Union Bank of California Doesn't follow the rules Los Angeles California

Your message was right on, and yes, they "worked around" the promised modification, but denied it for a dishonest reason.  They said the mod packet had not been returned timely, however it was returned almost a month early and there is USPS confirmation of that.  It was obvious they never intended to modify this loan as the property had sizeable equity and they thought they could become unjustly enriched.

Beyond THAT, they are required to notice all parties that have a claim on the property . . . which would include the record title holder and the first TD.  They did NOT notice either one.  How can they possibly justify that?

The bank has the right to file for foreclosure after the first missing payment month (31 days), and then would do it again 90 days after the first filing. If you said the ownder missed the payment for 4-5 months, that is enough time to allow the bank to complete the initial foreclosing process. You can see a video on youtube.

Because the owner attempted to do loan modification late, the process could easily fail because the bank could have prepared to foreclose the property already. As a result, the bank simply denies the modification application and go through the foreclosing once the process is done. This is a work around for the bank. Even though it is not ethical, I somewhat understand why they do it -- money -- and I cannot blame them because their business is about profit, not charity.

You did not explain in detail about how they returned the payment. I suspect that they returned the payment and sent a letter of foreclosing because they successfully finalized their foreclosing process. If they failed to foreclosed, then they would accept the modification (but that's not happening).

I would suggest watch out for any bank. The bank do NOT want to hold on a property that is not being paid. They will try to get rid of it as soon as possible. The way to get rid of could be either short sale or foreclose. Even though short sale would give them more money, it is tedious and the owner MUST try to start the process at a very early stage. Loan modification is also similar way -- start it as soon as possible. Also, do NOT completely listen to the bank officer telling you what NOT to do, but rather research on how the process is done. It is very important because there can be a loop hole or work around that in the end the property would be foreclosed instead. Just need to watch out (or do not try to bite off more than you can chew).