Dear Mortgage Company...

UPDATE 2011-08-20: I just got a call from Seterus saying that I've been approved for the modification and they sent out the final documents on Thursday! Thanks to everyone who offered advice and kind wishes.

Following is a letter I just sent to my mortgage company. It pretty much speaks for itself (some things are redacted for my own privacy).

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To: Seterus, Inc. Fax: 877-371-7799

Attention Customer Service:

Subject: Loan # [REDACTED]

Matthew A Orlando [REDACTED]

August 2, 2011

This is a “qualified written request” under section 6 of the Real Estate Settlement Procedures Act (RESPA).

I am writing because your organization has utterly failed to live up to its obligations and has denied me a modification based on false information. First some background:

My wife became unemployed in 2009 and we fell behind on our mortgage payments in the beginning of 2010. At this time our loan was serviced by Chase. Around April 2010, we applied for a modification, and were approved for a trial period for the July, August, and September payments. The modification was scheduled to be finalized on October 1. In September, however, I got a letter from Chase informing me that the loan would be transferred to your company (then IBM LBPS, now Seterus).

When I received information about the transfer from your company, I called to make sure the modification was still in the works. I was told to continue making the trial payment and things seemed to be moving along. In January, I was informed that we were approved for the modification and that documents had been sent out. I still hadn’t received anything by February when your automated dialer started calling me every week for being behind on my payments.

Every week for months I talked to someone and told them I had not yet received the documents. Every week for months I was told they would look into it. I spent a few 40-60 minute calls being transferred between different departments, all telling me they would look into it. At one point someone said “I see this message was sent to <so and so department> but they never did anything with it. I’ll try to get that moved along.” Every. Single. Week. For MONTHS.

You guys gave me this runaround for MONTHS. From February through late May it’s the same thing. Calling to collect on a debt, wondering why I haven’t sent back my documents, even though I told you repeatedly and persistently that I had not received them.

Let me spell it out one more time since it didn’t seem to get through:

I NEVER RECEIVED MY FINAL DOCUMENTS FOR THE APPROVED MODIFICATION

But wait; there’s more!

Around early June, I got my weekly “you’re behind on payments call.” I was told that at this point, because so much time had passed since the initial application, they would have to open a new file for me. This was downright insulting. YOU failed on your end and now I had to start the process all over again with the chance that it wouldn’t be approved.

True to my worries, the modification was declined with the excuse (paraphrased) “Your monthly mortgage payment including principle, interest, taxes, and insurance is less than 31% of your gross monthly income.”

[Ed. note: Using variables here instead of pure redaction so it makes more sense]

Let’s do some arithmetic here. My annual salary is $[12a]. Divide that by 12, you get $[a] per month (I listed $[a] as my monthly income on the Request for Modification form). What’s 31% of $[a]? The answer is $[0.31a]. What is the monthly mortgage payment listed my statement including principle, interest, insurance, and taxes? $[0.33a]. Which number is greater: $[0.31a] or $[0.33a]?

[Ed. note: yes, a is a positive number]

Given the above, I demand that you re-instate the modification trial period and send me the final documents no later than November 1, 2011. I would also like a written letter of apology for all the abuse I’ve received in the face of my good faith efforts.

I understand that under Section 6 of RESPA you are required to acknowledge my request within 20 business days and must try to resolve the issue within 60 business days.

Sincerely,

Matthew Orlando