Why won't  my lender work with me? (© Radius Images/Jupiterimages)

© Radius Images/Jupiterimages

Question:  I would like to have more information about loan modification. I've been struggling for three years trying to negotiate with my bank, but have yet to hear back from them. I have copies of all the letters, emails, and a phone log with names, the times of my calls and other details. Can you please help? — Lili Later

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Answer: Dear Lili, I can understand your frustration. Tracking your communications with the bank may be useful if there is an obligation on the lender's part to work with you in your quest for loan modification. Under the government's Home Affordable Modification Program,  participation is mandatory for servicers of loans owned or guaranteed by Fannie Mae or Freddie Mac. But other issues surrounding your property may allow the servicer to not let you participate in HAMP.

In communicating with you about your situation, you mentioned that you can't afford the payments and that the loan is held by Fannie Mae and is serviced by another firm.

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I also learned that your home was built with defective drywall, which, along with the decline in home prices, has you in a $280,000, 30-year fixed-rate mortgage at 6.125% for a home that is now worth about $90,000. Not only are you upside down in the mortgage, but you've also stopped making your payments after getting frustrated with the bank's unwillingness to work with you to modify the mortgage.

I suggest you meet with a real-estate attorney sooner rather than later to discuss your options. The drywall issue may result in a settlement that will affect the value of your property. It's also possible that remedies available through the Home Affordable Foreclosure Alternatives program would be better for you than trying to force your lender into a loan modification.

I'd lean toward having you get current on your loan payments versus wrecking your credit history because you're frustrated with your situation. But you really need to be working with an attorney on this matter.