Amelia couple faces a refinancing gone bad

Terry and Donna Hunt have never missed a mortgage payment. But their original lender has tried to foreclose on their house in Amelia County three times.

The Hunts weren’t involved in a loan modification, nor were they trying to take equity out of their house.

Rather, things went awry when they refinanced their $211,000 mortgage in October 2009 to lower their interest rate from 7.8 percent to 5 percent.

Now, no one knows who owns the loan, said Jason Krumbein, the couple’s attorney.

The new loan servicer, a government-approved lender that took over the refinanced loan from the originator, says it owns the loan, Krumbein said.

But CitiMortgage, the original lender, claims it never received the payoff from Lend America, once one of the largest originators of mortgages backed by the Federal Housing Administration but now banned by the FHA from doing business.

Still, as strange as this case is, the Hunts are not alone. Borrowers from across the country, including a person from Powhatan County, claim Lend America failed to pay off their existing mortgages after they received new loans…

“We have never seen a situation exactly like this, but we see errors in the servicing of loans, misapplied payments and foreclosures not based on proper documentation,” said Connie Chamberlin, president and CEO of Housing Opportunities Made Equal of Virginia Inc., a housing advocacy group.

Homeowners in Virginia have little recourse to ensure that they don’t get caught in a similar situation, Chamberlin said.

“A substitute trustee is appointed to take care of a foreclosure, but in many cases, the trustee doesn’t exercise the level of due diligence there ought to be when dealing with something as important as taking someone’s house.”

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4closureFraud.org