Bank Of America Kicks Man Out Of Mortgage Modification Program Over 80 Cents

Tom was in danger of foreclosure and losing his home, so when he was approved for a mortgage modification program by Bank of America, he was relieved. As long as he made his new lower monthly payments on time for three months, he was golden. But one slip of the fingers on his phone’s keypad changed everything, and fast.

The Tampa Bay Tribune tells Tom’s story, wherein he was paying by phone for his loan, and accidentally hit “0” instead of “8.” That meant he paid $615.02 instead of $615.82 on his second trial payment.

Boom! A computer program triggered by the payment difference kicked him out of the program for breaking his modification contract.

As soon as Tom realized what had happened, he called customer service, and a rep told him to send a check for 80 cents. Despite the seeming silliness of it, Tom sent it off right away.

“I want to keep my home,” he told the paper. “And to lose it over 80 cents is crazy.”

The check was cashed, and Tom thought he was in the clear. Until the next month, when Bank of America returned his 80 cents, plus that month’s payment, and sent a letter dooming him.

“Your loan is not eligible for the Fannie Mae modification program because you did not make all the required trial period plan payments by the end of the trial period.”

Foreclosure marched forward and Tom started to get really worried.

There is a happy ending for Tom, however, as Bank of America spokeswoman Jumana Bauwens says he is now back with the lower monthly payments, partly because the problem was caused by the bank’s computer program immediately shutting Tom out of the program. Fannie Mae owns his loan, but they are in charge of servicing it.
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“He’s in the process of getting a permanent modification,” Bauwens said. “The paperwork is not finalized, but that 80 cent error is not going to create any additional issues for him.”

And Tom isn’t only — other consumers have gotten into deep water fast because computers see things so cut and dry. Homeowners need to step in and take action when there are glitches on their accounts.

Meanwhile, says the paper, Tom is going to pay by mail.

Typo involving 80 cents nearly cost man his home [Tampa Bay Tribune]

Comments

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  1. NotATool says:

    “Meanwhile, says the paper, Tom is going to pay by mail.” And risk the mail getting lost? A better strategy might be to type more carefully when making an online payment…

    • BBBB says:

      For very important payments like this I try to pay in person and get a receipt (although sometimes that is not possible even when submitting payment to a bank – the loan servicing company might be a separate entity owned by the same parent company. Once I saw a bank branded credit card where the bank would not accept credit card payments at a branch.)

    • sspeedracer says:

      A better strategy might be not to overextend oneself on loans in the first place.

      • Conformist138 says:

        *sigh* are you just a troll or what? Because we all know every single thing about Tom and his life, right? We know he’s just in irresponsible over-spender living in his mcmansion and nothing in his life ever went wrong unless it was entirely his own fault.

        Or maybe he got laid off and couldn’t find work or had to take a major paycut. Or maybe he or a loved one became ill or was injured in some way. Or maybe it’s none of our business how he ended up needing a modification and we should focus on the real issue: People can risk being kicked out of their homes for less than a dollar while companies like BoA see the entire value of his house as little more than a rounding error.

      • cowboyesfan says:

        He couldn’t afford his house. He does not deserve any loan modifications.

        • Kestris says:

          How do you know that extenuating circumstances didn’t make it so he could no longer afford the mortagage, whereas when he originally got it, he could?

          Oh right, that takes common sense and a modicum of actual thinking beyond the fact he needed a loan mod in the first place.

          Must be nice up there on that pedestal you’ve placed yourself on.

        • Ihmhi says:

          People make bad decisions every day. Leaving people out in the cold because of those bad decisions (and with no chance to fix their situation) is exactly the opposite of what society is supposed to do.

          Yes, we should try our best to honor our agreements, but we also need to be able to compromise and work together for the betterment of *everyone*, not just the people with the money and power. Everyone can come out a winner if both sides would just be reasonable.

          I’m frankly amazed that BoA has actually turned out to be reasonable in this case. It doesn’t make up for all of the bad stuff they’ve done over the years, but it’s a start.

        • RvLeshrac says:

          He should do like a good business, and simply stop paying the mortgage while looking for a new house, right? Because that’s what good businesses do: They stop paying on the contract, that being the reason the contract exists in the first place, to put processes in place for the lender to reclaim the property, at a substantial loss.

          Alternately, if BoA doesn’t want to be in the property-ownership business and doesn’t want to lose most of the loan, they can modify his loan and collect most, if not all, of the money.

  2. Cat says:

    I, for one, welcome our new uncaring, just the facts, Ma’am, computer overlords.

  3. JohnDeere says:

    there are some situations that computers should not be involved in at all, this is one, stock trading is another.

    • dwtomek says:

      Back to the ol’ stock ticker for you then, eh? I’m guessing you just mean in the sense of automated trading based on predetermined logic sets, though.

    • PsychoRaven says:

      You can have computers involved. You just need someone to monitor them. To check and make sure that something like this doesn’t happen. Sadly so many companies just assume that the computer is handling everything and they forget that it’s not human. It can’t make a judgement call like a human can. It can’t sit there and go well this guy paid all but 80 cents. Maybe he meant to and made a mistake. It just sees that it wasn’t fully paid. If someone was monitoring things they could have caught that and done something to prevent what happened from happening.

      So yea. You can have computers. You just need that human component too.

  4. Nigerian prince looking for business partner says:

    At least the issue was resolved. It’s disgusting but a minor typo when paying a mortgage, taxes, or health insurance can ruin your life.

    • Velvet Jones says:

      I had the same thing happen with a pay by phone 1040 about a 12 years ago. I mis-typed the payment by around 10 cents, the IRS slapped me with a penalty of over $5.00. A trivial amount, but compared to the amount that was underpaid it was ridiculous.

  5. sprybuzzard says:

    Years ago, I mistyped an account number when trying to pay my one CC online, which bounced the payment and I had to pay by check and mail for 6 months. Totally my fault but I’m just as human as Tom. Fortunately I wasn’t in danger of losing my house over it. I’m glad this worked out for him.

  6. VectorVictor says:

    “And Tom isn’t only”

    Isn’t only WHAT, Consumerist? I hate it when these articles end on a cliffhanger.

  7. katekate is squared says:

    Once I was paying my BOA credit card by phone and somehow managed to schedule the payment for June 10, 2012, so, uh, I can’t really blame the guy. (Oddly BOA waived the late fee when we figured out the problem.) BOA is notorious for their loan modification snafus, though.

  8. Murph1908 says:

    So, what’s the story here?

    Guy makes a mistake. Computer system does what it’s supposed to do. Guy talks to human. Issue is fixed.

    Isn’t this what is supposed to happen?

    • theblackdog says:

      You’re missing a few steps.

      Guy talks to human, told how to fix it, guy performs fix.

      Bank computer rejects fix, tells guy he’s screwed

      Guy talks to another human, human finally fixes it permanently for guy.

      • dwtomek says:

        @theblackdog
        Guy talks to another human, human finally fixes it permanently for guy…presumably.
        FTFY
        This is BoA we’re talking about after all.

      • ARP says:

        …and I’m wondering if going to the media or suggesting going to the media was a part of all this to get it fixed.

        I seriously doubt BoA did this out of the goodness of their hearts.

      • Murph1908 says:

        Yeah, those steps were missed.

        But the original error caused the wheels to start turning. The default went to Fannie Mae, and even though he had cleared it with BoA, Fannie Mae’s process was already started, leading to it being kicked back to BoA, and the continuation of the issue.

        Dude screwed up, and it took him a couple of calls to fix it. So?

    • Mr. Fix-It says: "Canadian Bacon is best bacon!" says:

      Guy makes a mistake. Computer system does what it’s supposed to do. Guy talks to human. Issue is fixed.

      Emphasis mine, but that’s usually the part where BoA stops giving a shit…

  9. nicless says:

    I’m glad Tom isn’t only. I was worried.

  10. JGKojak says:

    The big deal is that he should not have been subjected to this stress over 80 cents.

    Guess what? It’s REAL EASY to program in something where if there is less than 1% or 2% of the payment delinquent, it kicks it out and either sends you a note, sends a note to a HUMAN to look into it, or just rolls it over to your next bill with a reminder.

    The only reason for the hard-ass approach is BOA WANTS to foreclose. Period.

    • consumeristjohnny says:

      Really? SO BOA wants to pay taxes on property that wont sell? They want to service a property THEY DONT EVEN OWN THE MORTGAGE ON. RTFA, it is owned by Fannie Mae. Banks do not want to foreclose. They want to get paid. They may want to foreclose if there is a boat load of equity, but I highly doubt that is the case if he needs a loan mod.
      Based on your numbers, the computer should allow 1-2% mistake rates. I hope you will be ok with that on your paycheck
      The issue was resolved, but the OP SHOULD have stress when he screws up. Remember, he has asked to change his contract, and on the second payment he can’t be bothered to double or triple check his work. Seems like that is a sign of more mistakes to come.

      • MrEvil says:

        I’m thinking what JGKojak is getting at is that if there’s an error on an amount within a few percentage points that the transaction be flagged by the computer for review by a human. Had the system flagged Tom’s payment for review a person would have looked at the 80 cent discrepancy and probably called up Tom to have him submit a second 80 cent payment. I mean 80 cent discrepancy would be due to user error more than the user not having the eighty cents.

        This way we don’t have the computer just saying Okily dokily forget about the 80 cents. But we won’t end up with 80 cents getting someone foreclosed on.

      • Dalsnsetters says:

        Your comments are so arrogant…..have you never made a mistake? Are you sooooo perfect that this could never ever possibly ever in the whole of your time on this planet ever happen to you???

        Since you seem to be so perfect (I say this based on your comments in other threads….srsly folks, check out his posting history, this guy is perfect!), I need proof of your perfection. Please first part a body of water and then walk on that water to prove your perfection. If you are unwilling to do those two things, you really need to humble yourself a bit. Your arrogance is just repulsive.

        Please take note of the italics and boldface above and stop randomly capitalizing words in your posts. Use the tags. They are your friend. Caps are not.

  11. Dr. Ned - This underwear is Sofa King Comfortable! says:

    “He’s in the process of getting a permanent modification,” Bauwens said. “The paperwork is not finalized, but that 80 cent error is not going to create any additional issues for him.”

    That is, until next month when he has to jump through the same hoops because no one has made any corrections or notes to his account.

  12. Costner says:

    This is why I always pay extra on my mortgage. Well this isn’t the only reason, but aside from the fact that it makes me feel good to pay a bit extra, I also like the idea of rounding up.

    Thus if my mortgage payment was $615.82 I would round up to $650 or $700 and call it a day. Maybe you can’t do that during a mortgage modification…I can’t really say, but I have always paid a few hundred extra on my traditional mortgage. No it isn’t always easy, but knowing I’m that much closer to being debt free takes the sting away.

  13. Remarkable Melba Kramer says:

    I bet that the position of “Bank of America Spokesperson” has some job security with it.

  14. cowboyesfan says:

    Why are tax payers money being spent to give loan modifications to deadbeat home owners in the first place??

  15. PLATTWORX says:

    In 2012 Tom was making mortgage payments by touch tone phone system? Really? Pay by PHONE?

    Now, in order to make sure his payments get there, he is going to use the USPS… where loosing mail and delivering it late is a hallmark?

    Glad Tom got this worked out, but we can see he is not exactly the most educated consumer. Even the 1990 “pay by phone” system would have asked him to verify the amount (which was 80 cents short) before completing the call. Perhaps some night classes in personal finance Tom?

    • NinjaPanda says:

      I assumed it meant from a phone app. However, for all we know, Tom could also have cut internet to save money.

  16. One-Eyed Jack says:

    Why can’t the automated phone system “read” the payment back to him.

    “You entered a payment amount of $615.02. If this is correct, press 1.” etc.

    • homehome says:

      Actually it does read the amount back. Every autopay system over the phone I’ve used does read it back. I don’t know of a system that doesn’t.

  17. bellabell says:

    taken from another forum:

    We as consumers should have this clause added in all of our dealing with these companies:

    Miscellaneous Bank recognizes that Borrowers are only human and that they get a lot of junk mail and things happen in life. Bank therefore understands that the Borrowers will make reasonable effort to pay the loan but from time to time temporary and inadvertent problems make occur in their lives that may result in them not paying or not paying on time. In the event of such problems the Bank agrees to provide prompt and clear notice to Borrower and to allow them a reasonable opportunity to cure the error. In no event shall such problems constitute a material breach under this agreement.

  18. msky says:

    Computer says no.

  19. Lyn Torden says:

    In general, every business, not just big banks, should be required by law to address errors that happen … unless they can prove their computers are perfectly flawless (which is impossible). Every CSR that refuses needs to spend a week in jail.

  20. Browsing says:

    Tom isn’t only….may i suggest http://www.editteach.org/ or any sort of copy editor if you expect a donation this year…I’m giving up reading this site….

  21. Magical Pig says:

    The issue at hand is not that he keyed in the wrong amount or that computer flagged it as insufficient. That part worked like it was supposed to. Computers do not go “oh it is only 80 cents”

    The first BOA rep also did what she was supposed to. Under normal SOP’s sending in an additional 80 cent payment should have corrected the problem.

    That should have been the end of it.

    The problem is when BOA’s computers terminated the plan. THAT is where the problem was. They did not have the authority (From Fannie Mae) to do so.

    While BOA is clearly at fault it wasn’t a cluster wad of ineptness as people want to make it out to. Just a single act of ineptness on the part of a computer. (Prob affecting thousands, but any hoo)

    Also the part lacking in the original article is that it didn’t say what was involved in getting BOA’s attention. That is key to the story – yet is missing.

  22. DragonThermo says:

    That’s how BoA has been a contender for Worst Corporation in America every year… kicking people out of their homes over 80 cents.

  23. scoosdad says:

    It would be delicious irony if BofA causes the final death of Sears by accidentally foreclosing on the entire chain’s property over a similar error.

  24. calchip says:

    50 bucks says this isn’t a small oversight in BofA’s computer system, but an intentionally programmed “feature” so they can get 3 or 4 extra payments out of the hapless borrower before foreclosing anyway.

    The occasional person smart enough to make a big enough stink in the blogosphere triggers the “Oh, we’re so sorry, this never should have happened” response, but, of course, then business goes on as usual, no changes to the code that caused the “error” and thousands more lose their homes.

    When will people wake up and insist their elected officials stop turning a blind eye to the shady behavior of BofA?