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The Four Parts of the LoanCare Mortgage Nightmare

The Four Parts of the LoanCare Mortgage Nightmare

The Four Parts of the LoanCare Mortgage Nightmare 150 150 The Law Office of Nadia K. Kilburn

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Recently, I’ve spoken with a number of homeowners who are struggling with LoanCare Mortgage. It’s clear that working with LoanCare has become a nightmare for borrowers. Here are the four parts of the LoanCare mortgage nightmare:

  1. Service Release Disasters: Recently, LoanCare has taken over the servicing rights to several large loan portfolios. This is called a service release or a service transfer. Unfortunately the recent service releases to LoanCare seem to be going horribly.
  2. I’ve been speaking with homeowners who were in the middle of loss mitigation reviews with their prior servicer when LoanCare purchased the loan. Suddenly, and unexpectedly, they have LoanCare in charge of their application.
  3. LoanCare is telling people that their files transferred and that LoanCare is just going to “pick up where the other lender left off,” but this isn’t happening. Instead, files are sitting stagnant in their system, not assigned to anyone and not moving forward. Documents are expiring and delinquencies / fees continue to accrue.
  4. The front-end representatives often don’t even have access to read the file notes to see what’s happening. So sometimes, homeowners can’t even find someone to tell them anything about what’s going on. When homeowners call to check on files, many are told that everything is fine and their file is “complete.” Despite these assurances though, nothing seems to happen and eventually – the homeowner gets the first foreclosure notice taped to their door.
  5. Many of the homeowners struggling with this service release problem previously had their loans serviced by ServiSolutions. ServiSolutions is the biggest bank that recently sold loans to LoanCare. These files, in particular, are not moving forward without aggressive intervention.
  6. CLIENT STORY: I recently worked with a client whose loan was service released from ServiSolutions to LoanCare in the middle of a loan modification review. After taking 45 days for the loan to be fully boarded into LoanCare’s system, they told the homeowner her modification package was “complete” and “in review.” 60-days later, when the homeowner received no communication from the bank, she called to check on it. She was told that there never was a modification review opened. She was also told that her file wasn’t assigned to any person in LoanCare’s system. She was then told that there was no record of her prior calls to them. Essentially, the file was just sitting there not moving, inching closer and closer to foreclosure. Fortunately, she qualified for foreclosure mediation so we stopped the foreclosure, brought LoanCare to the table and were able to submit a new package that got back into review and produced an approval decision.
  7. Astronomically Long Hold Times: If you call LoanCare in the middle of a normal work day, you can expect to be on hold for longer than 20 minutes, sometimes up to 45 minutes. You can assume that they do not have a proportional number of representatives to answer the phone based on the number of loans they bought so they’re just keeping everyone on hold, hoping people get tired and hang up.
  8. CLIENT STORY: I had a client needing a payoff statement to complete the sale of her home. She just needed a document telling her how much she owed in full so she could complete the sale of her home and avoid foreclosure. She ordered a payoff statement per LoanCare’s procedure three times, three weeks apart. No payoff statement came. When she would call to check on it, the automated phone tree would ask her the same question repeatedly and after answering the automated question five times, the phone tree would disconnect her. Frustrated and unable to speak with a live person at LoanCare, she called for help. We were able to escalate the matter to a supervisor, resolve the issue, get the payoff statement and close the sale of the home.
  9. Random Voicemail Transfers: Many people are finding that after waiting on hold for a long time, they are automatically sent to a random voicemail without being given an opportunity to decline being sent to voicemail. It happens quickly and the representatives completing the transfer do not give you an opportunity to speak before they send you to voicemail. The representatives are saying that they will “put you on hold” but instead, they quickly pull the rug out from under you and transfer you to a voicemail.
  10. Time Wasting One-Off Document Requests: If you have any sort of loss mitigation package in review for a decision (modification, repayment plan, short sale, deed in lieu), it is almost guaranteed that after you submit the required documents (no matter who your lender is), the lender will want something else or have a question. This is normal. All lenders are guilty at times of requesting additional items one at a time instead of all at once so this isn’t a problem specific to LoanCare but I mention it here because LoanCare is being particularly bad at getting additional document requests out in a cohesive manner. Additional document requests are coming one at a time, sometimes on back to back days. So, if you have any sort of loss mitigation review going on, you need to be calling them every day in order to ensure that no additional items come due.

How To Use Mediation To Resolve Your LoanCare Issue

In Washington State, LoanCare is one of the lenders that is required to attend Foreclosure Mediation, if you file during the eligibility time frame. Through this process, many of the above issues have been resolved.

Mediation gives homeowners and their attorney direct access to a responsible party at LoanCare. Through Mediation, there is protection against foreclosure and a heightened amount of attention paid to the file as LoanCare is forced to meet certain response deadlines.

(Most recently, several clients who were service released from ServiSolutions to LoanCare got back into loss mitigation review review within three weeks of the service release and two have produced loan modification approval.)

How To Work With LoanCare if You Don’t Qualify For Mediation

Not all of my clients qualify for mediation with LoanCare. In that situation we use the following plan of action, which you should try if you don’t have an attorney:

  • Open as many escalations as possible
  • Compile a list of supervisors who are able to actually effectuate change
  • Refuse to hang up until you have a third-tier supervisor on the line
  • Call almost daily to make sure the file notes don’t slip to the bottom of LoanCare’s record
  • Record calls so that you build a record of how LoanCare is communicating to use as leverage should they continue to let files sit stagnant.

It is very unfortunate that the mortgage servicing industry is allowed to operate in such a disorganized manner. It is incredibly hard on homeowners when they are forced to take time out of their already stressed and busy lives to clean up the messes created by faceless, profit-seeking corporations.

If you are in Washington State, and would like assistance with your case, please reach out to me so that I can learn more about your situation and see if there is any way that I can assist.

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