Posts Tagged ‘foreclosure’

If Wells Fargo doesn’t want my house, why are they moving so fast to take it?

In Uncategorized on January 27, 2013 at 8:15 pm
One Wells Fargo Center – Charlotte, North Caro...

One Wells Fargo Center – Charlotte, North Carolina, will succeed as Headquarters for East Coast Operations of Wells Fargo (Photo credit: Wikipedia)

Although borrower is approved for ample social security benefits, lender won’t hold off on foreclosing.

Today I had a client who wanted to bang his head against a wall. His name is Will, and he is three months behind on his mortgage. This poor guy had fallen ill this past year, went into the hospital and then was laid off. When his employer called to tell him not to come back to his job, Will filed for unemployment benefits. Being 63 years old, he decided to retire and so he also filed for social security. He was told by these different agencies that he would qualify for all three benefits. With his pension, the total income would be $3,900 per month. His house payment was only $750, and once those benefits kicked in, he would easily be able to resume making his mortgage payments.
But Will wasn’t paid while off work, and he fell behind on his mortgage. Wells Fargo had already sent him a notice of intent to foreclose.
The problem was that Will would not begin to receive the benefit money for at least a few months. But, Will did have the award letters verifying the amount of money he would be getting, and so he could prove what his income would be in the near future.
Now, I always hear spokespeople in the mortgage business say that lenders do not want to foreclose on anyone, and only do so as a last resort. So you would think that a mortgage lender would be willing to work with a person who can prove that their income will be going up to a level where they can afford to again pay their debt.
We called Wells Fargo to see if they would be reasonable. They wouldn’t.
We were told that even though Will could provide a copy of his awards letter, proving how much he would receive in income, Wells Fargo might decide at any time to begin foreclosure proceedings.
“Sir, the mortgage companies say repeatedly that they have far too many foreclosed properties and that they don’t want to take anybody’s home,” I said. “I hear and read that all the time. If that’s true, just give him time to start getting his money. If he doesn’t start making his payments then go ahead and do what you have to do. But he was told he’d be getting four grand a month, and he’ll be able to repay the missed payments. Why can’t you just hold off foreclosure for two months?”
“Sorry sir, but there’s nothing we can do unless he makes his payments,” he said, sounding like a robot.


Family Members each Facing Foreclosure, won’t even consider Living Together

In Uncategorized on October 6, 2012 at 7:06 pm
I got a friend named Tony. Tony is Italian. He’s also 30 years old and lives with his parents. Outside of the time he spent away at college, Tony has never lived on his own. This is even though he’s got a good career going, has a girlfriend and he makes decent money.
I thought about Tony’s situation when I read an article in the Wall Street Journal recently that talked about how people in Southern Europe tend to stay physically close to their families, and how it’s their families that they lean on when they have money problems. Those Southern European countries–namely Italy and Spain–don’t have much in the way of social programs for people who are down and out. And it’s like that either because families help each other, or families help each other because there are no social programs. Sort of a chicken-or-the-egg question. Either way, that’s how those cultures work.
Reading that story and thinking about Tony’s situation, I thought about all the clients I speak to who are facing foreclosure, and after talking to them for a while, come to find out they have a parent or family member in the same boat, facing a foreclosure of their own, and neither one knows what they’re going to do for a place to live.
In one recent case, a client who is being foreclosed on told me that her mother is also losing her own home, which is in the metro area as her. Both women live alone, and could no longer afford their homes.
I asked her, like I’ve asked my other clients in similar situations, “Have you considered your mother moving in with you, or you moving into her house?” The answer is always a flat out, No-way Jose.
In fact, usually when I bring it up, the client looks at me like I’m crazy for even suggesting it. Now I know there are a lot of scenarios where living with a particular person just would not work out. The resulting disaster might even end up being a headline in the newspaper. And I’m not saying everybody should live with their family long term like Tony, but if two related people are in such bad spots that they don’t know where they’re going to be laying their heads at night, it might make sense to at least consider doing so for a little while. Sharing living expenses is a much quicker way to get back on your feet after a job loss or some other major financial setback. And who knows, you might become closer to that person you live with.
As for my friend Tony, I asked him once why he still lives home even though he can easily afford his own place, and he’s a grown man.
“I’ll move out when I get married,” he said. “My parents don’t bother me, and there’s always food in the fridge. Besides, do you know how much money I’ve saved up?”
What can I say? The guy’s happy, and he’s always got money in his pocket.

Don’t Miss a House Payment in Hopes of Getting a Loan Modification

In Uncategorized on August 6, 2012 at 11:28 pm
As this housing and foreclosure crisis drags on, I know that a lot of people are desperate to get help with their mortgage. Of course there are assistance programs out there that lower people’s mortgage payments, such as the government’s Making Home Affordable loan modification program, but who gets accepted into them is a decision made on a case by case basis by each mortgage company. One policy that some mortgage companies have, or they tell people they have, is that they only modify loans that are past due. And I know that a lot of times mortgage company employees will instruct a homeowner to miss a payment or three so they can be eligible to get help.
For a lot of people, the possibility of a lower house payment can be a big temptation to intentionally fall behind on their mortgage even if there is money to make the payment.
Don’t do it.
For example, I spoke to a man named Rich who was told exactly this by his mortgage company. So, Rich did what the person at his mortgage company told him to do. He stopped paying his mortgage for three months, then he called and told them he’d like to have his loan modification now. You know what happened? He didn’t get a loan modification. His house went into foreclosure.
Rich was irate when he called me up.
“I just did what they told me I had to do if I wanted a lower payment,” he said. “Then they put me in foreclosure for it? What the hell kind of scam is this they’re running?”
You would not believe how often I encounter this. It’s incredibly common. When a client asks me if they should stop paying their mortgage in the hopes of qualifying for assistance, I always give the same answer: “Not if you want to keep your house.”
There is nothing in the government’s housing program that says borrowers must be behind on payments to be eligible for the program. And yet I’ve heard employees at mortgage companies say to my clients that that is the case. I don’t know why they tell people this. Maybe they’re misinformed. Maybe they’re crazy.
But if you’re somebody like Rich who was told by their mortgage company to skip a payment in order to get help, don’t do it.
Not if you want to keep your house.

Looking for a Loan Modification? Don’t Sweat the Numbers

In Uncategorized on July 19, 2012 at 9:26 pm

Every day I speak to homeowners who are applying to their mortgage company for a loan modification in order to reduce their mortgage payment. And many of them are losing sleep over something that may not even play that big a role in whether they get the modification–their budget numbers.
As part of the application process for a loan modification, mortgage companies require the applicant to submit a list of their income and their various expenses. I’m talking to a lot of people who are driving themselves crazy worrying about what they think these mortgage companies expect their income and expense numbers to look like.
People ask me all the time, “Is my income too high?” and “Am I spending too much on this or that expense?”
They get all wrapped up in worrying that their budget numbers they submit will disqualify them from getting the loan modification they are so desperate for. And I tell them the same thing: Don’t worry about it.
A person’s income and expenses are only one small factor that a mortgage company considers when reviewing applicants for assistance. There are a million other things they look at. For example, the mortgage company will also consider the type of mortgage it is, the value of the property, and the applicant’s credit history. Another factor is the amount of money the government will give them for putting someone in the Treasury Department’s Making Home Affordable program. And of course whenever real estate is concerned, location location, location plays a big role.
And remember, the mortgage company just services the mortgage. That’s why they’re called mortgage servicers. They’re just debt collectors who must follow the policies set by the investor who is actually owed the mortgage debt and who pays the mortgage company for their work. These investors all have different policies concerning who they want to give modifications too. And you usually don’t know who the investor is, much less what their policies are.
But here’s the biggest factor by far that determines who gets a loan modification: That is whether the mortgage company believes they’ll make more money if they modify the loan. If they think they’ll make more money modifying the loan, they do it. If not, they don’t. It’s that simple.
I don’t know why people worry so much about the budget numbers they submit. I guess it’s because it’s one of the few things in the application process they do have control over.
I’ve talked to people who were perfect candidates to have their payment reduced but got turned away. And I’ve talked to people who couldn’t afford their house with 10 loan modifications, yet they were approved. I’ve detailed a few these situations in the following page:’s-75-billion-housing-program-and-why-it’s-not-working/
Take a read, and do yourself a favor and try not to guess what some faceless analyst thinks of how much you spend on toilet paper.

New Report Shows Dangers of Reverse Mortgages

In Housing Horror Stories on July 11, 2012 at 11:17 pm

I’ve written a few times in this little blog of mine about senior citizens who came to me for help after taking out a reverse mortgage on their home, and for one reason or another, are in danger of losing their home because of the reverse mortgage. You wouldn’t believe how often this happens, even though reverse mortgages are touted as plum dandy for seniors who need money, but want to keep their home.
Well finally, somebody decided to get of their keister and do some research on the problems reverse mortgages can cause and how dangerous they can be.
The Consumer Finance Protection Bureau looked into the issue and recently issued a report about the risks and dangers of reverse mortgages.
With a reverse mortgage, a senior citizen borrows against the equity in their home, but the money doesn’t need to be paid back until the homeowner sells the house or dies. Basically, not until they no longer live in the property. Until then, the borrowed money accumulates interest, and the equity the senior still has in the home diminishes as the interest piles up.
The CFPB found that a lot of senior citizens who take out reverse mortgages don’t understand that concept, much less all the other dangers they need to be aware of with these loans.
One major problem the research found was that there is a ton of misleading advertising about reverse mortgages, and the risks of seniors to be scammed and victimized by fraud is huge. It also found that even though seniors who take on reverse mortgages are given disclosures about the loans to read, these disclosures are tough to understand, especially if the senior didn’t happen to spend an entire career studying the intricacies of high finance.
Finally, the report ends by saying that because of the current economic situation that sees pensions disappearing, investments that don’t generate livable incomes, and social security benefits that don’t keep up with the cost of living, more and more seniors will take on reverse mortgages.
So there you have it. Another banking innovation that was touted as something to help people is actually wrecking lives.
You can view the full report at:

Beware Loan Modification Scams

In Uncategorized on June 14, 2012 at 11:32 pm



In case you’ve been living on Jupiter for the past four years, a lot of people in America have been losing their homes to foreclosure. And the government has trotted out a bunch of programs to help people save their home. If you’ve read much of this blog of mine, you know that a lot of the stories I write about are the nightmares that people go through trying to qualify for these government programs.
Well, a whole cottage industry of scams has sprung up because of this foreclosure mess. A whole array of degenerate con artists is out there preying on people desperate to get accepted into the government’s housing assistance programs. And I talk to people all the time who’ve handed over their hard-earned money to these creeps who make people believe that they can make that happen.
So, if you have applied for a mortgage-assistance program through your mortgage company, or if  you’re thinking about doing so, please, for the love of God, remember this one thing: Nobody can influence the mortgage company’s decision about whether or not to help you, no matter how much you pay them.
Now let me give a run down on how these scams work. A lot of them are operated by lawyers and law firms. Big surprise there, right? Others are operated by “loan modification companies,” or “loan modification experts.” Here’s their basic hook: They tell people that because they are lawyers, or because they are experts, they can negotiate with the mortgage company. Sometimes they’ll promise to get a house payment lowered, or sometimes they’ll just say, “Hey, you know you can’t afford your mortgage, so what have you got to lose by hiring us?”
I’ll tell you what the homeowner loses every time–the hundreds or the thousands of dollars these bums charge.
See, here’s why these lawyers and experts can’t help. The mortgage company works for the entity that owns the mortgage. That entity is called the mortgage investor. The mortgage debt is owed to the investor, and it’s the investor who tells the mortgage company the criteria for putting homeowners into these housing programs. The mortgage company doesn’t just pick people’s names out of a hat like they’re raffling off Christmas turkeys. I mean, we’re talking about hundreds of thousands of dollars at stake here.
But because the application process to get help can be such a nightmare, many homeowners feel powerless and desperate. And it’s that desperation the con artists prey on. A lot of these vultures will run very legitimate-looking advertisements. Still others solicit to homeowners directly. However you might run across them, just remember, if all it takes to save your house is a few hundred or a few thousand bucks, then why are the foreclosure rates the highest they’ve been since the Great Depression?

Man Swears he’s Never Missed a House Payment, but there’s a Foreclosure Notice on his Door

In Uncategorized on May 18, 2012 at 11:54 pm

How’s this for a housing horror story: Imagine you’re living your life, things are all hunky-dory, and then one day you come home from work to find a foreclosure notice on your front door. When you call your mortgage servicing company, they tell you that your mortgage is six payments behind, you owe them a ton of money, and they’ve begun foreclosure proceedings to sell the house. And as far as you know, you’ve been making your payments every month like clockwork.
This is what happened to a man named Tim, who called me after pulling his hair out dealing with the mortgage company for a month..
“I called the bank when I got their notice, and they said it’s no mistake, somehow my loan is behind and they want to foreclose. How can this be?”
Tim swore he had never missed a house payment, and had never been notified by the servicer that his loan was past due. Which is odd, because usually if you miss a payment on a debt, that creditor is going to hound you night and day about it.
Now, if Tim had made all the payments, this should have been fairly easy to prove. But the problem was this: Tim had his house payment automatically deducted from his bank account electronically every month. And the bank that had his checking account, which Tim’s house payments came from,  was the same bank that serviced the mortgage. Some of the missed payments were from over three years ago, and they told Tim that yes, they could research the bank account to check on whether the payments had come out, but because the dates in question were so far in the past, it would take them several months to do the research. Meanwhile, the bank planned to auction the house in the next month.
“This is a nightmare,” Tim said.
That was putting it mildly.

Better customer service at Pizza Hut

In Housing Horror Stories on May 8, 2012 at 8:07 pm

Ocwen admits mistake; refuses to correct it

Don’t you hate it when somebody makes a mistake, and then they refuse to correct it? Of all the ways to demonstrate you have no class, that has to be on top of the list.
That’s what Ocwen Loan Servicing did to one of my clients recently. My client, Tom, saw his business slow way down, and he couldn’t afford to pay his mortgage for five months.  Lucky for him, Tom’s business bounced back relatively quickly, and his income was back to where he could afford his monthly mortgage note, plus extra to pay back the past due amount he owed.
The problem, and the reason Tom called me, was because Ocwen refused to accept any payments from him. They wouldn’t even allow him to pay extra to bring his mortgage current. Ocwen was demanding the entire past due amount of several thousand dollars, or nothing at all. And the reason they wouldn’t accept payments, an Ocwen employee had told him, was because his financial information had been entered into their system incorrectly.
Being self-employed, Tom had been required to submit a profit/loss statement for his income. The Ocwen employee told Tom that someone inaccurately entered his income as $16,000 per month. In reality Tom only made $4,500 per month.  The P/L statement covered three months, but the employee who took his information thought it only covered one month. Thinking Tom made all that money, Ocwen refused to let him pay back the arrears little by little, which makes sense; I’d demand all my money back too if the guy who owed me was rolling in dough.
But here’s the thing that made me want to punch a hole in my cubicle. That wasn’t the case. Tom didn’t make sixteen grand a month. The person who took his information just made a mistake reading his statement. And even though they acknowledged the mistake, this company was refusing to correct it.
We called Ocwen to see if they would be reasonable. The conversation that followed was enough to make you question the future of the human race. The representative on the phone told us that yes, Ocwen did misinterpret Tom’s income when his information was received, but afterward Ocwen had implemented a policy not allowing repayment plans for anybody.
“But sir,” I began. “You had his information before your new policy went into effect, and you made your decision to deny him a repayment plan based on a mistake you acknowledge your company made. How can you not address and correct your mistake?”
The rep simply told us nothing could be done. So we tried to work our way up the managerial chain, speaking to a supervisor, and then a manager. As we got higher up the chain, each person seemed to understand the situation less than the one before. Also, the foreign accents got thicker with each successive person. The last person we talked to, the manager, told us that not only would they not accept payments, they were going to start foreclosure unless Tom paid the entire back due amount..
“My God,” I said. “If you order a pizza with pepperoni, but they give you anchovies, they take it back and give you a new one with the right stuff on it. How can you foreclose on this man’s house, after you made a mistake with his file? Especially since he has enough money now to pay back the arrears he owes. He’s not looking for a handout.”
But the manager just repeated that foreclosure would begin in two weeks. I advised Tom call a bankruptcy attorney to see if that would stop the sale of his home, which Ocwen seemed set on doing.

Bank Orders Senior Citizen to Pay 72% of Monthly Income toward Back Taxes

In Uncategorized on March 20, 2012 at 12:12 am

HUD guidelines won’t allow her to pay anything less; foreclosure imminent

Today I spoke to Rose, a senior citizen from Pennsylvania who was facing a foreclosure on her home six years after she took out a reverse mortgage.
With a reverse mortgage, a homeowner at least 62 years old borrows against the equity in his or her home, taking the money either in monthly payments or as a lump sum, with no payment on the money borrowed coming due until the he or she leaves the house.
Rose had taken a lump sum when she got the mortgage, and used the bulk of it to pay for home repairs and some medical debts she’d accumulated. So the money she borrowed through the reverse mortgage was spent, and she was living on her social security income of $1,100 per month. She didn’t have a house payment, but she also had never been able to save enough to pay the yearly tax and insurance bills.
Rose had not paid her taxes or her insurance in five years. The bank that services her reverse mortgage paid those bills, and now they wanted their money back from Rose. The money she owed amounted to about $17,000, and they were demanding no less than $800 per month as repayment. With her $1,100 income, she would only be left $300 to live on, which wouldn’t come close to covering her basic needs.
“Rose, is there anybody you know who could live with you and share the bills?” I asked. “You might be able to afford this if there is.”
“I don’t know anybody who needs a place to live,” she said.  “I got this reverse mortgage because I needed money. How can they expect me to pay $800 when I only get $1,100?”
At $800 per month, the debt would be paid back in 21 months, an extremely short period of time to pay back such a large amount.
We called her servicing company and spoke to a representative named Brian. “Why can’t she at least pay this back over a longer time period?” I asked. “Her social security income is only a few hundred dollars more than the payment you’re requiring of her. There’s no way she can afford an $800 payment..”
“It’s not up to us,” said Brian. “The repayment plan is determined by HUD guidelines. If she doesn’t start making those payments, foreclosure will start in three months.”
And that was it. There was no negotiating, no discussion. The Department of Housing and Urban Development had their rules, and those were not flexible.
“I just assumed the money I owed would be added to the loan,” she said. “I was stupid, I didn’t understand how this worked.”
“Rose, I think your best bet at this point is to speak with an attorney to see if bankruptcy might help this situation.”

Bank of America Hounds Couple to Accept a Loan Modification

In Uncategorized on November 28, 2010 at 11:57 pm

While Hundreds of Thousands have been Denied a Loan Modification, this Couple was Practically Begged to take One

  On any given day, a person can find stories in the news about homeowners who beg and plead with their mortgage company for inclusion in the government’s Making Home Affordable loan modification program. Loan modifications have become so sought after that a whole criminal industry has sprung up, where con artists promise homeowners to get their mortgages modified for an upfront fee. (The Federal Trade Commission recently made it a crime to do this.)
  But a woman who recently called our agency told me that she spent the entire summer fielding calls from her mortgage company, Bank of America, repeatedly offering to modify her loan through the MHA program.
  “They would call all the time and offer the modification to us,” said the client, Sandy. “I talked to supervisors and told them to quit calling. And it still didn’t stop. It was torture. It was three times a week at least. They’d call me and my husband. It went on for 6 months.”
  What happened was Sandy had lost her job in December 2009, and by spring they were two months behind on their house payment. Sandy had called the mortgage company to let them know they would be having problems. When they did, Bank of America had them apply for a MHA loan modification (as they do with most borrowers who call with problems). After two months, which is very short for most applications, they were notified the modification was approved.
  But Sandy turned it down because it would have only reduced the payment by $30 per month, no where close to let them afford the house. Luckily Sandy found another job, and they borrowed money from their family to bring the mortgage current. But Bank of America wouldn’t take no for an answer, and spent the next six months hounding these people.
  Adding another layer of weirdness to story, Sandy told me that in June, Bank of America didn’t credit their account for that month’s payment even though the money for the house payment indeed left her account.
  “When I called to ask why they didn’t credit the payment, they told me it was because they wanted to give us the loan modification. So they basically kept the money from the payment in limbo.”
  According to most statistics available, of those who apply for a loan modification, more than half are denied.