Q.Dear LoanSafe.org, I have just applied for a home loan modification through Bank of America because I am struggling to maintain my monthly mortgage payments. Due to high medical bills and an ARM that is due to adjust next month, there is just no way I can afford to continue making my payments.

Last week we were assigned to a negotiator and were told to check our status online for weekly updates on our account. However, it does not say too much about this process and just lists referred for status. Our question to you is, “What is referred status when applying for a mortgage loan modification?”

A. First off, I would just like to say that you should never rely on your online account for updates on your case. This will only list basic information about the process and will not give accurate information about where you stand in this process. Please make sure to follow up weekly with your negotiator for updates to ensure your file is being handled appropriately.

Usually when your account status says “referred” you will also see another message that looks like the one below.

“Your request for assistance has been received and will be reviewed for potential Workout Assistance programs. Please be advised that all collections activities are continuing for your loan, as your loan has not yet been pre-qualified for a Workout Assistance program. We expect more information to be available on xx/xx/xxxx. If your status remains unchanged after xx/xx/xxxx, please call and speak to a customer service representative. Please do not call back for thirty days as that will delay the process. Please respond promptly to any calls or requests that you may receive from Home Retention Department during this period. Lack of response will cause your workout to be delayed or cancelled. Thank you.”

Basically this just means your account is in process for a loan workout and your loan has been referred to the department that will be handling your file. This does not mean that your account has been approved or denied for a modification. Many people get frightened when they see referred because they think that this means their account is being referred for foreclosure. This is not true, during the loan modification process it is very common for your online status to list referred, especially for the first few months after you apply.

This is just basic information they give to everyone and it is crucial you do NOT listen when it says don’t call back for thirty days. It has been proven over and over again that those who do not follow up with their lender on a regular basis will pretty much end up being kicked to the back of the line. I have seen many people stuck in this process for well over a year due to lack of follow ups.

In our free forum here on LoanSafe.org we have over 32,000 members who are homeowners just like yourself currently pursuing a loan modification. Here you will find all the information you could possibly need about this process and I’m sure you will benefit from others experiences as well. Please click here to join our free forum.

Moe Bedard
My name is Maurice "Moe" Bedard. I am the founder of America's #1 Mortgage Forum, LoanSafe.org. My online work has been featured in the New York Times, LA Times, Fox Business, and many other media publications.