Homeowner Says Bank Told Him To Skip Payments, Then Foreclosed
When MC lost his second job he had trouble affording his $3,000 mortgage payment. He called his mortgage holder, Flag Star Bank, asking for a break, but the bank told him there was nothing it could do for him unless he skipped payments and submitted a loan modification package.
Can you tell where this is going? MC went along with the scheme, then discovered the bank was foreclosing on him. He writes:
Back in November of last year I called my bank (Flag Star Bank) on several occasions and asked them to help me due to I was paying 3000.00 per month in mortgage and I couldn't afford to continue that payment after loosing my second job. I was told on two separate calls that there was nothing they could due until I was late or my loan was delinquent. I told them that I didn't want to have late payments reported to my credit and they informed me that there were several programs to help and all I had to do is miss some payments.
I proceeded to miss some payments (3 months) and I then contacted them and was told to submit a Loan Modification package. I submitted the package in June and was not called or contacted for for about 45 days. Then I got a letter asking for more documents. Pay check stubs for two months and bank statements for two months. I sent the new docs and was told that the process is in order and I will hear something in 7 to 10 days. I didn't hear for a week or so and then got a letter in the mail saying my property had a sell date of Sept 15. I then got really scared and contact them several times asking why this was happening and what I needed to do. I spoke to several people over there and each of them told me the sell date would be postpone for 30 days while they reviewed the loan modification package. I confirmed with a second and third call and was told the same thing. I was even told the lady that I was talking to was sending an email to the attorney office right after the call telling them to postpone the sell date. After all this my property was sold on Sept 15th back to the bank. My family and I are now homeless and out on the street. I have been told since then that the case is being referred to the attorney office for eviction. I did everything they ask and I was treated like nothing. I have no house, I have to move and my family has to say goodbye to our house.
We are now looking for rentals but with the late mortgage payments my credit is screwed and things are not looking good. I paid 3024.00 on a mortgage for 2 years that I will never see again. I feel like an idiot but hopefully they will get what they got coming.
To compound a bad situation, now MC is having trouble finding a place that will rent to him since his credit is besmurged by the foreclosure. Granted, MC should have realized a foreclosure was possible if he read his mortgage contract, but it was within reason to trust the bank's advice in these times, which are rife with skipped payments and easy loan modifications. Any advice for MC?
(Photo: austrini)
(Thanks, Raj!)
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Comments:
This loan modification stuff is just bad news. I don't think I've heard of one story with a positive ending.
Should have gotten an attorney. Where has this guy been living? Under a rock?
This is good evidence we need a federal law that landlords CANNOT consider nor turn people down because of a foreclosure. PERIOD.
People have to be able to mother fricking live somewhere for PISS sake.
I can only imagine what the OP faces next - the courts taking away the kids for being an unfit parent because he is homeless?
I would sue and harass the bank for the rest of my life, and start moving into their lobby, with kids, furniture, etc. Make a fricking scene every day in front of a lot of other customers until they make it right.
Get a big banner viewable from the street saying "look at our homeless family thank you Flag Star bank" and all sit together in their parking lot after they kick you out of the lobby.
@Areyouagoodlittleconsumer: CANNOT...consider the foreclosure as a reason to turn them down, that is...
Yeah, this really sucks. He needed help, and the bank told him a route to take to get that help, then the help never came. Yes, his mortgage said they could foreclose. Yes, mortgage help is never guaranteed. This guy was trying to take the only option he had, and it turns out he didn't even have that option.
I hope someone can help him out.
I'm sorry, but I fail to have sympathy for someone who has a $3000 house payment based upon having a second job. Talk about budgeting yourself to every last dime.
And then he thinks missing some house payments is a good idea because some phone rep at the bank said so? What form of logic is this exactly? If life has taught us anything is that we need statements in writing if we want to actually rely upon them. Somehow I doubt you will ever get a bank to send you a letter suggesting you miss a few payments.
"... rife with skipped payments and easy loan modifications."
What are these *easy* loan modification of which you speak? Where might I find one? We've been struggling to get ours since April.
Congressman definitely needs to be contacted.
BofA told me the same thing. I refused to "just skip some payments" per their directive until I had a legally binding forebearance agreement in place.
People have got to stop relying on what banks/mortgage brokers/bums on the street tell them to do, thinking they've got their best interests at heart.
I feel for this guy, I really do. But he's dug his own grave without this advice in writing from his bank.. :(
Oh and be sure you make a bloody mess out of your former home too and make it a museum to what they did to you. Make it HELL for whatever bank person has to deal with it. Make it ugly, nasty and personal. They fricking lied to you now make them fricking pay.
I might even visit the family of whoever sent it to foreclosure while they are at work saying "look what your husband / wife" did to us and start screaming and crying on their doorstep.
They interfered with and ruined your life - only fair.
Again, this is a case where individuals need to record these phone calls. Being evicted for following your banks advice in getting a loan modification, and end up getting foreclosed on should be considered fraud.
@Areyouagoodlittleconsumer: I'm sorry - landlords need tools to stop themselves from offering a lease to a 'deadbeat' tenant. Do any of you know how hard it is to evict a deadbeat tenant? No one will give the landlords a break from THEIR mounting bills while trying to evict a tenant who won't or can not pay their monthly fees.
Binding and torture seems to be the trend...
@Areyouagoodlittleconsumer: Never going to happen, you can't force a landlord to take on that risk unless the law also says the gov will make it right if that person doesn't pay their rent. Most people in this situation end up moving in with family or low class motels.
If he has letters instructing him to delay payments whats the problem? Honestly the OP was way to trusting, for one most people in service postions don't care about anything but themselves, they aren't to blame, mgmt drills them that money and time are all that matter.
Always get signed documents and statements for everything. Especially if they tell you not to worry about your house being sold next week.
@Areyouagoodlittleconsumer: All you're doing by destroying your home is making it a PITA for the next person who buys it - the bank will just sell it as a forelosure, and put it on the market to someone to buy - sight unseen.
Two wrongs don't make a right. I hope you were being sarcastic.
@Trai_Dep: OK, advice in poor taste.
But when the laws don't suffice, expect the masses to do nutty things.
@CityGuySailing: Exactly, tell landlords they can't turn down people with foreclosures, a lot of them will get out of the business and find a new way to make money. That won't help these people get a place, because the law of supply and demand will send rent sky high.
@katstermonster: Oh they are out there, but they take a LOT of work. And you really have to keep on top of things. Nothing is set up to be borrower-friendly.
In CT, the one firm that files the most foreclosures is relentless, and will march ahead no matter how many times you tell them the bank has modification or short sale paperwork and the homeowner has been told to sit tight. They don't return calls, respond to requests for information, or do anything at all, really, besides file one motion after another.
Most banks are MONTHS behind, and I really don't see how someone without an attorney would be able to delay a foreclosure while the bank tries to catch up. It is hard even when you know what you are doing.
I'm a lawyer in Flint Michigan, the rustiest part of the rust belt, and this sort of crap has been going on for about ten years here.
@pinkbunnyslippers: Plus at this point the bank owns it. They can charge you with vandalism or sue you for damages. Plus if you harass some random (and lets be honest, innocent) employee who happened to process the foreclosure then you are probably going to jail.
@CityGuySailing: I would say that a majority of former homeowners are not deadbeats. There is a big difference between being tricked by a broker who sold you an option ARM, and just not bothering to pay your bills. I thought at this point in the financial crisis, with all the facts that have come out about mortgage fraud, unemployment, and drastic credit card interest rate increases, people would stop throwing around blame and nastiness.
@Karita: They still shouldn't be required to rent to them. If I were a landlord, I'd offer to allow them to send me documentation proving that it was something like this where the bank didn't hold up to their end, and take it into consideration, but everything else would have to be perfect.
Oh yeah, unless you don't read what you sign, they can't lie to you ( or at least can't get you to agree to something that isn't what they told you you were agreeing to )
Get shit in writing. Always. Get an agreement for a forebearance before you start skipping payments.
What happened to the money MC didn't send the bank for three months? If he was banking it I'm surprised he couldnt get a postponement on the foreclosure by paying it to the bank.
If you ever do skip payments for something like this, or a refinance always bank that money in case it comes back to bite you. you may still be out late fees but spending that money is just dumb (not saying he did this).
@Karita: How, pray tell, can a landlord tell the difference between an honest renter, and a dishonest one? Is there a magic touchstone? You seem to forget that the overwhelming majority of landlords have bills to pay, too.
@bhr: I don't think he *had* the money for the 3 months to send to the bank, hence not sending it... >.>
At the very beginning did he get his instructions in writing to quit paying? I can't think there is anyone in this country that doesn't know if you quit paying for something, that sooner or later the lien holder is going to come.
If it ain't in writing it ain't no good.
So, wait. You want him to harass someone else as punishment because he chose to live beyond his means?
Relying on a second job to pay your mortgage is pretty risky, and not making payments on a mortgage is even riskier. The bank was at fault here, but MC isn't innocent.
@Karita: Also, there is a difference between blaming someone for something on their credit report, and just trying to protect your livelyhood/family. Wether something is their fault or not, my family and the ability to support them will always come first in my head. That means if my income depends on them paying on time, I pay attention to EVERYTHING on their credit report. Why? Because if I don't I risk not being able to pay my mortgage.
@Areyouagoodlittleconsumer:
If there were such a law, I wouldn't want to live in this country. You can't force me to rent to someone who has a history of not paying their bills, regardless of the reason. Landlords usually are paying a mortgage, too.
@Costner:
Well, this is America. We've had this "American Dream" foisted upon us that in order to be a success in this country, you have to own a nice house. It's bullshit.
@katstermonster: Our modification is now 4 years and 10 months away from an "ending" but so far all is good. We were contacted directly by the holder of the note and offered a rate reduction for a term of 60 months. They said they were offering this program to their "tier one" clients that were in good standing, acknowledging that the economy is faltering and wanting to keep their good clients in good standing. Yada yada yada.
Yes, I paid a fee up front. Thirty days later our rate had dropped by 3%, our monthly payments by $500. This will save $30,000 over the length of the loan. Crazier still - the servicer is Bank of America and even they didn't screw anything up on this one.
@tbax929 is rooting for a Phillies repeat: Exactly. Many landlords are living paycheck to paycheck as much as their renters. Not all of them are huge companies. Why should the gov mandate that landlords put everything they have at risk to help someone who hasn't proven they are a safe risk.
We need to get beyond this mentality that if someone is willing to extend you credit it means you can afford to pay back the loan. Maybe then we'll all stop living so far beyond our means.
@Areyouagoodlittleconsumer: Here's a suggestion. Base it on anti-discrimination laws that already exist to protect people with disabilities, minorities etc. I believe the recession has had a greater impact on already-protected classes. Why can't this type of protection be added to current housing laws?
There is a HUGE FUCKING DIFFERENCE between someone who lost their home due to a bad loan, or a job loss, or a medical emergency and someone who just opens credit cards and then decides not to pay. @K-Bo Are you saying that millions of people should be stuck on couches or nasty motels for seven years, until their misfortune drops off their credit report? I represent lawyers, doctors, accountants, furniture salesmen, scientists, utility workers and customer service agents in their foreclosures. Every one of them has a set of circumstances that label them as anything but deadbeats. Not one of them deserves a complete lack of compassion or understanding. I don't have one client who isn't working full time and earning decent money.
Landlords aren't going to get out of the business. Maybe the ones who bought a two-family home with dreams of huge profits, but there is a lot of money in being a landlord. Why do you think Section 8 project owners are so wealthy? You can repeat snippets you've heard on the news, or read on the internet, but actual research and understanding would be a lot more useful.
God forbid you never lose your job, go through a divorce or get sick.
This is not new.. in fact Aurora Loan Services told me the exact same thing (They of course have their own history of being problamatic to their customers). I of course can afford my mortgage at the moment, but when it resets, I might have an issue as my house is currently worth about 100k less then what I paid for it and no company wants to touch me to refi. But that is not the point here..
Aurora basically told my wife and I, that for us to receive any assistance at all, we have to stop paying our mortgage. I of course balked at that as did my wife.. So we are plodding along for now, we will see what happens next year...
Oh, and if I ever got into the situation where I know the lender is screwing me and about to take ownership of the house.. I will not so much vandalize it, as much as I would reinvest the time and materials I put into the house.. ie I will strip every single thing I can from the house and sell it to recoup some of my costs and help me move on, not to be malicious, but since it seems the banks are only looking out for themselves, I will do the same..
@pinkbunnyslippers: If he couldnt send anything then why would they modify the loan. Loan modifications do not make loans go away, they just either lock in a rate or lower payments, but not by much.
Personally, when I saw myself unable to afford my home loan (extended unemployment plus a high payment) I negotiated a short sale rather then stay in a home that even modified was going to be tough to pay.
@CityGuySailing: Landlords can pull credit reports and see payment histories. They can verify employment. They can check criminal records. They can check eviction filings. It's really quite easy.
So you are the type of person who feels it is the banks fault that someone can't afford the mortgage they agreed to? That makes perfect sense.
Vandalism can lead to criminal charges, so I fail to see the merit in that. Plus - if the value of the property is vastly diminished, the soon to be ex-homeowner can actually be held responsible for the difference even after their foreclosure.
Taking the path you suggest is akin to throwing a tempur tantrum. There should be legislation in place that dictates if a person does that type of thing that they can never get another home loan until they have paid for the damages they incurred on the first one.
Way to suggest the high road buddy.
attorneys cost money so its not a easy answer.
@SacraBos: I don't beleive it is legal to record phone calls unless you tell the party on the other end of the line that you are doing so.
Therefore such recordings cannot be used in court and are essentially worthless. Most companies have policies in place that dictate they won't even talk to someone who says they are recording for fear of their comments being used against them in court proceedings.
With our increasingly litigeious society.... I don't really blame them.
What's the big deal? He said he couldn't afford his mortgage payments, so the end result would have been foreclosure one way or the other.
Or maybe he really COULD afford his mortgage, and was just trying to pressure the bank into a modification, in which case he rolled the dice and lost.
Either way, not much sympathy from me.
@plj: Should have been in writing, but agreements are binding regardless of whether they are written down.
His issue will be proving it. I can't imagine he'd have a tough time doing that, as lots of banks up until very recently were saying that you had to be behind in payments before they would even talk to you.
@Karita: I'm saying that they shouldn't be allowed to drag others down with them, and if that means one day I live in that situation, so be it, I made my bed, I'll sleep in it. I don't lack compassion for them, I just have compassion for the people trying to make a living by being landlords, and more than that, I understand they do it to make money, and if it gets to where they can't because they HAVE to take bad risks, they will get out, leaving no rental places to be rented out, therefor leaving the people you are worried about in the same bad position. Also, if you forgive something like this for someone because they are a protected class, then don't forgive it for the non protected class, you are discriminating against the non- protected class. Should be just as illegal. It's illegal to discriminate because of race or disabilities, even when the one you are discriminating against is not in the class that is traditionally discriminated against.
@Costner: Have you ever considered that maybe he had an ARM that reset on him and he took that second job just so he wouldn't lose his home? Stories like the OP's are bountiful in the news and on the Interweb at the moment.
Since we don't know how he ended up with a $3K monthly mortgage, a rush to judgment might not be warranted.
@Costner: Yes lets blame the guy who has to now live on the streets because he lost his job and made an effort to make things right with the bank. And we'll blame you when you lose your job and also have to live on the streets too.
My sympathy for being on the street, but why did you buy a house with a $3k monthly payment if it was only possible via a second job? You could have just rented for probably 1/3 your mortgage and would still be fine today. You would have a roof over your family's heads.
I don't understand the motivation with people and their houses. I could believe that 9 out of 10 people would give up their first born to keep their house in the event of financial trouble.
A 3K per month mortgage? I hope his annual income is at least 200K. Now any down payment, mortgage, tax, insurance, repairs and upgrade money is gone forever. Your credit is shot and you are on the street. Chalk one up to being a homeowner...or former homeowner.
@Costner: I want to agree with you because as I figured out, assuming the mortgage rate was between 5% and 7% this guy was living in a half million dollar home.
The problem I have with your statement, is anyone living in that expensive of a home probably isn't working 2 jobs at a time, but rather lost one job, exhausted emergency funds looking for another, and then found another which he lost as well. That's my understanding of losing his 2nd job.
The guy was an idiot for not doing his own research and being on the banks ass daily while he was missing payments because the though of being foreclosed on should have been fresh in his mind. Plus he had lots of time since he was unemployed!
I feel bad for him though because in the end, he trusted someone who was supposed to be an expert and they screwed him. Last time I checked, if I paid anyone for a service and their fix or advice sucked, I'd be able to sue them.
Oh and just an FYI to the OP, its pretty easy to find places to live without having them perform a background and credit check. I'm yet to have a landlord actually perform one on me and I've rented 5-6 different places in the past 4 years. Look for families renting their houses or people who want you to take over their leases.
Contact your congresscritter.