Springtime 2010 – When Confusion, Complexity, (and Corruption?) is in the air

As I understand it, there are 2 forms of harm that can occur as defined by the DTPA;  Personal harm or harm to property.  The federal government originally led the charge to protect consumers from harm inflicted by shady advertisers by expanding the mission of the Federal Trade commission to cover consumers (its original purpose being to protect sellers from each other).  Later, states wanted similar protections and came up with the Deceptive Trade Practices Act (DTPA) so that they could regulate the same deceptiveness at the state level.

On February 5th, I received 3 Call request letters that were identical.  I’m not sure why they send multiples but common sense and fear led me to believe there might be some miniscule difference and that if I didn’t carefully inspect each one, then I might miss something important.  When this happens over and over again, it becomes very stressful because I fear that they’re trying to sneak something past me.  Also, the amount of time it takes to process the information is time that could be spent on more productive tasks.

On February 17th I received this Proof of income request  which (in this case) was defined as 3 months of Profit/Loss Statements and copies of tenant leases.  These documents were faxed to them on February 19th.

On Feb. 24th (only 7 days later) I got another information request for a financial worksheet and February Profit/loss statement (The P&L I had already sent them 7 days earlier.  Did they lose it?)  I faxed the documents on March 3rd.  According to my records this document was refaxed on March 9th.  The refax suggests to me that ASC lost the documents.  I can’t be 100% sure why there was a re-fax because I don’t have a record of it.  With 7 years’ worth of account management experience, I’m used to keeping records and yet I still forgot to record something (that’s probably not the only time it happened.  Even for a professional, it takes some time to develop record keeping habits meticulous enough to be able to keep up with the complexity of a mortgage loan servicer). What probably happened with the re-fax was, I may have called them to check status (which you have to do regularly or risk the servicer throwing out your application for some reason that you never knew about) and discovered during the phone call that they never received the March 3rd fax.

On April 2nd, I received this Default & acceleration notice.  You’ll notice that it’s only about $2,400.00 that I owe at this point (after 6 months’ worth of delinquency).  Seems like the easy solution is to just pay the full amount to reinstate the loan since there has been no “acceleration” of the note (see the acceleration notice above for a definition of “acceleration”).  But, if you have money lying around then of course, that’s what you would do but if you had the money, then you wouldn’t have fallen behind on the payments to begin with.  I was also delinquent on my utility bills, phone bill, and 3 credit card bills.  The utility company allowed me to pay back the delinquent amount by tacking on a little extra to each new bill (AT&T was not so friendly).  As you can see, paying off the loan delinquency in a lump sum, was impossible.  I could, however, afford to resume normal payments of $538.00 per month because my income had increased.  Unfortunately for me, per ASC documentation, that was not an available option.  They state clearly in the acceleration notice that:

“To avoid the possibility of acceleration, you must pay this amount on or before April 27, 2010 in CERTIFIED funds, to America’s Servicing Company, PO Box 1820, Newark, NJ 07101-1820.

The next entry in my database is a hardship letter & more financials that I faxed them on April 26th. This was probably faxed in without ASC requesting it because I had just gotten a new roommate and wanted to notify them of yet another income increase.  Now I was making $1,850.00 per month with expenses of about $1,300.00.

The next entry is the Lerma roommate lease re-faxed to them on May 7th.  It was faxed originally on February 19th but they wanted it updated with a new “signed on” date.  This common practice was a major aggrivation because they would take months to process the application which would force the documents to become “out of date”.  The out-of-date documents would trigger the underwriter (decision-maker on approval or non-approval) to kick the application back down to a lower level who would call (sometimes) with instructions to update the documents.  This happened constantly throughout the entire two-year process.  On May 13th, I received the first Decision on request for mortgage assistance.  You’ll notice that they listed my income at $1,069.50 even though my financial statements (faxed Feb. 24th) prove $1,500.00 worth of income ($1,350.00 after taxes).  So during the bulk of the review period, I was making $1,350.00 and my expenses were about $1,800.00 per month.  Granted, a 36% deficit looks bad to an underwriter, however my situation was improving as cited in the April 26th financial statement.  Notice that the April 26th financial statement was faxed at least a week prior to their decision to deny my request for assistance.  The new financial statement notified ASC that on May 15, my income would increase and also documented a decrease in expenses that occurred when I used cash to pay off other debt.

While you might argue that I could not afford a modification on the first go-round (debatable), the next attempt was a sure deal (or so I thought).  December 17th to May 15th was the period of time where I had an actual deficit in my income/expense ratio….That’s only 5 months.  Some states have a rule that prohibits acceleration of notes within a 6 month timeframe.  Not Texas.

Notice of intent to foreclose – Dated May 18th

Foreclosure sale date notice – Dated May 24th

December 20th, 2009 – Best Christmas Present Ever

It’s only 5 days before Christmas 2009.  At this point in the process, I was still naive enough to believe that America’s Servicing Company (ASC) was being sincere in their efforts to help avoid foreclosures.  Since then I’ve seen how the bank’s attorneys will use every trick in the book to force you out when their clients’ business interests are served by that course of action.  My house, in December 2009 had at least $50,000 worth of equity so the bank had no incentive to give me a modification.  It makes more business sense to foreclose and then sell the house since there is equity… at least in the absence of regulation.

Most people would be heading out of town around the 20th for the Christmas holiday.  I hadn’t really celebrated Christmas in several years since I lost touch with my family in East Texas, but most people do.  What a convenient time for the bank to be conducting foreclosure business.  You know, when the bank requests information, they’ll demand that they receive it within 10 days of the date of their letter, but you don’t really know how to proceed, especially if you’re new to all this foreclosure stuff.  It’s really hard to find help from lawyers, HUD approved councilors, and the like because they’re booked up or are already on vacation by the 20th.  I got a default notice that gave me until January 19th to bring my loan current or else face “acceleration” which means they can terminate your ownership of the home.  It was less than a week prior that I got the notice to send in the questionnaire for assistance and it would not be for another 4 days before they would even be able to confirm that they received my response.

Three days after Christmas, I received an acceleration notice.  It’s a good thing I wasn’t out of town trying to spend time with family when it came (a 10 day deadline would come pretty quick when you get the notice 5 days after the date on the letter).  On the 28th, I called ASC and they verified that they had received my statement of wages and expenses but, they now say they need proof of income.  So…I wrote a letter and faxed it to them with proof of income as they had requested.  Somewhere, I found this discontinue phone contact form.  It’s necessary to stop creditors from harassing you.  It may seem like a small thing but it’s a Godsend.  Creditors will drive you nuts calling you every week or two asking you the same questions over and over again.

On January 11th, I got this request for information (RFI).  You’ll notice that if they don’t receive your response within 10 days, they’ll throw out your request for assistance.  That’s not much time to do your research, collect the information, create documents and then mail it in.  It’s a good thing I had a home office, database, a scanner, fax machine, and the professional experience of an account manager.  Without those tools and resources, I think compliance with their demands would have been impossible.  Can you imagine the average homeowner with nothing more than a desktop computer and maybe a printer trying to respond to this type of request over and over again for 2 years?  I can’t, which is why I think this kind of highway robbery has never gone to trial.