Ever since the housing bubble burst, we’ve run a number of stories about homeowners who had been told the only way they could qualify for a loan modification was to stop paying their mortgage for a few months, only to end up in foreclosure because the lender had no record of a modification application. This is not one of those stories, though the ending is the same.
A real estate agent in New Jersey says he has been making his mortgage payments to Bank of America on time since buying his house in 2005. But when times got a little tough in 2009, he thought it couldn’t hurt to ask the bank for a modification.
He was wrong.
“I would have been better going to a loan shark and borrowing all that money,” he tells the Newark Star-Ledger. “At least with the street mafia, you know where you stand.”
When the homeowner first applied for the modification he was given the standard skip-some-payments line by the bank, but he didn’t want to go down that road since he could still make the current payments: “I said I won’t miss payments. If I have a debt, I pay it.”
He never heard back from the bank and continued making payments until he got a letter in March 2011 letting him know that he was somehow two months behind on his mortgage.
“I called and said that’s impossible,” he recalls. “I had copies of all my payments on my bank statement.”
A promise from the bank to look into the situation and call back in 10 days turned into a three-week wait. Finally, a BofA supervisor called to tell him he’d actually been approved for a temporary three-month modification that was to have run from October-December 2010. For some reason, he was never told about this, but there was good news.
“He told me it was now squared away and that I was approved for the modification,” the homeowner tells the Star-Ledger, saying the bank promised he would receive info on the program in — you guessed it — 10 days.
Those 10 days came and went without anything from BofA. And then he finally received a letter from the bank with the news that, “According to our records, payment for your home loan is past due.”
In mid-July, yet another letter arrived, this time bearing the sunny news that he was approved for a rate reduction on a modified mortgage. More information would be coming in — repeat after me — 10 days.
He didn’t even have to wait that long, because it was only two days until he got an intent-to-foreclose notice from BofA.
Oh, not to mention that Bank of America reported these not-at-all-missed missing payments to the credit bureaus, leading Citibank to lower the homeowner’s credit limit on the credit card account he’d had for 20 years.
“My credit score for the last 21 years has been in the high 700s,” he said. “This has ruined my credit.”
The Star-Ledger reached out to BofA for some sort of explanation for this mess and they were eventually told that after the homeowner had been approved for the modification program:
He continued making his regular payments during the trial payment period, which the bank posted and reported as partial payments under a trial payment plan rather than full payments on the account… This resulted in a notice to accelerate foreclosure, a precursor to… foreclosure, being sent in error.
A bank rep says the account has been squared away and corrections have been sent to the credit bureaus.
But, as the Star-Ledger points out, none of this explains why payments made in full were showing up as only partial payments.
The newspaper also asked BofA as to whether the homeowner should be paying the full, unmodified mortgage payments or the modified payments.
“If [the homeowner] is interested in being reviewed for a modification, and can demonstrate a hardship, we can assign a home retention specialist to work with him,” said the rep.
And when the Star-Ledger pointed out that the homeowner had been told as recently as July 19 that he’d qualified for a modification, well… BofA just didn’t reply.
“The process was a disgrace and it took a threat from the media to get them to move? It annoys me that they have no respect for the common man,” says the exasperated homeowner. “The least they can do is say now that they’ve screwed up, now that they caused me all this pain, they will modify my loan.”