More nightmares from the world of mortgage modifications

McClatchy NewspapersAugust 18, 2009 

WASHINGTON — A story Sunday on how lenders aren't following through on promises of modifying distressed mortgages, prompted an outpouring of comments and e-mails from others with similar tales of woe.

Here're some of their stories, edited slightly for brevity.

-- ilrealtor wrote on August 17, 4:45 PM:

I am not surprised to hear all of these home owner horror stories since I am an active Realtor who is active in the foreclosure market. I understand homeowners are frustrated because they do not want to loose their home and will do almost anything but it appears that there is a real disconnect with people on the other side who care to help these home owners. I suggest we re-think about this problem out and either stop rewarding and bailing out lenders and servicers of these bad loans and think about helping the homeowner...

-- youfightforeclosure wrote on August 17, 3:46 PM:

Lately, I've been working with foreclosure and have found that the lenders have been less than honest and it is almost impossible to get the lenders to do a loan modification. I'll give you an example, a woman in MI was working with her lender (Wells Fargo) in June of this year, they told her everything was fine, they would work out a modification and they postponed the sale, when we checked we found out her house was scheduled for sale 7/8/09, just like the lady in your article. She called me and was scared, because people tried to modify her loan and took thousands of dollars from her.

I told her no matter what she did she had to STOP THE SALE! She filed a lawsuit on her own behalf. It worked! Borrowers need to send letters to their lenders stop calling! The problem is that I think that people have just given up and thrown in the towel. They've been lied to so many times by their lenders and companies claiming they can help. They don't feel they can trust anyone! STOP THE SALE! It doesn't matter what state you live in. If you live in a judicial state, file an answer, if it's a non judicial state, file a lawsuit. Force the lender to stand by their word!

-- circa450 wrote on August 17, 9:37 AM:

I was lucky enough to be signed up with World Savings, Wachovia, Wells Fargo, et al. They are claiming that "my" mod. is waiting for me as soon as my Chap.7 is finished, more lies? The whole mortgage contract was a sham and since the company is made up of lawyers and telemarketers the only way out is for the gov't to put them out of business. Of course they won't, they have the money.

-- makinghay wrote on August 16, 8:00 PM:

I have been dealing with the same problem with IndyMac. Taken over by the FDIC and bought by private equity investors at a steep discount. The loan portfolio is being pressed to generate significant returns using a "loan to own" strategy. I have $300K in equity in my home. Nothing but delays and lies. Finally the truth last week when the rep at IndyMac loan modification group admits they have been lying to me to keep me from defaulting. The returns the private equity folks need are not coming from bond return they must come from taking homes with equity by running up late fees etc. then foreclosing to steal equity. I am not done yet. F---ing thieving with discounts from the FDIC, federal government abetted theft.

-- Andrew111 wrote on August 16, 7:50 PM:

I am writing with the same story as the other people that are featured in your article. We have made it through the process, during the course of the process Washington Mutual lost our paper work 9 times. Fortunately we sent everything signature required. (But we still had to resend 9 times) The process took us nearly 1 year of screaming into the phone for hours at a time. Multiple documents; the bank telling us not to pay so we would fall behind, "because the bank will not help until you are 2-3 months behind in payments." Then there is no help at all unless you are willing to spend hours on the phone screaming and following up.

There are so many disheartening things about this, the first is that the banks received funds to help people work through the process, second we contacted our representatives, (in Florida) Senator Nelson and also our Congresswoman, they did not respond. Did not seem to care at all about their constituents in Florida.

-- ronin7752 wrote on August 16, 2:00 PM:

I can't say that this is much of a surprise. If the mortgage companies weren't loaded to the brim with amoral criminals, we wouldn't be in this position to begin with. The "bailout" didn't require any significant changes in the companies who took the money. So what reason do they have to change their ways? It's a travesty, though. A reminder to us all to record critical legal conversations like this, or get it in writing.

-- azvideo wrote on August 16, 9:32 AM:

This is typical gov BS. They forgot to tell the banks what they expected them to do with the money from the bailout. Oops. Like most companies that got this 'free' money they will hang onto it until the economy turns around. A '3 month modification' is just a delay to help their statistics. No one is really being helped!

-- ZARDOZ wrote on August 16, 9:08 AM:

Interestingly (so far) I've had a different experience with WaMu/Chase. I fell behind but continued to make payments as possible. WaMu/Chase advised me that there were gov't programs that I should look into to see if I'd qualify.

I called the Fed, answered some financial questions and was told I qualified for the Home Affordable Modification Program. I then called WaMu/Chase back. They in turn said that was great& with the same financial data started a loan modification. I called in late July & was told it was in review. I called on Thursday & was told it had been assessed & approved. The next day, coincidentally, I received (FedEx) paperwork.

Long story short. My payments went from roughly $1400 mo. to $713 (3%) for a 3 mo. trial period after which, if my financial data checks out, will stay at or about that total for 2 - 3 years. Then it will raise to approx. $1000 (6%).

When told I was in disbelief & waited for the other shoe to fall. Nothing. It's the way it appears.

-- anothercountryheardfrom wrote on August 16, 7:55 AM:

These banks and mortgage lenders will eventually become failed real estate brokers; no one will buy homes because they will continue waiting for prices to drop while unemployment continues to increase, as the supply of foreclosed homes increases. Meanwhile, they’ll lose their jobs as well. The banks and mortgage brokers will be left holding the bag, unless they can find someone stupid or greedy enough to buy their bad paper. Hope springs eternal...

-- FletcherFramer wrote on August 16, 7:32 AM:

What the stories have in common is people being advised that the only way they could negotiate their payment or re-finance was to fall behind in their payments. They should not have taken that advice, clearly. I don't understand why the banks weren't more willing to work with people to prevent missed payments and foreclosure when they were approached by people who were current on their payments (the good customers!) who wanted to meet their obligations. And telling them they need to be behind to qualify for help is just asking for the worst outcome for both the bank and the customer.

-- Oowocwoo emailed:

I think what no one understands is there's more money in foreclosures than modifying mortgages. How do I no you mite ask? Bin there done that. 1.They get your down payment and closing cost. 2. They get your payment each month and put that money in suspense keeping it as long as they like putting you in default as the bank makes money on the market on your surplus money in suspense this causes a default in your account. 3. Than the default adds charges for more money you did not contract for "in the thousands." 4. This does not include charges to modify your loan, over sized escrow, lawyer fees and something I have been paying called "OTHER" you are now in default.

5.The bank gets a lawyer his job is to take your home no matter what and his fees are large which you have to pay. 6.You take every cent you have and give it to the bank to save your home for me a little over 45,000.00 in one year one check to fix my default was 21,409.00 and payments to the trustee for reinstatement. 7. Foreclosure you are charged thousands of dollars for fees and charges in my case over 30,000.00. 8.You lose your equity in your home in my case I owed 123,000.00 my home was worth 352,000.00. You would think a loan modify would be better but not profitable for the bank or the trustee. 9.On top of all the money the bank and the trustee got, they get to keep or hold all your surplus money from the illegal sale of your home in my case a little over 68,000.00 which I'm sure is in a interest baring account. It's been over a year and the surplus money from the sale of my home is still in the hands of the trustee. 10.Your credit is so trashed and your so broke from giving the bank all your money to save your home you can't rent anything.

In lieu of all the money I gave the mortgage company it did not save my home. I guess this will never end and good people will lose there homes as our government turns away from the real need to reform these banks at there core.

-- Martin, via email:

Mr. Hall, I want to first say thank you for your article yesterday on the problems of the Home Affordability Act. I have been trying to find any news organization to try and cover this problem. My experience with my mother's mortgage and my own have lead me to discover that Wells Fargo and I believe other banks, are perpetrating one of the biggest scandals. After talking with Freddiemac, Wells Fargo, Home Affordable program, and a HUD counselor they have admitted that all Wells Fargo is doing is benefiting Wells Fargo. My mother qualified for the program but was only given the choice of Short Sale, Quick Deed, or Loan Modification with delinquent repayment (basically a temp. rate modification). She has not been delinquent but Wells is forcing her to sign a document that forces her to be delinquent.

By doing this she is unable to refinance or go anywhere else if she defaults. Basically Wells Fargo is forcing homeowners to Short sale, Quick deed, or rate modification to lower foreclosures. None of these options help the home owner, but do increase Wells Fargo's assets and books.

How can they get money from the taxpayers to help the homeowners and then not use the money for the homeowners? Who is overseeing this? With what I have researched this is insane. No one is getting help and i mean no one. They have admitted to me that Wells fargo is not helping home owners, and that the Affordability act has too many loop holes for the banks. What the banks are offering will lead to another market crash within the next 3-5 years. I am not an economist, but to offer rate adjustment and tack on the difference to the back end the loan is just prolonging the inevitable.

-- ABME, via email:

Hi there. I was reading an article in the Sunday Sacramento Bee, CA. titles "Desperate homeowners face obstacles, evasion. This article referenced McClatchy's Washington Bureau and I am contacting any agency I can to try and save our retirement home. We did a home loan refi 2.5 years ago. We were told that we were getting a 4.5% five year fixed loan, adjustable from there, 3 year $20K pre payment.

We were assured that it was not a negative amortized loan. Even got something in writing. The broker persuaded us to have a rep come to our home and sign the 85 pages of very confusing documents. We ended up going from a 7% fixed to an 8% adjustable on a half million dollar loan. … We hired AMG ($2,800 put on a credit card) last Feb. for a loan mod.

Our credit was excellent. Our monthly retirement income is about $6,500 a month with very little debt. Our lender Aurora has denied our loan mod twice. The third request was sent in mid June. We are told that it will take 90 days to review. … We have written Fox and CNN trying to get their attention, nothing. … We are not one of those many, many folks without a job that cannot afford a loan payment restructure. We can afford to keep our home with a little reasonable help for our two lenders.

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