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How to avoid foreclosure in just 982 simple steps

A new F-word has been kicking around since the recession hit. It's called foreclosure.

But there is a way to beat it: It's called a mortgage modification. It can work as long as you have patience and stamina—and somewhere to live in case the whole mess backfires. And the modification process can be a mess, indeed.

It all starts simply enough: You stop paying your mortgage. You can do this out of experimentation, spite or because a Realtor friend advised it over a cup of coffee one Saturday afternoon.

"Just stop paying it," she says, as if ignoring bills is as natural as breathing. "Trust me. The bank does not want another foreclosure. It'll offer a modification."

It's not like I had much of a choice. A change of jobs and a reduction in income made it impossible to meet the hefty monthly mortgage payments. Well, maybe I could have kept up with them if I had given up food, water, gas, the Internet and electricity, and chosen to subsist on dryer lint.

So I researched the modification thing, and did everything by the book. Instead of a monthly payment, I sent my lenders an application packet and a letter.

"Dear bank people: I am now broke and can no longer afford my mortgage payments. Please reduce them so I don't have to eat dryer lint."

The application packet requires every shard of information related to your finances since 1942, and needless to say, is a major pain in the butt to compile. But you quickly get used to it when you have to compile it every month.

That's right: The bank does not review your application, approve or deny it, and then let you move on with your life. It first claims to never have received your packet, and once you send at least three more copies, it tells you the information is out of date, and you must send a new one.

The rambling merry-go-round from hell goes on for months, making you stressed out, nauseated and fond of the new habit of banging your head against the wall. Every month, the bank has a new excuse for why it cannot send your packet on to the modification-review team.

It's lacking proof of your renter's income (although you do not have a renter). The profit-and-loss statement is not signed. You forgot to dot the second "i" in Gargulinski. You did not check the box that says you are not a Civil War veteran.

As the horror show continues, you get further and further behind in your payments until you suddenly owe an impossible amount, plus penalties, that even subsisting on dryer lint for a decade could not correct.

Then the phone calls begin.

As the bank's loan-modification department is busy losing all your forms, the collections department is equally as busy harassing you into paying the massive amount now due. And never the twain shall meet: The collections department has no clue the bank is reviewing your modification request. Nor do they care. They just want that money.

The scenario can continue ad infinitum, with one lawyer saying he was playing the game with a $500,000 home for the past four years. Yes, you may end up with a lawyer.

You don't have to get a lawyer, of course, but the process can eventually become too much for a solitary soul. Besides, the lawyer is recommended by a pal who just spent two years in her own modification whirlwind.

So you go with the guy she recommends, spending whatever money you did manage to save during this yearlong process on his retainer. Whether or not the lawyer helps remains a mystery, as the very next day, you receive word from the bank that your 982nd version of the packet finally went through to the review team, and it appears your modification may be approved.

The bank keeps feeding you hopeful news at this point, although you have also begun to receive foreclosure notices. The foreclosure people have no clue the modification people have already approved you. And never the twain shall meet.

Once all the dust settles, and your home is off the auction block, you are finally left with affordable monthly payments. You also get a mortgage that stretches into the second-half of the century and a balloon payment for the year's worth of unpaid mortgage payments that is due sometime after you'll be dead.

You send a gleeful email to the lawyer to tell him the good news and that he can close your case. When he sends you a $250 bill for reading your email, you know the process is officially complete.

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