Michael Snyder During the last housing crash, the big banks begged the federal government for help and they received it, but when average Americans ask the big banks for help most of the time the banks show no mercy whatsoever. If you fall behind on your mortgage payments, the big banks have shown that they are willing to be absolutely ruthless. They will change locks in the middle of the night, they will toss disabled veterans and families with children out into the street in the middle of winter, and sometimes once the foreclosure process has begun they will not even allow someone to come forward and offer to pay off the loan if they think that they can make more money by selling the home.
The big banks will often string homeowners along for months or even years with loan modification promises, only to drop the hammer on them at the most inopportune time. Over the past several years there has been case after case where mortgage documents have “disappeared”, where big banks have “manufactured” missing documents out of thin air and there have even been cases where big banks have tried to foreclose on homes that do not even have a mortgage. Once in a while, the big banks get a small slap on the wrist, but nobody ever really gets into much trouble for any of this. In fact, the big banks just continue to gain even more market share and even more power. Hopefully when some of these foreclosure horror stories start to become publicized more widely we will start to see some real changes in the marketplace.
The following are 10 foreclosure horror stories that will blow your mind…
#1 If you get behind on your mortgage, your family might be tossed into the street at gunpoint in the middle of the night… This week, Christine Frazer and her family were thrown out of the Atlanta home they’d lived in for 18 years, at gunpoint in the dead of night. They were not set upon by robbers, but by the Dekalb County Sheriff’s department, which evicted the family at the request of Investors One Corporation. As Steven Rosenfeld reported for AlterNet, it was the fourth company to buy the family’s mortgage in eight months.
#2 Time after time we have seen authorities show absolutely no mercy when conducting these evictions… It was bad enough when 62-year-old disabled veteran Ramsey Harris was evicted from a foreclosed house on Jamaica Lane where the former owner had been letting him live. Then it started to rain as all his worldly possessions sat in a heap by the side of the road and Harris noticed some of his valuables were missing. “It was just ugly,” Harris said Friday. “I was just broken-hearted. I couldn’t believe what was happening to me. I ended up standing, watching all my life’s work go down the tubes.”
#3 Sometimes financial institutions will promise you a loan modification for many months and then turn around and foreclose on you anyway… When the economy crashed and his business slowed down, Wells Fargo offered to modify Steve Bailey’s loan to lower his payments. After making a series of trial payments, Wells Fargo notified Steve that his modification was on the way. A few days later he received a letter stating that his modification had been denied. The Wells Fargo representative he spoke with reassured him that they had made a mistake and that he should keep making the payments, which he did for seven months. Steve then started to receive foreclosure notices. Again, the bank representative assured him that the notices had been sent in error. Then Steve checked his credit. Wells Fargo had reported him delinquent on his mortgage for the last six months. The reduced payments that Steve had agreed to pay for the previous months had been put into a separate trust by Wells Fargo, and they had not gone towards his mortgage. Steve took the case to court but lost despite mountains of evidence in his favor. He lost his home and his business.
#4 Other homeowners have found themselves trapped in loan modification hell for years… I am self-employed, have been all my life and have owned a home for 30 years. When I started my Loan Modification process in August of 09 I WAS NOT behind on any payments. I sent full documentation, over 150 pages, with the things they needed to verify my income. I am now 2 payments behind and I am getting nowhere. They keep flipping me between Loss Mitigation and Imminent Default, back and fourth month end month out. I made a habit of calling every week, then every two weeks just to be sure all was moving forward. From the middle of November I was told my file was with the underwriter and it would only be 30-60 days. I began automatically updating my income verification, verification that I still resided at the property and an updated 4506-T every month. In the middle of April a rep finally told me I was not in the loan modification process. In fact, that I had been denied on March 2. Keep in mind, I’m talking to these people every 2 weeks. She did a financial interview and sent me a new packet so that I could start all over, resubmitting all the documentation yet again. She told me she was my Account Manager. I completed the packet, called with a question (2 weeks later – over a week to receive the packet and another few days to complete it and gather all my documents again) and learned that my “Account Manager” was on maternity leave and I now didn’t have an account manager. Also, I was told that I had received the incorrect packet…it was the old version rather than the updated version. She asked me to fax four or five pieces of information in the hopes it would, quote, “jump start my file back into the process” and said she we send me another packet. That was mid April. Here we sit, 2-1/2 months later, I have still not received anything in writing about my rejection. And, though I’ve now had people tell me on three separate occasions that I would receive a new packet, it has yet to show up on my door step. I asked several times why my application was denied and the answer I finally got last week was that it was because I was DELIQUENT in my payments. Call me crazy but I thought that was the whole point??!! I almost hired a third party but am so hesitant to take that step. Every time I get on the phone with them it takes an hour out of my day and I am usually so upset I find it difficult to work, so I just don’t call. I’m going to sit back and regroup and decide what I need to do next.
#5 Sometimes a big bank will kick someone out of their home and then never actually take possession of the house. As a result, many former homeowners now find themselves stuck with thousands of dollars of unpaid bills. For example, a recent CNN article told the story of Rose Nathan, a 37-year-old office manager… Nathan lost her South Bend, Ind., home in January 2009, after working out a deal with CitiMortgage to voluntarily walk away in a “deed in lieu of foreclosure.” “On Christmas Eve, the bank called and told me a sheriff’s sale was coming and I had to move out right away,” she said. “So that’s what I did — seven days after New Year’s.” She sold her belongings and moved to Hawaii. Nearly two years later, she received a property tax bill from the City of South Bend for $5,000. The bank had never taken possession of the house. These unpaid taxes that she didn’t even know about have absolutely destroyed Nathan’s finances… Meanwhile, the unpaid debt has crushed Nathan’s credit score. The deed-in-lieu alone lowered her score by 80 to 120 points, but the unpaid debt meant her credit kept taking a hit. Eventually her credit card companies cut her off, even though she said she was making her payments. Her auto loan now carries a 25% rate. Her car insurance premiums have skyrocketed. She can only afford a one-bedroom apartment where she lives with her three kids. And forget about buying another home. “Nobody will give me a mortgage,” she said.
#6 Sometimes a big bank will decide to foreclose on you even when you have been making all of your payments. Just check out what real estate agent Mark Conca went through with one major bank… He decided to approach his lender, Bank of America, to see if he’d qualify for a modification. After he applied, many months passed and Conca heard nothing from the bank. Knowing lenders had huge backups in modification requests, he remained patient. Conca, 41, continued to make the full payment on the mortgage for his Caldwell home, on time, every month. But that’s not what Bank of America said when it sent Conca a letter about its intent to foreclose. “I would have been better going to a loan shark and borrowing all that money,” Conca said. “At least with the street mafia, you know where you stand.”
#7 Sadly, the customer service at many of these large financial institutions is almost non-existent. In fact, sometimes representatives from these companies will literally tell you that they won’t lift a finger to help you… After a car accident Kathryn Nava wound up on disability and had trouble making her mortgage payments. She had a friend who was willing to help her make her back payments, but that friend wanted to see a payment history before giving her the money. Nava called her mortgage lender to request that history—and was told it would cost her $50 per hour, and take 90 days to receive it. So she tried again, calling the president of the company. She got a voicemail response that shocked her so much she recorded it and saved it. “Let me enlighten you, Kathy. First of all, there’s nothing in your contract with us says we owe you any history, now, next year, five years from now or the next time…I’ve begun foreclosure today. I bet you’re sorry now that you made that phone call. I don’t need to put up with your crap, OK?…Bottom line, I’m doing nothing for you now.” Indeed, she did end up losing her home.
#8 Sometimes the big banks will try to foreclose even when you paid cash for your house and you don’t even have a mortgage… Charlie and Maria Cardoso are among the millions of Americans who have experienced the misery and embarrassment that come with home foreclosure. Just one problem: The Massachusetts couple paid for their future retirement home in Spring Hill with cash in 2005, five years before agents for Bank of America seized the house, removed belongings and changed the locks on the doors, according to a lawsuit the couple have filed in federal court.
#9 Dealing with these big banks is so incredibly frustrating that some homeowners have completely snapped. For example, one very frustrated homeowner in Ohio decided to crash his SUV into his own home… 30-year-old Steve Doak told deputies he was recently served with foreclosure papers and wanted to destroy the house rather than turn it over to the bank. The sheriff’s office says Doak drove the vehicle into fencing and then into the rear of the house
#10 Another very frustrated homeowner literally bulldozed his own home… “The average homeowner that can’t afford an attorney or can fight as long as we have, they don’t stand a chance,” he said. Hoskins said he’d gotten a $170,000 offer from someone to pay off the house, but the bank refused, saying they could get more from selling it in foreclosure. Hoskins told News 5′s Courtis Fuller that he issued the bank an ultimatum. “I’ll tear it down before I let you take it,” Hoskins told them. And that’s exactly what Hoskins did.
Meanwhile, the big banks that are doing all of this continue to receive billions of dollars in assistance from the federal government. The following is from a recent Bloomberg article… When JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon testifies in the U.S. House today, he will present himself as a champion of free-market capitalism in opposition to an overweening government. His position would be more convincing if his bank weren’t such a beneficiary of corporate welfare.
To be precise, JPMorgan receives a government subsidy worth about $14 billion a year, according to research published by the International Monetary Fund and our own analysis of bank balance sheets. The money helps the bank pay big salaries and bonuses. More important, it distorts markets, fueling crises such as the recent subprime-lending disaster and the sovereign-debt debacle that is now threatening to destroy the euro and sink the global economy.