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!)