertise of a Miami foreclosure defense attorney when in need of a foreclosure alternative, such as loan modification. The foreclosure crisis is years behind us, but lenders continue to make costly errors when handling alternative resolutions. Our firm recently successfully concluded a foreclosure case that further demonstrated this, which involved a homeowner/borrower who had been stuck in the “pending” phase of the foreclosure process with Bank of America since 2011.

A Case Finally Closed

On September 26, 2015, Bank of America sent time-sensitive documents approving the borrower for a permanent loan modification. Unfortunately, these documents were mistakenly sent to the wrong attorney, an oversight by the bank that proved costly for the homeowner. By the time the documents reached the borrower’s hands, the deadline for returning the signed documents had passed. As a result, the lender refused to accept the signed permanent loan modification documents from the borrower, despite the fact that the lender was at fault for the delay. We call this kind of behavior “servicer sabotage,” and it directly infringes on the rights of borrowers.

With the trial date just a month away bringing almost certain loss of the home, the borrower retained Graham Legal in July 2016. We went to work on a detailed motion to enforce the permanent loan modification, providing supporting affidavits. Then, we got the plaintiff’s counsel to agree to an order staying the action, pending Bank of America’s ratification of the 2015 permanent loan modification. Finally, the court entered the agreed order on August 1, 2016.

Following the order, Bank of America fired its attorney and hired a new one who claimed that plaintiff’s prior counsel lacked authority to agree to the order ratifying the loan modification. The attorney demanded that the homeowner pay all debts that had accumulated to reinstate the loan before the lender would accept the 2015 loan modification.

In March 2017, after seven months of negotiations, Graham Legal won the battle for the borrower when the lender finally approved the 2015 permanent loan modification agreement. In doing so, the bank deferred nearly $150,000 accumulated arrears (or money owed) to the end of the loan, interest free.

Believe it or not, when the lender sent the new permanent loan modification documents in April 2017, it once again sent them to the wrong defense attorney! However, this time Graham Legal was on top of the matter and quickly got the acceptance deadline extended.

A Lesson for Homeowners

This case demonstrates that homeowners acting alone are not only unlikely to successfully obtain loan modifications from lenders, but are likely to accrue additional debts by attempting to do so. While it may seem that the assistance of a professional is unnecessary as the paperwork can technically be filled out by oneself, the guidance of an attorney is invaluable.

Whenever the threat of foreclosure looms in your life, seek out the assistance of a professional Miami foreclosure defense attorney like Graham Legal, P.A. to protect your home and your rights.

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