Nightmarish Stories of Mortgage Modification Woes
The idea that bank paperwork can weigh you down is nothing new. But the foreclosure cases we’ve come across lately sound downright Kafka-esque.
A homeowner trying to modify her mortgage is told to fax documents to a certain department. Soon after, the bank sends a letter saying she’s not eligible. She calls. The banks says it never received the documents. She’s given another fax number. She re-sends and calls a few days later. The bank now can’t find any modification request at all.
We heard story after story like this one, to the point of monotony. So what explains them? Were the banks simply overwhelmed and thus inadvertently causing their customers grief? Did they allow themselves to become overwhelmed on purpose, refusing to staff up and thus frustrating homeowners who wanted to modify their loans? Or was it the homeowners themselves, fudging the truth and/or flubbing the technicalities?
That’s where you come in. We’d like to know what our audience thinks, especially those of you who have seen all four of our foreclosure stories:
If you work at a bank (or used to) and have first-hand knowledge, please weigh in with an e-mail. So far we’ve been hearing exclusively from the aggrieved and the appalled. We won’t publish your name if you don’t want us to.
Back to Kafka-esque: the reference is to Czech-German author Franz Kafka and his nightmare world, epitomized by his novel “The Trial,” in which a man is imprisoned and prosecuted by an authority he can’t reach for crimes that are never made clear. It’s a vision of mindless bureaucracy and the resulting hopelessness of appeal to an invisible jailer.
Taking a bit of journalistic license to try and add some fun into the mix, we’re announcing the “Making Sen$e Kafka Awards” for the most ridiculous dealing-with-the-bank stories we’ve come across.
While unfortunately we can’t offer award money (nothing in the NewsHour budget for that type of thing), we are offering a spotlight to the inefficiencies, rigmarole and maddening instructions homeowners have told us about:
They say they haven’t received things, but I send them certified [through the mail]. I get receipts that they received the documents. One time I stapled my check to the documents and sent it certified, return receipt. They said they didn’t get the documents. I got the return receipt and they deposited my check. I must have submitted paperwork ten or eleven times. They tell you one thing on the phone but the next person tells you something else. Then you talk to someone else who disconnects you. It takes an entire week on the phone. If I ran my classroom like that, I would lose my educators license. I wouldn’t be allowed to pump gas.
The bank said, “Oh, you’re on a modified payment amount so do you want to pay 650 dollars?” I said, “Excuse me? Is there something wrong with you people?!” I said, “Why are you asking me that?” She said, “I see you’re on the modification program.” I said, “Could you look deeper into your modification system there?” She put me on hold and got back on and said, “Okay, do you want to pay 1400 dollars?” [after realizing my modification application had been rejected.]
I feel like I’ve wasted almost two years of phone calls. It’s gotten me absolutely nowhere.
I made 36 phone calls between March and July. Finally in July I was told that we qualified for a modification. In part, we didn’t read all the fine print properly. I assumed it was a done deal. We got paperwork to sign but never received another bill or statement from Citimortgage. [The bank] said, “Make the payment the first of every month. It’s a trial period and at the end of the trial period we’ll let you know.” It was $550 less [than my original mortgage payment]. They said, “This is the payment now.” We never heard a word from them. Then in December we received a letter saying we didn’t qualify for the modification because our mortgage had to be 31 percent of our income. I said, “What didn’t you know about that formula in July?” They said they wanted us to pay back the seven months [we'd been paying the reduced mortgage]. $3500, right now. All of a sudden we got demand notices, arrearages notices, saying we were behind. They never recorded that we had paid our mortgage. Every time we called someone, we got someone overseas. We called [Massachusetts Congressman John Tierney]. He put us in touch with an officer. We got letters every day, emails. Our credit rating went from high 700s to low 500s. We had never missed or been late. It took eight months, my husband 60 hours on the phone. It’s the most convoluted mess. It was unbelievable.
In December we started getting letters from [the bank] with intent to foreclose. Meanwhile, we are on the phone with them. I have documentation, a timeline of it. Nobody knew their right hand from their left hand. Everybody gave conflicting information. They said, “Don’t worry.” This went on through April. We were declined. We were supposed to have a negotiator assigned. They string you along until you are no longer qualified or something changes in your life. The latest is they were supposed to call us, then we were supposed to call them. They give us the wrong number. This person was supposed to be a negotiator. He said, “No, I’m just trying to accelerate your case. You’ll be contacted.” Nobody has contacted us. They are not acting in good faith. It is just a bunch of nonsense.