If Ruth’s case is any example, Nationstar’s, doing business as Mr. Cooper, loss mitigation program stinks. She reached out for mortgage help nine months ago when she lost her job. As a result of her job loss, her income spiraled downward from what she received when employed, to what she received from unemployment compensation, making her regular monthly mortgage payment unaffordable. She was hoping that Nationstar to would put her in a program tailored to provide unemployment assistance.

To her surprise, the Nationstar representative told her that she didn’t qualify for any program since she was current in her payments. In other words, she was directed to stop making payments so she could qualify for relief. Even though she was hesitant, Ruth did as Nationstar suggested. Several months later, Nationstar provided her with paperwork to complete. Then the real nightmare began.

Ruth completed the paperwork Nationstar requested, and was then told more information was needed. Then she was told that what she had sent in, “was never received”. This cycle continued for almost six months. Presently, Ruth is seriously delinquent in her payments. Nationstar has denied her all relief, except the possibility of a “short sale”, where she would walk away from her home, or a “forbearance plan”.

The forbearance plan requires that Ruth pay only $50 per month. In exchange, Nationstar commits to refrain from foreclosing on her home during the eight month forbearance period. The problem is that at the end of that period, Ruth will be required to make up the missed payments in full, a total of $8,000, and resume her regular monthly payments.

In addition, Nationstar will report her as delinquent each month during the period, inflicting serious damage to her credit, and putting her in a position where she will not be able to escape her loan with Nationstar by getting refinancing at another lending institution. Fortunately, there is a solution to Ruth’s dilemma. It lies in a federal law governing how servicers conduct loss mitigation with homeowners in financial distress.

That law requires that a servicer always provide timely and accurate information to borrowers reaching out for help. As part of the goal, the law further places strict time limits on when and how servicers must respond to borrowers’ attempts for relief. In Ruth’s case, we will send a detailed letter pointing out what we see as all the legal violations by Nationstar.

That will start the clock ticking for Nationstar to reply by explaining why it feels it didn’t do anything wrong, or by admitting it did and correcting its mistake by putting Ruth in the position she would be in if no mistake had occurred. If it denies wrongdoing, Ruth could be in a position to file suit for damages.

If you are facing a similar problem with Nationstar, take a moment to reach out to our office.  We may be able.