When an individual in Florida encounters difficulty in making his or her mortgage payments, the response is often to seek assistance from the lender. In many cases, loan modification programs can help struggling homeowners to regain their financial footing and save their homes from foreclosure. Many borrowers rely on these programs to assist them when they encounter financial difficulties, but in some cases, the safety net they had hoped for simply does not exist.
That was the case for one woman who was denied a mortgage modification after she became disabled. The woman suffered a disability that made it impossible for her to work for a period of several months. During that time, she made her loan payments by using her savings. However, she sought the assistance of a loan modification program offered by Bank of America in order to ensure that she would be able to continue paying on her loan.
Specifically, she sought a lower interest rate, or some other type of modification that would help her to afford to keep her home while she recovered from the financial ramifications of her disability. She provided the bank with documentation from her employer and physician, as well as copies of a recent medical bill. Bank of America, however, refused her application, stating that she failed to provide adequate information concerning the nature of her injury.
The woman sued, and was recently awarded $22,449 in damages from Bank of America. The majority of the award will go to cover the closing costs on a refinance loan, with the remainder paid directly to the woman. As this case demonstrates, distressed homeowners in Florida and elsewhere who seek loan modification assistance are not always successful in obtaining the help they need. In some cases, filing for Chapter 13 bankruptcy would offer a more effective means of restructuring existing debt and retaining one’s home.
Source: ecreditdaily.com, “HUD: Bank of America Settles with Woman Unfairly Denied Loan Modification,” June 8, 2013