Look, it is this simple.
All those trial payments you make go into suspense accounts.
During the time you are making the payments, late fees are adding up, you are being reported late to the credit agencies and the amounts reduced in your payments are adding up as well.
For example, you had an original payment of $2,000 and your new loan mod payment was $1,400.
First, lets say you have been making your trial payments of $1,400 a month for ten months.
During that time, you are accruing a monthly $100 late fee since you aren’t making your normal payments.
On the 11th month you are told you do not qualify for whatever reason and now you are told you need to come up with $6,000 to become current, which is exactly the reduced amount times ten, $600 times 10 = $6,000.
On top of that, your mortgage servicer has reported you delinquent for those 10 months even if you were current before entering the “modification”.
Now they go to foreclose and you know what the real kicker is?
You get an amounts due and owing from a robo-signer and it says you owe $24,500 for non-payment and fees for the past ten months, delinquent $21,000, attorneys fees $1,500, title search $300, service $300, bpo, $300, etc…
But you say how is that?
Well lets do the math.
You had a payment of $2,000 due every month and you did not pay it.
Then you accrued $100 a month in late fees.
Add all the “foreclosure fees” on top of that and there you go.
But what about the $14,000 I gave in trial payments over the last 10 months…
Yea, exactly, what about those payments…
Gone into the servicer abyss…
Washington Post Staff Writer
Saturday, October 30, 2010; 12:53 AM
After Valarie Stovall fell behind on the mortgage on her home near Hagerstown, her lender agreed in April to slash her monthly payment by $300, and she immediately started paying the reduced amount
That’s why, Stovall said, she thought nothing of the yellow flier she ripped off her screen door as she returned from the grocery store one afternoon last July.
“Then I read it and went ‘Oh my God,'” she said. “It was a notice of eviction.”
Across the country, struggling homeowners are increasingly tripped up by mortgage lenders that press ahead with foreclosures regardless of any effort they make to provide borrowers with relief on unaffordable mortgages.
Amid the worst housing crisis since the Great Depression, mortgage companies have established a dual-track approach toward troubled homeowners, negotiating with them over loan modifications while trying to seize their homes.
Top government officials have been urging lenders to redouble their efforts at modifying burdensome loans and have barred lenders from foreclosing on homeowners who are seeking to rework their mortgages under a federal program. Mortgage companies, however, have continued to pursue this two-track strategy, with a widening toll especially on those homeowners who have been trying to resolve their mortgage difficulties before they snowball, according to federal and state officials and consumer advocates.
During the last month, several major lenders have temporarily halted thousands of foreclosure cases amid reports that fraudulent court documents and improper procedures have been used to evict people from their homes. But disarray within the mortgage industry goes much further. And the foreclosure pause has done little to address the common industry practice of taking homes from people who’d been led to believe they could save them.
“It’s still happening everywhere,” said Arizona Attorney General Terry Goddard, who has tried to bar the dual-track process in his state, one of the hardest hit by the foreclosure crisis. “It’s one of the largest complaints I get. . . . The lenders need to make a choice. What do they want: a foreclosure or a loan modification?”
In Centreville, Woodrow Roberts III said he enrolled last October in a loan modification program with Bank of America. At the time, he was still current on his $3,000-a-month payments but wanted some relief until he could find a second job. The bank agreed to trim the monthly payment by $600 for a three-month trial period and consider Roberts for a permanent modification, he recalled.
After three months, he said, he heard nothing from the bank. “I called in every week to see the status of my loan,” Roberts said. “After a year of phone calls and no real information, I received a letter in the mail.” It said he had been rejected for a modification and that he owed more than $8,800 – the total he’d thought his payments had been reduced over the course of the year plus fees. If he didn’t pay, the letter warned, his home would be sold at a foreclosure auction Nov. 12.
“If I knew this type of program could risk everything, I would have never entered into this program,” Roberts said. He explained he can’t afford to pay the sum demanded all at once and hasn’t been allowed to spread it out over time.
In response to a reporter’s question about the case, Bank of America spokeswoman Jumana Bauwens said Roberts was turned down for a permanent loan modification under the federal program because his income was too high to qualify. But she said the bank is now reviewing whether he is eligible for alternative relief.
Catch the rest here…