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Saturday, May 8, 2010

Loan Modification Coming to an End?

[This post is written and copyrighted by Financial Elite (http://financialelite.blogspot.com/ ).]

Last week I received a call from the home retention department at Bank of America asking for updated paystubs and a hardship letter, which we promptly sent up, for our loan modification. Previously, we had sent up copies of our bank statements, paystubs, 2 years tax returns, and utility bill. So for them asking for updated stubs and a hardship letter I am feeling like the process may be coming to an end.

We also received a letter from the bank that they had to notify us that our loan had been transferred to a new creditor. It also states that, "your prior creditor transferred your loan to us," which I guess that means back to Bank of America.

It is common practice for a loan to be sold to other creditors after the loan closes. Our loan was originally originated by Bank of America, but was probably sold and Bank of America remained the servicer. The difference between a creditor and a servicer is:
  • The creditor owns your loan.
  • The servicer collects your mortgage payments, sends you billing statements, and provides the day-to-day administration of your loan as contractor on the creditor's behalf.
I am not sure if this is a good sign or a bad sign. Is the bank wrapping things up for approval of a loan modification and do they now have full control over whether they can choose to do a loan mod or to just foreclose.

Has anyone experienced this before as part of the loan mod process? Have you successfully received a loan mod or been declined? Let us hear from you.

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