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Mortgage modification nightmare

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By Diane Walker - bio | email
Posted by Terry Alexander - email

RICHMOND, VA (WWBT) – Looking to 'lower' your mortgage payment? Are you close to foreclosure and need help? Ads like those are everywhere, but many companies are putting home owners, deeper in debt. So, who can you trust? 

Confusing and long, that's what distressed homeowners say about the loan modification process. Even those who call their lender may still have trouble. Others lose their money -- and sometimes their home dealing with companies they know nothing about. 

Phillip Jenkins searched for help online. He entrusted his family's home to a company in Florida that promised relief. Now, he knows he should have contacted his lender. 

"It sounded like it would make things better. If I could lower my payments $300 or $400, I'd have money to work with," said Phillip. 

'Real Estate Loan Negotiations Services, LLC', says -- it did everything it could for 6 months, to get the couple approved. It didn't work. 

"If there was one decent person in that company that had a heart, they would catch my loan back up and let me be," said Sissie.    

The couple ignored the red flags of suspicion for anyone considering mortgage modification. They say they were told: don't contact your lender, pay a fee; theirs was $1,000, and stop paying your mortgage. The company says, no one ever told them to stop making payments. 

Diane Walker: "So how long did you all not pay the mortgage?"
Phillip Jenkins: "13 months and they told us not to pay it." 

They came within 2 days of having their home sold on the courthouse steps. Their lender, 'Litton Loan Servicing' rescinded the foreclosure and developed a repayment plan. They had fallen $24,000 behind waiting on a loan modification ... And for what? 

"Nothing happened. Now, we went from $820 to paying $1,347 a month," said Phillip. 

"I've never been so scared in my life. Never. I've never had to worry about not having a roof over my head," Sissie said. 

"I'm paying it now, but can't nothing get done. I need tires on my car but, I can't put them on there. (Every dollar is gone?) Yea." Phillip added. 

Johnathan and Lissie Lowe had a nightmarish experience also, and they 'did' contact their lender and even got pre-qualified over the phone but 'Bank of America' took so long.  

"If they don't take quick action, a lot of people won't have a home. I think they can prevent it if they just act quickly and do what they're supposed to do," Lissie said. 

Johnathan had lost his job, and says they would have lost their home. They didn't get the paperwork for months. 'Bank of America' promised it in 45 days.   

"We had borrowers' protection on the loan so that covered our mortgage payment for the first 6 months I was unemployed. Otherwise, we would have lost our house," he said. "They give the appearance that they prefer a foreclosure, than to modify someone's loan. I don't know why but that's the way it looks." 

A local housing advocacy organization explains the delay: "They are just not able to get to the paperwork as soon as it comes in," said Paula Sherman with Housing Opportunities Made Equal. "When they get to the paperwork, it is now outdated and they have to send it again." 

And also says trust no company to get you caught back up, if the loan modification fails. 

"Anyone that says ‘hey, don't contact your mortgage people anymore, we're going to take care of it from here', that's a clear sign this isn't someone you should be working with," said Sherman. 

Diane Walker: "What would make it right?"
Phillip Jenkins: "If I could find somebody to refinance my loan and give me a decent payment then I could catch up." 

Don't be fooled by companies that link themselves to President Obama's mortgage program. "Real Estate Loan Negotiation Services" uses that name, but when you call they answer the phone, Hope Alliance. 

To apply for a government-sponsored mortgage modification or refinancing, go to the website:   www.makinghomeaffordable.gov or call, 'Hope Now', 888-995-HOPE.  

The house must be owner occupied, you must 'document' a financial hardship, and proof you can make a payment. You can also call your mortgage company. Contrary to popular belief you are 'not' automatically entitled to a mortgage modification.

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