To paraphrase from words often attributed to Josef Stalin — a million bank foreclosures is a statistic, but a single family losing its home is a tragedy.
So Richard Zombeck has set out help people tell those stories — one at a time — at a Web site named ShameTheBanks.org.
There’s Diane Casella from Florida, who says she can pay a considerable amount towards her mortgage, but needs a break because of sinking income and property value.
“I have never asked for mortgage help in my life, but now that I just need a mortgage that is 31 percent of my gross income, the bank acts like I do not even exist,” she writes on the site. “It was so easy to reach them five years ago, but now they have turned a deaf ear to my family’s plight.”
And there’s Mike Dillon from Manchester, New Hampshire
“No one can live in a situation like this, for this long without breaking down. Because of being in legal limbo for all this time, my fiancée and I have postponed our wedding and been unable to start the family we both want,” he says. “This has ruined me financially… I can’t even refinance away from them. I go through large bottle of antacid like you wouldn’t believe. I am stuck in limbo, I can’t sell the house without taking a huge loss, I couldn’t buy a new house because they destroyed my credit.”
Zombeck’s raw Web site, which encourages consumers to name names and be as specific as possible about their mortgage woes, has quickly garnered attention around the ranks of frustrated homeowners. He’s also gotten at least some attention from Congress, and Zombeck is now part of the lobbying effort by consumer groups this week who are advocating for the controversial financial reform legislation currently being considered by the U.S. Senate.
On Tuesday, the Massachusetts resident is meeting with staff from Sen. John Kerry’s office to share his own story and stories from ShameTheBanks.com as part of a visit by The Massachusetts Public Interest Research Group (PIRG). He’s also trying to personally deliver his package of first-person tales to his state’s other senator, newly-elected Republican Scott Brown. But PIRG attorney Elizabeth Weyant, who is arranging the meetings, says Brown’s office has yet to reply to requests.
“Richard has done a really good job of making himself an expert on the issue,” she said. “It’s really personal for him. He gives a face to the need for financial reform.”
Weyant said one compelling element of Zombeck’s site, in addition to the number of struggling homeowners who tell their tales, is the similarity of their sagas.
“Even if we’re talking about different banks, it’s the same story, again and again,” she said. Collectively, the tales show how badly the mortgage modification process is working, she said. “To a bank, a mortgage looks like a pile of money. To a person, that’s their home.”
Among the sagas with similar storylines is the tale of Angie Burke, of Reading, Penn., who first contacted her bank about a possible mortgage modification in December 2008.
“I was fully unprepared for the duration and insanity this process can bring,” she writes in her story. After a year of filling out paperwork and waiting for bank response, she received this dismal proposal concerning one of the two loans on her home:
“The best they could do for us was lower the interest rate from 6.75% fixed to 6% fixed, saving us a whole whopping $90 a month! How is that going to help?! Our income is half of what it used to be.”
While the site invites complaints from any consumer who is frustrated with any bank lending practices, nearly every story Zombeck has collected so far deals with the paperwork madness that has engulfed participants in the Making Home Affordable program. When announced last year, the program was designed to help up to 4 million struggling borrowers, but currently only 230,000 mortgages have been permanently modified.
The complains have led to a series of revisions in the program, including sweeping changes announced by the Obama administration last month — still, another 900,000 foreclosure notices were received in the first three months of 2010, according to RealtyTrac.
MSNBC.com’s John Schoen has been chronicling the woes of the Help for Homeowners program (HAMP) for months. In January, I wrote about a woman named Deb Franklin, whose three-month trial modification had turned into a 10 month waiting game that included a foreclosure notice.
But Zombeck’s Web site shows that Franklin’s Kafka-esque nightmare is hardly an exception.
“Those stories are not unique,” he says. “It is depressing and goes further…300,000 foreclosures a month further,” he added referring to the estimated number of homes that will receive a foreclosure notice this month.
I want to tell you all a little story. The story begins, as all American dreams do, with unfettered hope and belief, but has, over time, become a nightmare from the darkest recesses of our national psyche. This is not a fairy tale, and I beg you to see yourself in our heroine; for you could find yourself in her shoes very soon. And I promise you that that is not a place you want to be. But read on, and judge the veracity of my words for yourself.
I have been in the mortgage industry for almost a decade, and have seen my share of the ugly side of lending: the foreclosures, the forgotten families, and the greedy, heartless, faceless “holder of the note” gone wild. I have experienced all of this more times than I care to admit, and have been ashamed of my industry more times than I care to count, but the borrower I wish to tell you of was the reason I broke into this business in the first place. People like her, hard-working, honest Americans, are the ones a broker like myself looks for day and night, and strives to take care of in whatever capacity we are capable of.
Why you ask? What makes her so special? There are many answers to these questions, and the easy answer would be that she perfectly fit the mold we in the business look for. She had been employed for 22 years with the same corporation, and had managed to pay every liability on time for her entire adult life. No late payments, no missed payments, and nothing at all to indicate that she would ever change. Her credit score was 780, and she had owned a home for 10 years in Miami Beach (an expensive place to buy). This showed unequivocally that she understood liability, and knew how to get things done in the lending market. In short, she was a lender’s dream come true. A loan you approve and forget about because the payments are always in on time, and so, as a lender, you just count money for 30 years. What could be better from our point of view than that? Every lender in the world will tell you the answer to that question is nothing; absolutely nothing.
This lady decided to move to Chicago to be closer to her corporate office, so she sold her home in Miami and took her dreams and possessions north to Chicago. This took place in 2006 while the housing bubble was still growing larger, and no one outside of the industry had any expectation that it may burst at any time. She did her due diligence while looking for a home in the Chicago area, and eventually settled on a brand new property in an area ripe for gentrification. Basically, she bought in an older neighborhood that was undergoing massive urban renewal projects that were projected to raise property values in her area significantly; as long as there was no unforeseen disaster looming. That is the danger of things unforeseen. They eventually come to pass, and no one is prepared to combat them.
She started with an Interest-Only Loan as at that time it made more sense to use her principal money on personal investments rather than giving it to a lender to make decisions with. Even though interest rates were high at the time, IO rates slightly higher than fixed, she was able to get the property for almost $75K less than it initially appraised for, so she was already ahead of the game. She maintained her perfect history, 0x30 on her mortgage, and everything else for that matter, but that was before the wise and powerful bankers in America decided to play 3-Card Monty with America’s future.
As the signs of the encroaching financial apocalypse began to show themselves, she attempted, through her lender, to pursue refinancing, but was told her case called for the loan modification process. The press was making a fuss about how these modifications were the way for borrowers to get the help they needed to stay afloat in the carnage that followed the bubble bursting, and as an intelligent and savvy borrower with a perfect history she expected the process to go smoothly for her. In that assumption, she would have been right if not for the new credit card laws passed that allowed the companies to raise their interest rates and reduce the line of credit available on any given card. These changes have had an enormous, unintended consequence in the lending world since loans are in large part based on debt-to-income (DTI) ratios.
Imagine this borrower has a credit line of $10K on a card with only a $2K balance, but is then targeted by the credit card company for a reduced credit line of say $2500, so her 20% balance has now become 80% without her actually doing anything irresponsible. Yet, when lenders looked at her DTI they would see that she is nearly maxed out on her card, and in this industry that is a major red flag. She understood DTI, and how it could affect her ability to qualify for extra money (even though she did nothing untoward or rash in terms of spending), but why should that hamper her from getting a reduced rate? It is asinine to ask a person to re-qualify for something they already have, or to tell them they must qualify to save money, but this is what is happening in America today. She signed no agreement stating she could not refinance in the future with the help of her lender, so all she is left with are questions. Questions that for her and the millions like her, unfortunately, have no good answers. The American Dream, for this model American, is quickly becoming the American Nightmare.
There are so many questions our borrower wants to ask, but there are no phone lines to call or government offices to visit with any answer other than, “talk to the lender”. This is just endless runaround from the lender, and more and more frustration for her and her family. How is it possible to be locked into a loan, with bankruptcy laws so much tougher, and have absolutely no way to refinance? More transparency in the industry is great, but how can our borrowers appease the credit companies interest hikes while losing equity in their property due to the housing catastrophe and still meet the necessary financial obligations they agreed to prior to this meltdown? This is a recipe for mass bankruptcy and foreclosure; two things that hurt us all in the long run.
It was March of 2009 when our borrower started the conversation about refinancing with her current mortgage company, Indy Mac, from the 7.625% IO-Loan to a 4.5% fixed rate. They explained to her that she would need to print out a new financial packet, and send it, along with all other pertinent information, in to be reviewed before they could proceed; she did just that. After an entire month had passed, she called in to check the status of her application, and was told that the servicing company, Indy Mac, was changing hands, but she would still be taken care of by the new investor, One West.
Just like that, she and thousands of other customers were being sold to the highest bidder, and after some research she discovered that One West actually only paid up to far less than full value for these notes. It gets better. One West actually had the federal government guarantee them anything lost over a certain percentage. What does this mean you ask? All the numbers are there in black and white on the internet for anyone to see; but no one looks. You do not have to be a rocket scientist to see that it would be more profitable to foreclose quickly and collect the guaranteed funds than to refinance the borrower’s note at a current market rate.
The changing of the servicer of her note, as unsettling as it was, would have been fine if not for the dramatic change in guidelines and customer service she experienced. This often happens after a change of this magnitude in any business field, but these differences were downright ridiculous. She was informed that the financial packet she had sent was no longer valid, so she would have to assemble another one before any process could begin. So, once again she followed procedure in hopes of capturing that elusive lower interest rate.
She waited and waited for a call to inform her of the status of her newest application, and finally tried calling herself to enquire; but to no avail. Her calls were treated as a joke. They repetitiously asked for the same documents, and even claimed after three business days that they had never received her fax, and that it took all that time to verify whether or not they had received her documentation. They have done this over 50 times from March of 2009 to the present day! That is preposterous, shameful, and ought to be criminal! But it gets better; or worse for our heroine.
After calling repeatedly for three months she finally got them to look at her application. They told our borrower that the check stubs submitted were out of date according to Fannie Mae guidelines (must be less than 90 days old), but when she remedied that they told our borrower that her check stubs were fraudulent. Check stubs from one of the three largest airlines in the world which she has worked with for more than 20 years by the way. They focused on some minutiae that they knew to be nothing, but she was forced to get a complete employment record from her employer to along with a Letter of Explanation (LOX) from her Human Resources department. This process has stretched into years with no results. She was even told that the best way to get help is to be late on her mortgage payments! Imagine that. It has become so bad that when she follows up on any fax or correspondence they claim she has never talked to anyone about her issue, and when she asked about recording the conversation she was told it was against their policy. I am not making this up. Every word is true and to the point, and the point is that One West and Indy Mac, Fannie Mae and the federal government are fleecing, and failing we the people.
This is dangerous and uncontrolled corporate behavior, and it cannot be allowed to continue. One West has become the poster child for what is wrong with this industry; what is wrong with America in fact. In my humble opinion (and that of thousands of other Americans…not to mention all the honest lenders in the industry), they have pulled out all the stops when it comes to delaying and deceiving their customers in order to get a government handout and make a dishonest buck. This must not be allowed to stand.
Help her. She has asked again and again, and researched every option. She can’t refinance due to not having value. She can’t modify because it’s not profitable to the lender to do so, and she can’t walk away as her state won’t allow this. Why I ask myself? Is it considered walking away if you have no more options? Why is it easier to profit from bad deals than good ones? There is no hope for this borrower that she can see. The only hope I can think of is a Federal Reserve for primary borrowers in America. By that, I mean the feds open the vaults to primary homeowners at a specific rate, and work directly with the borrowers from a federal standpoint. Cut the banks out. Let them focus on commercial deals and second homes where the rates are higher and people know what they are getting into from day one. I do not think these customers’ closing paperwork said anything about having to stay in one rate for thirty years. Do you know anyone on record in today’s environment that can say they stayed in their home for thirty years at the same rate? I don’t think that is even possible. Please share…
Here are some sites that clearly have people in the same situation, read, educate, follow and post, let’s start the revolt against One West/ Indy Mac and Fannie Mae.
Go to Google, You-tube or any engine for that matter and type class action Indy Mac, Type Complaints Indy Mac/ One West; you will see firsthand what we are all up against.
Chase bank sold my house without my knowledge and the new owner is demanding that i get out of the residence. The Bank claims that they made an attempt to contact me one time via my cell phone which I failed to answer but they also didn’t leave a message either. Well the twist in this whole mess is the bank is fully aware that a year ago I was involved in a automobile accident while working , which is the only reason I fell behind on my payments is the difference in my pay is about $8000.00 dollars a month. I went from having a $12,000.00 a month income to a $3600.00 dollar income over night all because somebody hit me from behind while I was parked in traffic on the freeway at 1:30PM on a friday afternoon in SoCal. I suffered a Broken Neck in this accident and have been trying many treatments to get the feeling back in my hands which it appears I’m going to have to go in for another surgery to correct this problem. For the last year or so I had worked out an agreement with Chase Bank that I would pay them a $1000.00 dollars a month until I recovered from my injuries I suffered in an accident that was absolutely NOT my fault. A few months back a bank rep contacted me and said that they (Chase Bank) were going to Loan Mod my house for me under the new Obama Bill and they would be sending me all the paperwork for me to review and see if the payment would work for my current situation. That paperwork never arrived only thing that came to my residence was the new owner telling me He had just purchased my house and he needed me out as soon as possible . I explained to him my current situation and I also said that I can NOT physically move even if I wanted to. He (the New Owner) shrugged it off and said that wasnt really a concern of his and not his problem I’d have to work that out with the bank. So I have been calling the bank everyday trying to talk to somebody that can help me and getting NO where with them at all just transferred from department to department until my cell would either go dead or lose connection to where I’d have to call back. I’ve been told there is nothing they can do for me at this point the house is already sold and I’m just going to have to figure it out on my own or try to work something out with the new Owner which is just asking how soon i can be out and isn’t interested in dealing with me at all. He (the New Owner) calls my cell at least twice daily just to ask if I have made any arrangements and by what date I will be gone . At this time it has got to the point where as soon as I give the rep at Chase Bank my info they just hang up on me as if I’ve done something wrong. They’ve been so unbelievably rude to me it makes me sick to my stomach that they could have absolutely zero compassion for somebody that is disabled and they know by my past payments while I was working not only did I pay my mortgage on time I was paying down the loan an extra $1000.00 a month. So here I am sitting in what once was my Home ( the so-called American Dream ) wondering what I can do from this point due to my disability I have few options and I don’t have family close by to help me either and considering that I’m going to be having another surgery soon with no place to recover because all I can see now is I’m going to Homeless and Disabled. Does this really seem fair to you that I miss 1 phone call without a voicemail attach and now I’m going to be out on the streets with all my belongings that I cant even physically carry myself if I wanted too. Does anybody have any suggestions for my situation because i don’t know where to go from here this has turned into the American Nightmare Please Help if you have any info I may need to stop Chase Bank from putting me out on the streets
Dear Mr. Jiminez,
I read about your plight and it touched me. Where are you located? Do you have anyone to help you get your records from the County Recorders office? My story is a little differant but may I suggest,
1) Get your records from the recorders office first and see what you are up against. You cannot believe what they tell you.
Find out if your mortgage was securitized. Do you have “min #’s on your paper work? If you do then most likely it was securitized. Go to foreclosurehamlet.org, they have a wealth of information and resources and millions of folks who are in the same boat. The people trying to take your home may not have the right to do so. Do not fill out any paperwork from the bank untill you see whats in the Recorders file, so they can’t make up new ones with your signiture and docs that they want you to fill out. Make copies of everything. Take names and employee numbers of everyone you speak to and any correspondence you may recieve. Secretly record any phone calls, keep as proof. May God Bless You and I pray for a speedy recovery. Know that you are not alone. Call Occupy and ask for their help,
I’m sure they will, they are very determined to make sure your Constitutional Rights are protected. Please keep blogging and let me know where you are. Thats what this is all about, us helping each other. There is strenth in numbers!!!!!!!!
Ali