Florida Bankruptcy Law Blog –

Do not think your nightmare is over because you have signed and returned a permanent loan modification. Loan servicers are notorious for failing to honor permanent loan modifications. In our experience, they’re all bad, but Bank of America is the worst.

Here’s how to improve your chances of getting your loan modification honored:

First, meticulously follow the instructions provided with your loan modification. No matter how nuanced and ridiculous the instructions are, follow them exactly. For example, one servicer provides a sheet titled “Instructions for Notary,” for which there are multiple versions, but some require any months to be spelled out. If you write “Dec.” or “12” instead of “December,” the servicer will tell you months later that you have not entered into a loan modification because you did not follow instructions. This is obviously a bad faith attempt to collect additional payments from you before foreclosing on you, but nonetheless, you must not give the servicer reasons to do so.

Second, make your payments distinctly identifiable to the modified payment. If you are paying by check, write in the memo line, for example, “June 2014 loan modification payment.” If you are paying by phone (because your ridiculous servicer requires you to), insist that they note the “June 2014 loan modification payment” information on your account. This can be crucial to successful litigation later. Your servicer will later defend your lawsuit on grounds that it never signed and returned the agreement (“statute of frauds” defense). Well, by following this advice, you are creating the “partial performance” exception to the statute of frauds defense.

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