Mortgage Modifications An Unforgiving Process

The mortgage modification process appears to be highly unforgiving. Any little thing can derail it, including a single misplaced digit.

Our story comes from Charles, a homeowner from Hanover Park, Ill., seeking a mortgage modification through Chase, and two and a half years into the process of trying to save his home.

“This past February I started a home modification trial period, which would run from February to April,” Charles told ConsumerAffairs.com. “I made my last payment in April of this year and every time that I called to make my payment they would verify my last four of my banking account number, except for this last time, they ask for my routing number along with my bank account number.”

Charles said a Chase representative read the number back and he verified that it was correct. He assumed everything was on track to finalize his modification.

Don't worry, everything's fine

“Well, after three days I noticed that they hadn't taken the money out of my account so I called Chase Bank, and they said that they have received the funds and everything looks find and I should hear from them very soon concerning my new modification,” Charles said.

But days later Charles noticed the funds for his last trial modification payment had still not been transferred. He said he immediately called his contact at Chase.

“They said that the bank rejected the withdrawal,” Charles said. “After going back and forth with Chase Bank and after their investigation, they said that the routing number was correct but my bank account number was incorrect.”

It turns out Charles's bank account number was wrong – by one digit. Therefore, the money could not be moved from his bank account to make the mortgage payments, meaning he was delinquent.

“They told me that there was nothing that they could do except to try to escalate the issue,” he said.

Charles said because his payment was “late,” his modification was denied, and he was told he would have to make up the amount that was discounted from his mortgage payments during the trial period or face foreclosure. He had gone from being one payment away from a modification to the prospect of losing his home.

The government has recently announced its intention to make the modification process more helpful to homeowners who have a good chance of salvaging their situation. A good start might be to find a way to prevent a bureaucratic error from forcing an otherwise qualified homeowner into foreclosure.