Thursday, September 05, 2013

Ocwen And The Loan Modification That Wasn't

Ocwen’s motto is, “Helping homeowners is what we do.” I suspect the motto is true for the small percentage of homeowners that fit Ocwen’s desired profile. We didn’t. The house in question is no longer lived in by me due primarily to a divorce. We now rent out the property which has two existing loans on it. The house is worth less than the amount of the loans. We are, as they say, upside down.

I prayed very much about the house as it is a large financial burden. Based upon significant counsel the first plan was to do a short-sale. However the banks desire that first you try a loan modification. To be eligible for a modification the first thing you have to do is miss a payment. We did that. We then applied for a loan modification with both Ocwen and Wells Fargo. Then it begins; the banks assign you a representative that tells you what hoops you have to jump through. For my ex this meant creating a P&L statement. For me the paperwork was easier. None the less we filled out all the paperwork and set up numerous phone calls with each banks representative. Each one would tell us the next step and then schedule a follow up meeting. This process went on for over six months.

For over six months I dealt with the banks and with the ex-wife attempting to get a loan modification. In one of the last phone calls with Ocwen our representative, that has a significant Indian accent (I believe the calls are all outsourced), informed us that I needed to sign over a quit claim for the property to my ex wife. I told him I would need to check with my attorney and my CPA before making such a commitment. He scheduled a follow up call. At the follow up call I advised him that I was not going to quit-claim over the property as there were significant tax and liability issues associated with it. He barely blinked (this was the sense I had) before saying that this was okay and the loan modification would now be looked at in-house by Ocwen rather than attempting to go under the government program. He said that he felt positive about the outcome. And…we scheduled another follow up call for one week later. I was certain we would finally hear the outcome or the bank would request our first born. Meanwhile Wells Fargo continued a similar process on a smaller scale.

Both loan modifications were denied. We were informed by both banks that they would have been approved had I been willing to quit claim the house over to my ex-wife. Shortly thereafter I spoke with a property attorney. Apparently the rigmarole we experienced is common. The outcome is usually the same.

The law states that a bank cannot foreclose if you are in the process of a negotiation. The minute that Ocwen informed us that the modification was denied they put us into foreclosure.

Had we been residence of the home we would have had a better chance for the modification to go through as we would have had we still been married. We were neither.

Throughout the process loved ones and I felt that God was leading though it was only one step at a time. Thrown into foreclosure the ex fought against a short-sale though it seemed the logical next step. God graciously provided the funds to pull it out of foreclosure. Our plan now is to hang onto it in hopes that property values go up enough soon enough to sell it via normal channels. So it is that we are back at square one less some fees and penalties and a slight ding on our credit score. We didn’t fit the homeowner paradigm; and this is the story of the help we got.

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