WaMu Tells You To Stop Paying Your Mortgage And Apply For Help, Then Forecloses On You

WaMu, despite all their big talk about helping homeowners avoid foreclosure, is apparently too overwhelmed with a tsunami of defaulted loans to call their customers back, let alone help them stay in their homes. Meet Lori and Mark Pestana. They have a $275,000 fixed rate mortgage with WaMu as their servicer. In August 2007, the Pestanas could not make a payment on their loan. They considered dipping into their retirement savings, but WaMu’s website offered an alternative:

After reading on WaMu’s website that it would assist distressed borrowers with loan modifications, Lori Pestana called and was told they could not qualify until their payments were 50 days late. To become eligible, they stopped paying and applied for help on Oct. 9, 2007.

WaMu told them that they could expect an answer in 4 to 5 weeks. On Nov. 13, a law firm representing WaMu sent the Pestanas a letter informing them that they were in foreclosure.

The Pestanas said they tried at least twice to determine the amount they could pay to reinstate their loan, but Harmon Law either did not call back or could not give them an amount. Another time, Harmon Law refused a $12,000 payment, because it was $3,000 short of the total payoff amount, the suit said.

The Pestanas are currently scheduled to be evicted from their home later this month and are suing WaMu, seeking class-action status for all of WaMu’s Massachusetts customers. WaMu says it “fully committed to helping our customers stay in their homes” and that “foreclosure is a last resort.”

Suit blames loan servicer for pending foreclosure [Boston Globe]
(Photo: stirwise )

Comments

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  1. OmniZero says:

    Woohoo! WaMu. Is sued.

    I said it before and I’ll say it again… I wish I understood business psychology a little bit better. I just don’t understand how incompetent some businesses can be. Does anyone have an answer for that?

  2. Pylon83 says:

    I have absolutely no sympathy for the OP’s here, save for the difficulty of actually reaching a person. They created this situation by deciding to stop making mortgage payments when they admittadly could have made them. Programs for “Distressed” borrowers should be limited to those who absolutely cannot make their payments, not those who would just rather renegotiate because making the payments presents an inconvenience. They were trying to game the system and it bit them. Nowhere in the article does it say that anyone at WaMu told them to stop making mortgage payments, just that they did in order to “become eligible”. This is a problem of their own making, though WaMu and the law firms lack of communication certainly aggravated it.

  3. BuddyGuyMontag says:

    @OmniZero: Easy. Too many cooks in the kitchen for the bank’s end, or people not drilling down enough to get an answer on the consumer’s end.

    It appears the Pestanas didn’t talk to someone face to face. A Google indicates that the law office is in Mass. And if they were willing to dip into their retirement fund to pay it off, and they were 3K short, why didn’t they use 3K from their retirement to pay it off?

    Not enough details.

  4. B says:

    @OmniZero: There are a number of factors that cause this. One is businesses tend to have policies that are written by multiple people who have little contact with the customers. This tends to make the policies impractical. Then those policies are enforced by people with little autonomy or responsibility other than following the rules. And it becomes easy to ignore problems, pass the buck along to somebody else. When these things combine, you get incompetent, uncaring businesses.

  5. thejumbo says:

    There ARE smaller homes in the world, you know.

    I sympathize to a point, but CHOOSING to stop paying is silly – a rep could have set something in motion immediately – if not a ‘work out’ plan, something similar.

  6. BuddyGuyMontag says:

    oooh, here’s a key fact:

    THEY HAD A FIXED RATE MORTGAGE.

    This is not a subprime mess; this is not a ARM surprise. They had a fixed payment they knew they had to make. Did they lose their jobs? Did they not have a backup fund? Again, not enough facts.

  7. fostina1 says:

    isnt refusing payment even partial payment illegal?

  8. LikwidFlux says:

    What do you mean I can’t have cancer medication until I get cancer?!? *runs out and starts smoking 10 packs a day*

    morons

  9. SkokieGuy says:

    The OP was not in default. They went to the website and saw a program and called.

    They were told they did not qualify and why they did not qualify.

    The intentionally chose to default on their contract. This does not appear to be an instruction from WaMu, but the OP’s attempt to qualify for a program they were not eligble for.

    If the loan is a fixed rate, their payments would not have increased over time (like an adjustable rate mortgage).

  10. savvy999 says:

    What is all of this “calling” going on? IANAL, but sorry, but pleas that “ABC said XYZ on the phone”, or “they didn’t call me back” are less than hearsay.

    Whatever happened to the written, certified, signature-required-for-delivery letter as means to a legal end? Do people seriously think that calling up WaMu and talking to whoever on the phone is just cause for suspending your mortgage payment?

    It doesn’t mean that WaMu isn’t a bunch of turds, but you have no case unless you GET IT IN WRITING.

  11. LikwidFlux says:

    @SkokieGuy: Yah, another example of the lovely editors taking some creative freedoms

  12. dako81 says:

    Instead of dipping into a fund and making the payment, spending less from there on out, and being able to make the rest of their payments with a lesson learned (ESPECIALLY ON A FIXED RATE LOAN), they just stop making payments?

    DOES NOT MAKE SENSE! Sounds like a great way to get yourself into a bad situation. It’s like giving up before you’ve even tried.

  13. balthisar says:

    So, they only owed $12,000 + $3,000? They’re losing their home because they couldn’t deal with the $15,000 outstanding? I guess even dumb people got traditional mortgages, too.

  14. Cocotte says:

    Gotta go with the crowd here… I wouldn’t do anything as risky as stopping payments without at least first talking to a human being and confirming that this was a viable plan and couldn’t land me in bad waters.

  15. cmac says:

    For anyone who has been following this mess closely, the loan servicers won’t even talk to borrowers unless they’re past due. I have friends who knew they were going to be in trouble in the coming months and tried to work with the bank beforehand. The banks triage won’t allow them to work with the borrowers until after they stop making payments. Servicers are repeatedly telling the borrowers to stop making the payments and then call back when they’re late to be eligibble. Don’t blame the OP here. There’s plenty of fault to go around.

  16. randygbk says:

    So, lets just say they did qualify for the program legitimately and could not pay and were 50 days delinquent. It looks like the system would still have failed them and anyone else in a similar situation. The fact still stands that the WaMu bureaucracy has and is costing people their homes while contradicting their well publicized statement about foreclosure being a last resort option.

  17. cmac says:

    @savvy999:

    Because the banks won’t send anything in writing upfront before the workout is approved. Checks the blogs. The stories are numerous.

  18. rrrebo says:

    Hey, Countrywide did the same !@#$!@!@#$ thing to me. We lost one income, and pro-actively called CW to let them know we were having trouble and needed a little grace period or deferment.

    CW: “We can only help you if you are 4 months behind.”

    Me: “So…you’re telling me to NOT pay my mortgage for 4 months?

    CW: “Yes. Then we can help you.”

    Like an idiot, I listened. Their idea of “help” was to offer me a repayment plan with monthly payments almost twice my normal payment to catch me up. Yes, CLEARLY, if I cannot afford to pay my normal monthly payment, DOUBLING it will help me SO much more! Jackholes.

    It took me 3 years to straighten that mess out.

  19. Audiyoda says:

    Welcome to my world – just insert First Horizon Home Loans for Washington Mutual. Same thing: we’ll help you but you need to be X number of days delinquent. I asked point blank if there was anything that could be done before that. I was informed by three different people at First Horizon that they couldn’t do anything to change the terms of our mortgage until we qualified under the terms of their loss mitigation department. So after X number of days I call…and call, and call, and call, and call…

    Finally got someone from their loss mitigation department and was sent a borrower financial statement pack. Sent back everything they needed including the reason for hardship (I had become unemployed). Heard nothing. Called them again (and again, and again, and again) and finally got someone else from their loss mitigation department. They didn’t have record of ever receiving my packet. This happened four times (the last two were sent with delivery confirmation requiring a signature – they still didn’t have record of receiving the information).

    Of course by the time the fourth packet had been send we were not 6 months behind – we tried sending them what we could but it was less than half of the delinquent amount. Two weeks later we received a letter from their law firm indicating our home would be sold at a sheriffs sale. By state law we have 6 months after that sale to move – the house was sold (by First Horizon back to First Horizon) on June 12th.

    We didn’t have one of those nasty sub-prime loans or outrageous ARMs that change 5% a year. We had a reasonable ARM that at the time was at 6.375%. But I’d lost my job and the economy in Michigan is so bad there are far too many workers looking for far too few jobs.

  20. krom says:

    WaMu phone reps lie. Constantly. Without fail. Anything a WaMu person tells you over the phone is utter bullshit. Go into a branch. You have a better chance of not being lied to, though your odds of actually being told that something is wrong with your account won’t go up at all.

    When was the last time Consumerist’s Most Hated Bank (TM) lied to someone and screwed them over this bad? Seriously.

  21. Etoiles says:

    There’s just too much missing information here for all the comments to date all to be as judgmental as they are. It’s entirely possible that the couple in question were complete idiots who made a bad call and just want to complain. It’s also entirely possible that they had a medical or family emergency, a major business failure, or some other kind of unexpected event that would have a significant impact on any one of us.

    I’ve encountered similar screw-the-user policies (mostly in student lending / financial aid) and so I would be intrigued to learn more about the actual situation, and how much of it was individually triggered vs. institutionally.

  22. womynist says:

    Regardless of what the real situation is with the OP, mortgage companies always say they’d rather do a workout/modification instead of foreclosing, but it doesn’t seem like they want to help. The non-profit agency I work for has a program to assist people with their mortgages (no more than $2,500) and I can attest that you get a different story depending on which CSR you speak to. They can and will refuse partial payments. I helped one woman out and verified the amount due with CSR #1, sent the payment, then called about a week later (with my client) to make sure they received the payment and was told by CSR #2 that she was still in foreclosure because the payment we sent was $.20 short! Twenty cents?! Even after all the verifying, they still chose to be jerks. Long story short, unfortunately they auctioned the house and my poor non-profit is out that $2,500.

  23. iambeaker says:

    This could have all been avoided if people didn’t live above their means, “Looked before they leap”, and keep enough money away to live on for 90 days… Like other commentors, they had a FIXED RATE, so they knew what their payments were going to be, therefore if they kept 90 days worth of cash, they wouldn’t have to dip into their retirement.

  24. PurplePuppy says:

    @Pylon83: It’s a game; it’s all a game. Unfortunatly, it can be dangerous and painful some times. My credit cards did this to me too when one of them told me that the ONLY way they could bring my rate down from 24% (no lates, 680 score, what the heck!) was if I was in a payment program, and the only way I could get into a payment program was if I was 90 days late. I was very, very tempted to take there suggestion to stop paying, but I didn’t want the black mark on my credit. Finally, I closed the card just to make sure I didn’t spend any more on it. SURPRISE! They offered me 15% to stay. I didn’t take it, and a month later they were offering 4% to come back. I took it.

    If I was in a tough spot with a mortgage, I’d totally want to figure out how to play the game. However, I DO realize that the stakes are much higher, and therefore it would be incumbent on ME to consult lawyers, call CS every week, etc., etc. so I don’t screw myself over. If you’re going to “work the system”, remember that the word “work” is involved.

  25. PeteyNice says:

    I can has WaMu Trifecta?

  26. oneliketadow says:

    Uh, this probably violates the comments policy, but I’d get something like “oh just quit paying” in writing before trusting a minimum wage CSR.

  27. squishyalt says:

    If you have a problem with WaMu, please call the Office of Thrift Supervision at 1800-842-6929 and let them know about it.

    They oversee WaMu from a regulatory standpoint and are in a much better position than you or I to actually force WaMu to take the appropriate actions in your case.

    When you talk to WaMu next, be sure and mention that you have called the Office of Thrift and Supervision – it kinda takes the wind out of their sails. And, tell WaMu I said “Hi”.

  28. varro says:

    It’s not just WaMu – other mortgage companies (and more important, servicers) seem to not want their customers’ money until the eve of foreclosure.

    I had a huge fiasco trying to get a reinstatement amount for clients of mine on a mortgage, and it took a month and several faxes, including one threatening to stop a planned foreclosure, to get it from either GMAC, Executive Trustee Services, and a law firm.

    The law firm was helpful and seemed to know what they were doing, but was kept out of the loop. GMAC had American call center employees who knew nothing. Executive Trustee Services had a call center that patched me through to *other people trying to cure defaults* instead of a CSR, and had universally lazy account reps (except for one particular person).

  29. backbroken says:

    WaMu obviously gave bad advice and I truly hope this couple keeps their home. But as a lesson to us all, a couple of obvious ‘rules of thumb’ were broken here.

    1. If you can pay your mortgage (and this couple seems to have had the ability to dip into savings to meet their commitment) it is never the best plan of action to decide not to pay it. I don’t care if the CEO of WaMu tells you to stop paying.

    2. When anything important is on the line (health, job, house, car, whatever) never just assume that some anonymous low-level employee is giving you proper advice. Follow up and get everything in writing.

  30. Dyscord says:

    At first I was going to blame the OPs here, but after reading some more, I can say that I still don’t have that much sympathy for them. Yes a family emergency could have come up, but the article says that they were considering dipping into their retirement fund, which says that they had the money to spend. It might not have been desirable, but things happen and if you have the money then go ahead. Now if it said that someone lost their job and they’d have to dip into retirement for a good while, then I could probably have some sympathy.

    However, regardless of if the OP was at fault or not, let’s forget the “dip into retirement” part. If it was someone who could not make payments at all, they’d still be in this mess. WaMu says that you have to be 50 days late in order to even talk to you. And then when you get that late, they put you in foreclosure. How on earth can this be good business? You say you’re going to help people, so you should freaking help them regardless of delinquency. If you still insist on waiting nearly 2 months to help then wait until at least 6 months before you put them in foreclosure….sheesh

  31. ShadowFalls says:

    @varro:

    Its because they want it all and now. If they foreclose, they get some, or all of it now.

    These people are at fault really, but Wamu should try and work things out and stop the foreclosure. WaMu decided to become unreasonable… That is what is most important here. The fact that WaMu says they want to help avoid foreclosure, and when these people want to try and get things back on track, WaMu starts to be difficult.

  32. bigduke says:

    I think the disconnect that was made by all of the people that got in this situation is as follows. They heard “We can’t help you unless you are X amount of days behind” and used that as a justification to stop making payments to put themselves into a situation that they could recieve “help”. It was never defined what that “help” was and wether or not the “help” might be more costly and damaging then biting the bullet and figuring out a way to pay your mortage. What they should have heard from the original conversation or website reading is “Hey you are really not in that bad of shape here, perhaps there is something you can do to solve this problem before we have to help you, because our way of helping you is meant for people who are truly X number of days behind, and it is very likely that there are cheaper alternatives for someone who is not as distressed”

  33. dragonvpm says:

    @iambeaker: Ok, come on seriously now.

    If they’re down to about $15,000 on a mortgage you know they’ve probably been handling it ok for a while now but it’s still a ways away from being paid off. Suddenly it’s bad to spot a problem and try to resolve it before it blows up? For all we know they had 90 days of reserves but one of them lost a job, got injured, an investment might have gone bad, any number of things might have happened to push them from living within their means to not.

    It never ceases to amaze me the attitude some folks have with the holier than though “People should live within their means and have 3-6 months of cash on hand at all times” without knowing anything about why they were in this situation. Sure, that advice will get you through a nice chunk of problems in life (and it’s better than living paycheck to paycheck), but it certainly won’t get you through all or even most of the really big problems (hell if medical issues were involved that might not even get you through a month).

    Let’s look at the bank OTOH,

    They refused to work with them before they were delinquent. If you and I have a deal and I say “hey, I’m having financial problems, but I want to keep paying you and keep you happy with the deal, can you help me out?”, the answer should be “Tell me what’s going on and we can figure something out” and banks (and CCs) never seem to do that. I’ve been lucky enough to never be in quite that much of a bind, but I’ve tried to talk to my mortgage company (Countrywide) in order to pre-emptively deal with an ARM that hadn’t reset yet and they were ENTIRELY unwilling to do anything, at all.

    I’ve mentioned this before. I had an ARM that was going to reset, I didn’t to get hit with much higher payments and I tried to get Countrywide to help me refinance because I was happy with them. They were unwilling to help so I tried to take my business elsewhere. I got refinanced and they ended up buying the note so I didn’t get away from them, but they lost out on the loan fees AND they ended up having to buy the note from the originator. Why? That’s just stupid business (like CCs that won’t negotiate with clients and then write off accounts where people were willing to pay something or the entire amount, but they wanted the balance to stop going up by more than they could pay every month).

  34. LorneReams says:

    @ShadowFalls:

    This is more of a system issue. It hits a certain date and the account gets referred to an attorney. Trust me, the bank absolutely does NOT want to foreclose if they have ANY other resolution. The bank loses an average of $125 per day of a foreclosure action. Most foreclosure timelines push out into the 300+ day timeframe, and this is not even counting REO.

  35. mac-phisto says:

    at what point do we begin to realize that this debacle is not a select few individuals, isn’t limited to subprime borrowers and/or those who bought more house than they could afford & likely to get much, much worse before it gets better?

    there are sections of this country where even people who own their home outright are in danger of losing it b/c they haven’t had a job (or even a prospect) in over a year, unemployment has run out, their savings & retirement are depleted, their credit lines are maxed & they can’t even find a buyer to pay what the house was worth 20 years ago.

    i sympathize with the pestanas. i don’t think they made a very wise decision – virtually any counselor will tell you that rule #1 is: DO NOT EVER STOP PAYING YOUR MORTGAGE EVEN IF YOUR MORTGAGE COMPANY TELLS YOU TO!!!1! regardless, their plight is duplicated all over the u.s. right now. they need help, but no one is willing to help them unless they qualify for a refi or hardship assistance.

  36. opsomath says:

    Why does it surprise anyone that banks encourage you to default? Mortgages and credit card companies’ business model depends on you screwing up and owing them penalties, late fees, or even foreclosing. Gotcha capitalism, I believe it’s called.

    The couple made the mistake of trusting their bank, is all. An unfortunate mistake, but a mistake. Presumably they know better now.

  37. hills says:

    I would think that anytime you stop making payments on your house you risk foreclosure – no matter what a customer rep says on the phone. It’s a no-win situation, but they took a big risk by not paying and assuming they would get help from their bank to bail them out.

  38. legwork says:

    The different faces of banking:

    “We want to help. Foreclosure is the absolute last resort.”
    – PR face. Very important for marketing. It’s the face lawmakers see via press releases and lobbies. WaMu doesn’t get this memo besides at home through their 20 second American Idol ads.

    “We provide all the tools necessary for our agents to help distressed homeowners keep their homes.”
    – Bank management. Translated: “We’ve told our reps, indirectly, to guide the loans into default. High risk loans require too much hand-holding, have a high rate of default even with the assistance, and therefore aren’t our target market.”

    “We can’t work anything out until 60/90/120 days. Call back then.”
    – CSR. Translated: “My screen says I should tell you this. Not sure why since I’ve heard we turn bad loans over to the high-risk dept at 60/90/120 days. But, I’d get fired if I told that to the customers.

    “You’re in foreclosure. Get out.”
    – Law firm representing bank, going through their normal filing/revenue-generation process. They’ve counseled the bank not to show cards before this date lest the borrowers have extra time to seek assistance and create a challenge to their assembly-line, form-filing-for-money process.

    Each face has a unique motivation mostly at odds with “helping the customer.”

    My experience in business is that these things are a result of department-think as a substitute for leadership, and aren’t fixed until a bright light is shone, followed by corrective motivations applied from above. Then everyone high-fives and it’s back to business as usual.

  39. madfrog says:

    That is just plain awful. Gotta love the picture, though, WOO HOO!

  40. snowburnt says:

    @rrrebo: naca

  41. SadSam says:

    I’ve been trying to help a good friend with her student loans (she’s never paid a dime in repayments in 10 years, she was a gov. employee for about 5 of those years and was in a deferment). She cannot afford the monthly payment but can afford to pay about $300 a month. I’ve told her to send $300 a month as it would at least prevent additional interest from being added to the total. The loan company won’t modify the repayment (take the $300 a month rather than the full payment amount) until she is in default. I think, legally, banks can’t help modify the terms until there is an actual default which sucks.

  42. MasterThief says:

    “You f*cked up… you trusted us. Hey, make the best of it!”

  43. johnfrombrooklyn says:

    Many states have laws that say if a business (or landlord) accepts partial payment then technically it’s as good as accepting full payment when you try to foreclose or evict someone. A lot of tenants who try to avoid paying rent will send a tiny check to their leasing office knowing that if the leasing office cashes the check then they’ve stayed off eviction another month.

  44. SOhp101 says:

    @Cocotte: That isn’t even enough. You need something in writing or at the very least a recorded phone call in order to make this risky move.

  45. dragonvpm says:

    @SadSam: I think, legally, banks can’t help modify the terms until there is an actual default which sucks.

    I seriously doubt that, they might not be able to shaft you the way credit cards can, but it would make no sense to not allow for some way to modify the note. It’s a business, but I think the accountants (i.e. the ones who make the rules) get too caught up in making the rules and enforcing them and calculating profits etc… etc… that they stop looking at the people involved. It becomes all about the numbers even to the exclusion of reality.

    I’ve seen too many first hand examples of people who want to pay their debts (just under different terms) and who get shot down by credit card companies and banks only to get sued and then end up negotiating settlements for pennies on the dollar. It’s almost as if they don’t want to give people a way out for fear of losing the people who keep paying month after month even though it ends up costing them in the end when debts go bad. The mortgage “crisis” could probably be significantly improved if banks just said “Ok, we know you folks are in trouble, let’s work out a solution so you can stay in your homes and we can still make some (but not as much) money” sure some would still be deadbeats who deserved to get foreclosed on, but there would be a fair number who want to work something out.

  46. starbreiz says:

    @thejumbo: Clearly you’ve never looked at the housing market in Silicon Valley. Tear down shacks go for $600k easily, because land is such a commodity. You come here for the work, and end up spending your entire paycheck just to keep living here.

  47. cashmerewhore says:

    @dragonvpm:

    I didn’t read all the comments, so I don’t know where your figure of $15K comes from. But I’m going to guess that is is not the amount owed on the mortgage but rather the amount in arrears.

    I don’t understand the mortgage game, but I believe you have to contract to pay both the monthly premium and the amount in arrears, so it actually increases your monthly payment to skip one or two just because you were afraid to dip into savings.

    I’ve had a fixed rate mortgage for three years as of last month through CW (Worst company, 2008), if anything, over the course of those three years my mortgage payment has fluxed maybe +/- $40, depending on school levy (last year it went up), or overestimate on said school levy taxes (it went down this year). We continue to make the original higher payment amount, because that’s what we budgeted for. The little bit offsets the principal ever-so-slightly every month.

  48. WaMu is getting a head start on next year’s “Worst Company” voting.

  49. snowburnt says:

    @SadSam:

    Actually they can do whatever they want to the loan, if you both agree to it. It’s INCREDIBLY simple for them to do so, takes less than 5 minutes a couple clicks of the mouse. Why don’t they do this? It takes large groups of people an incredibly long time to change their habits. Even if you can prove to someone that it’s in their best interests to stop smoking, they keep doing it. Its like with foreclosures, the banks do it because that’s how they do things even if they do stand to lose hundreds of thousands per foreclosure due to lost equity, lawyer fees, etc…and they could make (assuming foreclosure) millions in the long run with two clicks of a mouse.

    stupid stupid shortsighted investors, bankers, servicers…you name it.

  50. anthonyhasp says:

    @SadSam: Have your friend put the $300 in an interest bearing account each month to offset the amount of interest she will need to payback on the loan in the future.

  51. Sadly, this happens a lot. Don’t blame the OPs (at least not until you’re within kicking distance, O Compassionate Ones) — everyone is told to CALL YOUR MORTGAGE COMPANY as soon as you get into trouble (because the economy sucks, you lost your job, somebody got sick, or for some other reason you can’t make your payment or know that you soon won’t be able to), and whose fault is it if your own mortgage company gives you horrible advice??

    It’s true that you need to talk to Loss Mitigation to get anywhere, and that unless you’ve missed payments (usually two), you won’t be automatically transferred to that department; you’ll have to beg and yell. Stupid enough in itself, but on top of it, a lot of CSRs at these horrible disorganized places misinterpret that fact to mean that you can’t GET any help UNTIL you’re behind. I’ve heard from many, many people who were told the same thing. The cynical ones were lucky enough to call a lawyer or a nonprofit before they took such idiotic advice; but the others are guilty of nothing but trusting the people they were TOLD TO TRUST.

    Who happen to be disorganized assholes. *sigh*

  52. Lackey says:

    Dumb, dumb, dumb. I’m sorry, but you have to be seriously off to think that intentionally not making payments is going to make your situation better. Stop relying on others to fix things for you. If you can’t afford that payment, get a second job, put the house on the market and move to a place where you can afford it. NO sympathy for the OP.

  53. HogwartsAlum says:

    “Another time, Harmon Law refused a $12,000 payment, because it was $3,000 short of the total payoff amount, the suit said.”

    See, here’s what I don’t get. I know everyone has said that they make more money keeping people paying month after month, but how in the heck can they do this? It’s completely unreasonable. When we had the ice storm in January 2007, I called my mortgage company to tell them that my payment would be late because I had to pay to stay in a motel for nine days until my power was back on. They would not accept a partial payment either. They said, “Send in the whole payment or nothing at all. It will just have to be late and have the late fee on it.” I was like, WTF?!?!

    If someone gets kicked out of their house, what the frack are the companies gonna get? It’s not like they’re going to sell the thing anytime soon the way things are now. Just take the stinking payment!!!!!

  54. jstonemo says:

    @thejumbo: Yes, there are smaller homes in the world. $275k in the midwest will get you a very nice home. In Massachusetts, it will get you a trailer home with chrome wheels.

  55. iCanhasLs2plz says:

    Biggest bunch of shammers ever. Don’t know why I’m still with them.

  56. shor0814 says:

    @Lackey:
    A second job is good advice, if the OP could find one. As far as selling the house to get out, good luck, the result will probably be the same in this market.

  57. mac-phisto says:

    @HogwartsAlum: this is essentially why you shouldn’t listen to your bank if they tell you to stop paying.

    once your loan enters foreclosure, or even pre-foreclosure, bank representatives are counseled not to accept any payment short of payment of past due balance + fees. the reason is that acceptance of a partial amount in most states resets the “foreclosure clock” to 0 – even if the partial amount is nominal in comparison to what is needed to catch the loan back up.

    as an example, let’s say i owe 4 months & my house is about to enter foreclosure. i pay 1 month (the bank accepts it) & foreclosure is halted COMPLETELY. i stop paying again, & now my loan would have to reach 7 months delinquent before the bank was where it was before. essentially, i could stay in the house indefinitely simply by paying once every 3-4 months.

    however, offering $12,000 of a $15,000 balance due & having the bank reject it – well that seems awfully silly to me also.

  58. Ninjanice says:

    It’s Pestanas fault that they went into foreclosure. They definitely should have known that by not making payments they would go into foreclosure and their credit would suffer as a result. However, I think the point of the article was that WaMu talks about how they are trying to work with people in foreclosure, but in reality, they aren’t helping anyone avoid foreclosure. Maybe the Pestanas should have tried harder to reach WaMu, or go to a local branch so they could talk to a live person. I know if my house was being foreclosed on, I’d be doing a lot more than calling a couple times and then leaving a message. I’m pretty sure that if a company isn’t answering the phone, they aren’t checking their messages either.

  59. LorneReams says:

    @HogwartsAlum:

    If they accept the payment and they already started the foreclosure action, the action is considered null and void, and would have to be started over from scratch. I’m unsure what happened in this case, but it’s a common practice for a borrower who is thousands of dollars behind and in foreclosure to try to get the bank to accept a standard payment (like a few hundred), if the bank screws up and accepts the payment, the customer now is able to walk into court and say, “they accepted my payment” and that is all they need to do to have the foreclosure suit dismissed and have the bank have to start over from day one. Because of this, maybe bank system outright refuse to accept any payment except a full reinstatement of the loan. Technically, they don’t even need to accept that as when the loan hits a certain threshold (it varies, but most it’s 120 day past due) the loan immediately becomes due in full.

  60. RoninianHoon says:

    The people who work here are rejects from hell’s customer service department…

  61. HogwartsAlum says:

    @mac-phisto:

    Well that makes more sense if it’s in foreclosure and you are offering to pay only one payment. But if you owe $15,000 and you offer to pay $12,000, that is ALMOST THE WHOLE AMOUNT. I just don’t get that. I’m tired of companies (banks, etc.) that just won’t work with people anymore.

  62. dragonvpm says:

    @cashmerewhore:

    The figure of $15,000 came from the OP:

    Another time, Harmon Law refused a $12,000 payment, because it was $3,000 short of the total payoff amount

    WRT what has to happen, that’s completely up to the borrower and the lender. As others have noted, it’s a contract if both parties are open to negotiating it they can come up with any number of things to resolve it, but the don’t.

    That’s where you get stuff like:

    “I believe you have to contract to pay both the monthly premium and the amount in arrears, so it actually increases your monthly payment to skip one or two just because you were afraid to dip into savings.”

    There’s not magical contract fairy that makes that be the case, it’s just what some lenders insist on. It’s almost as if they want to force you to give them as much money as possible and no one has ever explained to them that while people will often try to pay of their obligations to the point where it’s harming them, at some point many of them will get fed up with the abuse (i.e. the harassing phone calls, rude customer service, etc…) and they’ll blow off the obligation entirely because they’re being treated so badly.