Profiles: Shoddy Bank Practices Continue Even After Mortgage Mods

Profiles: Shoddy Bank Practices Continue Even After Mortgage Mods

by Paul Kiel ProPublica

As we reported today [1], many homeowners have received a mortgage modification only to find themselves once again at risk of foreclosure because of errors by their mortgage company. An informal survey of legal-aid organizations suggests this is a frequent problem.

ProPublica investigated six homeowner cases. The cases involved four different mortgage servicers and a range of problems. All are among the largest servicers: Bank of America, JPMorgan Chase, Citibank and PHH Mortgage.

JPMorgan Chase

Chanel Rosario of Staten Island, N.Y., finally got her modification last year after years of trying. The offer came after a New York judge told Chase’s attorneys they “should be ashamed” of their conduct and threatened to hold them in contempt of court. But after months of making payments, Rosario called up Chase and discovered that something was wrong. The payments weren’t going toward her mortgage, and Chase was still reporting her as delinquent.

Another Chase homeowner had a similar problem: Her modification had somehow disappeared in the company’s computers. The Oregon homeowner, who preferred to remain anonymous, signed and began a modification last July. But she received a letter months later telling her that she’d been rejected for a modification. One month after that, she received a foreclosure notice.

After months of trying to figure out what was happening, she was offered a new modification, the terms of which were identical to the one she’d signed — except for the addition of over $8,000 to the balance of her loan. Understandably, she turned it down. But after having made every payment on her modification for nearly a year, the foreclosure notices continue to arrive.

Contacted by ProPublica, a spokesperson for Chase said that the bank would honor the modification and had “changed her status to current.”

As for Rosario’s situation, the spokesperson said the bank would reach out to her and her husband “to discuss their situation.”


Michael Skadeland of Chicago, Ill., was among the first homeowners to receive a modification through the government’s Home Affordable Modification Program (HAMP) way back in November 2009. After making payments for more than a year, he was puzzled when his account wasn’t credited $1,000. One of the main benefits of HAMP for borrowers is up to $5,000 in incentive payments toward the mortgage, applied yearly.

After months of phone calls trying to figure out what was going on, he was recently told by a CitiMortgage employee that he wasn’t in fact in a HAMP mod, despite his signed contract. He’d been put into a different modification plan and was never told about it.

Mark Rodgers, a spokesman for Citi, said the bank was looking into the case and hoped “to resolve it promptly.”

Skadeland said that he’d spoken to a Citi employee Wednesday who said that the bank had made a mistake and would offer a settlement of $5,000 for the error.

Bank of America

In Nevada, Adil Baeza and Najwa Elbahi of Reno inexplicably received a foreclosure notice three months after starting a modification last year with Bank of America.

Bank of America spokeswoman Jumana Bauwens said that the bank apologized for the error, which happened because “after completing the permanent modification, we found that we did not prepare the documents correctly to show the forbearance they were entitled.”

Bank of America rescinded the foreclosure and took “corrective actions to fix their credit reports, delinquency and fees associated with this error” in January of this year, she said.

Geoffrey Giles, the attorney representing the couple, said the bank only corrected the error after he interceded and that the couple was owed other compensation. “Previously [Bank of America] was making generous deals with homeowners they did this to, but the problem is apparently so widespread that they have thought better of the process, so now they are just saying ‘sorry.'” Giles said he was handling a number of similar cases.

Carolyn Chaney of Seattle, Wash., had a different problem with Bank of America. Five months after beginning her modification in August of 2010, she received a notice from Bank of America informing her that she owed $1,400 in missed payments and late fees.

Contacted earlier this year by ProPublica, Bauwens of Bank of America said the notice had been sent in error and that all the late fees would be waived.

Bank of America, like the other servicers contacted for this piece, did not respond to questions about whether these problems were widespread or what steps the company was taking to prevent these sorts of errors.

PHH Mortgage

In West Haven, Conn., Anthony Bondi had made three payments of about $850 — the payments specified in his modification agreement — when he received a statement from PHH Mortgage asking for over $1,800. “What they did to me was wrong,” he said.

Dico Akseraylian, a spokesman for PHH, said the company was “ready to honor the loan modification agreement as accepted by Mr. Bondi,” and that it had attempted to reach him “to address this matter,” but wouldn’t say whether the company had made a mistake or not.

Jeff Gentes, an attorney with the Connecticut Fair Housing Center who worked with Bondi, said the jump in the payments was likely due to an accounting error by PHH and said such demands for extra money often pop up in the early months of a modification.

Follow on Twitter: @paulkiel [2]


11 Responses to “Profiles: Shoddy Bank Practices Continue Even After Mortgage Mods”
  1. Carrie M says:

    We called Citi 7/2009 to discuss other options for escrow. We prepay a year, we pay taxes and insurance when do, etc. We were told it was a state law that we had to escrow. (untrue, but did not know at the time) My husband was going to be getting a pay cut so we were trying to be proactive, (we were and always have been at this point current on our mortgage) Citi told us that what we wanted was a loan modification and they would put us in that and that was the help we were looking for (sure, right) Of course, I had no idea what pandora?s box we had just opened. (no other options were ever presented or discussed with us.

    May of 2010 we were denied HAMP. BUT, we were told that was good news, we were actually back to Citi for a traditional modification. Again, no other options were mentioned or discussed with us.

    The next month we get a letter to call and make arrangements before foreclosure would start. Of course I called hysterical and was told as long as I was making monthly payments and in the modification process, Citi would not foreclose (haha).

    August 2010, Citi mysteriously loses my automatic monthly payment information, does not take my August payment and files foreclosure.

    We get served papers and file an answer. 2 weeks later we get offered a modification, my attorney calls their litigation department, and their local attorney (calls were not returned). Modification offer gets closed. (WHAT!)

    Another court date is scheduled for foreclosure. I finally got the contact in the ERU dept. Executive Response Unit at Citi and they rush and we get approved for another modification (But worse terms, only lowers interest .6% instead of 2% like previous offer (all income and bills were the same) we sign offer to get foreclosure case dismissed.

    After 4 months of on time payments with the modification, we get a letter from Freddie Mac that they do not approve of the modification because of our credit (What!) and a letter from Citi to call to workout arrangements instead of foreclose (short sale, etc)

    So confused and no idea what is going to happen next. Just when you think everything is going to work out and you can breathe, it all comes crashing down again. Well, yes, after 2 years of lies, and the run around from Citi, our credit is ruined. (The only payment we did not make are when we called 7/2009 and they told us to make our 1st trial payment in 2 months, I even asked about the missing 2 months and was told they weren?t needed. Then August 2010 when they didn?t take our automatic payment. This is what they filed foreclosure on. (All while I was talking to them 2 ? 3x every week!) After reviewing a ton of blogs and sites today, I will be writing my story and sending it to anyone that will listen, OCC, State representatives, Washington DC representatives, news stations, all blog attorneys in EVERY state, etc, etc!!

    Carrie M – Wisconsin

  2. When I think of Brian Moynihan or Barabra Desoer, I think of the song by John Lennon called Piggies:
    So if it walks like a piggy, talks like a piggy, by golly it’s a PIGGY!

    BofA and it’s CEO Brian Moynihan reminds me of that song by John Lennon and George Harrison titled “Piggies” I invite you to listen to this song on youtube and see if it appropriately fits.
    Have you seen the little piggies
    Crawling in the dirt
    And for all the little piggies
    Life is getting worse
    Always having dirt to play around in.
    Have you seen the bigger piggies
    In their starched white shirts
    You will find the bigger piggies
    Stirring up the dirt
    Always have clean shirts to play around in.
    In their ties with all their backing
    They don’t care what goes on around
    In their eyes there’s something lacking
    What they need’s a damn good whacking.
    Everywhere there’s lots of piggies
    Living piggy lives
    You can see them out for dinner
    With their piggy wives
    Clutching forks and knives to eat their bacon.

    When I filed my lawsuit against Bank of America, I thought of the many others out there in the same situation. It was then that we decided to educate the public on what these piggy banks are doing, as well as unite us all together as one voice. Please help me turn this David vs. Goliath modification process, into a Goliath vs. Goliath.
    Please stand with me and Brookstone Law Firm, and send an email to Bank of Abusing America that states that we will no longer tolerate their potentially illegal, fraudulent, irregular and abusive business methods.
    So please send your email directly to Bank of America and include the following:
    1. Your name
    2. Your complaint concerning your experience with Bank of America.
    3. Please end your email “I support John Wright vs. BofA Lawsuit!”
    4. Please send a copy of your email to
    5. Please send your email to BofA CEO Brian Moynihan:
    I have created for all of those who have been abused by Bank of Destroying Americas potentially irregular, fraudulent and simply abusive home loan modification process.
    Divided we might have fell America. UNITED WE MUST STAND!
    My name is John Wright AND I AM FIGHTING BACK!
    John Wright

  3. Tim Bryant says:

    50 state AGs actually oppose a settlement. Is the world coming to an end?….

  4. marilyn lane says:

    I see an issue not really being addressed as a force behind alot of homeowners failed agreements or workout plans with their banks In my case I found bank foreclosure attorneys are pushing for failures because they behind the scenes are working on deals to supply strawbuyers for when the agreements fall thru and the properties go into foreclosoure. These strawbuyers are fronts for the attorneys wanting to hide their cash.
    (from the IRS or whatever)

    I don’t think this strawbuyer connnection is so rare.

  5. Question, Who in their right mind is going to be willing to buy a house to be dealing with these Banksters Gangsters Servicers? Who in their right mind would want to be dealing with these people for 30 years of your life with your mortgage? What about Junk fees Force Insurance, Escrow fraud, outrageous late fees, etc, etc, Think About it…It would come to a point when nobody will be willing to buy a house and then what???

  6. Pamela says:

    They are still up to thier old tricks.This is reprehensible behavior.Entitled and enabled and not going to change anytime soon evidently.With all the water under the bridge on this mess you would think they would have put thier best foot forward…….not so much.What a joke!!!

  7. pamelag says:

    modifications are lies to gather your personal info. they make their $ fraudclosing. if they want your personal info, remind them they have it right next to your note. when i hear ‘modification’ GMO comes to mind. toxic

  8. FAITH says:

    I agree Cramdown!!!!

  9. Readdocs says:

    Every time you do business with the service company or the lender record every thing, and keep all of the paper
    work filed for future reference.
    Having an extensive paper trail is only to benefit you in case there are discrepancies, or threats against you and your property.
    It’s time we became responsible in reading the fine print of any contract we are contemplating signing. Knowing what is there can help in any disagreements. It also will benefit you if you’re having to hire a lawyer, that let work will be to your advantage.
    Simply the facts, they are your best defense.

  10. Cramdown Now says:

    mods don’t work. Cramdown does. Extend and pretend doesn’t work, reform Bankruptcy now.

  11. TC says:

    Thank you for bringing this to light.
    And three cheers for ProPublica! Go get ’em!!!

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