Off with his head! On with forgiveness

Hey!
Shut up.
Don't lie to me.
You think I'm blind but I have eyes to see

 – Bonnie Raitt, “Have a Heart”

I love Massachusetts Attorney General Martha Coakley because those lyrics sum up essentially what she said in a letter to the head of the Federal Housing Finance Agency (FHFA), Acting Director Edward J. DeMarco.

Bear in mind, the FHFA is a government agency that oversees Freddie Mac and Fannie Mae, the monster lending institutions that own more than half of the mortgages in the U.S.

Massachusetts recently passed a law that requires creditors like Freddie Mac to take commercially reasonable steps to avoid foreclosure on certain mortgage loans. Recently, the FHFA officially refused to practice principal forgiveness.

Principal forgiveness is an option Freddie Mac has to modify a loan in order to bring the monthly payment of someone in financial distress down to 31 percent of the person’s monthly income. It means Freddie Mac and Fannie Mae have to give up, or forgive, some of the principal amount of the loan.

“We expect that Fannie Mae and Freddie Mac will pursue common-sense loan modifications for borrowers when the economic benefits of a modified loan exceed the significant losses anticipated at foreclosure. These loan modifications are critical to assisting distressed homeowners, avoiding unnecessary foreclosures, and restoring a healthy economy in our Commonwealth,” Coakley said in her letter.

You go girl!

The FHFA is supposed to be on our side.

Yet this bozo currently in charge of the FHFA, Ed DeMarco, is repeatedly punishing homeowners who are legitimately in financial distress. He refuses to help, despite the fact that the White House, Congressmen, Senators, and the Treasury Secretary have all called for principal forgiveness and chastised DeMarco for his position.

Richard Zombeck, founder of the Home Preservation Network, posted a collection of quotes on the Huffington Post regarding Ding-Dong DeMarco.

Rep. Gary Peters of Michigan: “By refusing to implement a principal reduction program, FHFA is turning its back on hundreds of thousands of underwater homeowners and costing taxpayers billions of dollars. Principal reduction would not only help struggling families stay in their homes, it would also stabilize housing markets and bring much needed relief to communities that have been hit the hardest by the housing crisis.”

Rep. Barney Frank of Massachusetts: “He's acting as if he was head of two private companies called Fannie and Freddie and not taking into account the impact this has on the economy, and I think he should be more cooperative with efforts to reduce foreclosures.”

Here’s how Dunderhead DeMarco responded to suggestions that Freddie Mac and Fannie Mae offer Principal Reduction Alternatives (PRA): “FHFA has concluded that the anticipated benefits do not outweigh the costs and risks. FHFA concluded that PRA did not clearly improve foreclosure avoidance while reducing costs to taxpayers relative to the approaches in place today.”

Oh really, Scrooge-McDuck DeMarco?

How about this, from a study done by your own agency, the FHFA?

The study concluded that “Principal reduction leads to a 20 percent reduction in re-default probabilities as compared to a loan modification utilizing forbearance (see Excessive Forbearance in Jerky Jargon).

Principal reduction leads to a 24 percent reduction in re-default probabilities as compared to a modification that receives payment reduction, but neither forgiveness nor forbearance.”

And yet Delusions-of-Grandeur DeMarco still refused to allow principal reduction alternatives as a way to help homeowners avoid foreclosure and stay in their homes.

Enter Treasury Secretary Timothy Geithner, who sent DeMarco a stern, eight-page letter telling him to shape up. In it, he said, “Allowing principal reduction would ultimately save taxpayers as much as $1 billion.”

He went on to say, “As we have discussed many times, the use of targeted principal reduction by the GSEs would provide much needed help to a significant number of troubled homeowners, help repair the nation's housing market, and result in a net benefit to taxpayers.”

Geithner ended his letter to DeMarco with this: “Five years into the housing crisis, millions of homeowners are still struggling to stay in their homes, and the legacy of the crisis continues to weigh on the market. You have the power to help more struggling homeowners and help heal the remaining damage from the housing crisis. I hope you will move to address these problems with a sense of urgency and force commensurate with the scale of the remaining challenges.”

Okay, here’s my big question: If the President, House of Representatives, Senate, and the Treasury Secretary ALL think DeMarco is behaving badly, WHY CAN’T THEY STOP HIM?

My hero, Paul Krugman of the New York Times says that DeMarco should be fired. In an opinion piece he wrote at the end of July, he wrote:

“If the Secretary of the Treasury, acting on behalf of the president, believes that it is in the national interest to spend some taxpayer funds on debt relief, in a way that actually improves the FHFA’s budget position, the agency’s director (DeMarco) has no business deciding on his own that he prefers not to act.
"I don’t know what DeMarco’s specific legal mandate is. But there is simply no way that it makes sense for an agency director to use his position to block implementation of the president’s economic policy, not because it would hurt his agency’s operations, but simply because he disagrees with that policy.
This guy needs to go.”

In conclusion, I'd like to sing in my best,nasally, gravelly, Bob Dylan voice:

"Come senators, congressmen
Please heed the call
Don't stand in the doorway
Don't block up the hall
For he that gets hurt
Will be he who has stalled
There's a battle outside
And it is ragin'
It'll soon shake your windows
And rattle your walls
For the times they are a-changin'."

I am not a crook – I am a “psychographic factor” analyst

When Richard Nixon said, “I am not a crook,” there were honest citizens in this country who desperately wanted to believe him. They just couldn’t get their head around the idea that the President of the United States could actually be a lying thief, and that the Oval Office had become a Hole-in-the-Wall gang hideout.

So when the truth came out, it was like being hit with a Brain Taser. That’s how I feel about CitiMortgage and Freddie Mac.

Oh sure, I’ve suspected they were up to no good, just like I suspect my dog is feeding his Senior Canine Diet food to the house mice. But I don’t want to believe it’s true. I wanted to believe my loan modification rejections were based on a mix-up somewhere in the morass of middle-management math calculations.

As I researched this topic, I became utterly stunned by the level of duplicity and deceit going on. At the root of the chicanery is something called the Net Present Value, or NVP.

Your head will start twirling around like Linda Blair in The Exorcist if I try to explain NPV as a numeric equation. But just in case you’re a math whiz and want to see what it looks like, here it is:

Alrighty then. Now we can all agree the formula is obtuse at best and a reliable torture technique for terrorists at worst.

TORTURER: “Osama! No food or sleep for you until you solve this math problem!”

OSAMA: “I give up! I’ll tell you anything you want! Just don’t make me calculate the NPV!” NPV is a cloak and dagger, mysterious formula used by lenders to decide whether or not they should give you a loan modification. If it was a clear-cut formula, albeit a complicated one, it might be acceptable. At least then we math-blocked blondes could hire an accountant to input our data and figure out why the banks are declining our loan applications.

But that is not the case. What I do know is that NPV includes a lot more than math. It includes personality profiling. Had I known this, I would have been a lot more circumspect in my dealings with Aisha, my CitiMortgage agent, and her supervisor. These people make INFERENCES about you to decide whether or not you’re a good risk. So when, in a state of total frustration, I told Aisha’s boss, “Why should I sell my house at a loss just to avoid foreclosure? I’d rather walk away from it and let YOU deal with it!”

It was a bluff, because I naively believed the bank didn’t really want to foreclose on my house. I didn’t know that statement was going to end up in my file. It took me back to my kindergarten days, when Miss Kramer wouldn't let me go out for recess until I finished my nutritious (gag) morning snack. Noting my scrawny build and disdain for eating, she said, "Laurie, what on earth do you live on?" "927 Jackson Avenue!" I shot back, giving her my home address as I bolted for the door. To my surprise, Miss Kramer put that in my file to share with my parents at the next parent-teacher conference.

According to Holden Lewis at bankrate.com, loan service providers use the following “guesstimates” to calculate your NPV:

• How many months are likely to pass before you default again. There’s a vote of confidence for you –“Hey, let’s figure this out – if we give her a loan modification and it will reduce her monthly payment by $700, how long do you think she can continue to make her payments? Since she’s a single,middle-aged woman doing freelance work as a web designer, I’ll betcha she’s broke in no time. Put me down for six months in the office pool.”
• How likely the borrower is to catch up on the payments if the loan isn't modified, i.e., the 'self-cure' rate. “Hmmm, her brother is a doctor  her sister is retired and living comfortably, I’ll bet she can hit the family members up for some money to pay what she owes and reinstate her loan.”)
• How much the home is worth now. (more than I owe on it) How much the home will be worth a year from now. (even more than I owe on it,according to FHFA) How much it would cost – from legal fees to utilities – to foreclose and take possession of the house. (1-800-CALL SAUL – cheapest foreclosure fees in town!)
• How much the house would fetch in a foreclosure sale. (a lot. I live in a terrific neighborhood)

In my case, CitiMortgage underwriters (whose undisclosed, windowless location is rumored to be in The Town Without Pity) have probably decided there’s a good chance I can catch up on the payments if they refuse to modify my loan, garnering a better interest rate for their investors. They have also figured out my house would fetch a lot more in a foreclosure sale than my loan is worth – again, more money for the Freddie Mac investors if they DON’T modify my loan.

So,unbeknownst to me, I never stood a chance of getting a loan modification. The boys in the back room at CitiMortgage and Freddie Mac had already decided they’d all make more money if I lost my house. Is this what President Obama had in mind when he created the Affordable Homes Program? I think not.

Julia Gordon, senior policy counsel for the Center for Responsible Lending, told the House Financial Services Committee:"Without access to the NPV analysis, homeowners are entirely reliant on the servicer's good faith. Servicers should be required to allow borrowers to review the property valuation used in the NPV calculation, as it is one of the inputs with the greatest effect on the results."

Julia’s plea fell on deaf ears.

Huge lenders like CitiMortgage hire “Big Brother Is Watching” companies to develop complex data analysis engines. That's nerdy geek terminoloogy which means CitiMortgage hires slimy creeps to justify their decisions when they reject a loan modification request.

Here’s how Brent Lippman, CEO of Response Analytics (one of the slimy creeps), had to say about their smoke and mirrors work: "What you do is define groups of different types of borrowers so you can infer behavior from others like them.”

This analysis includes "psychographic factors," including the depth of the desire to stay in the home. For example, Lippman says, if you tell the servicer that you have deep roots in your hometown, with lots of family and friends, and you don't want to be embarrassed by foreclosure, you will be deemed less likely to re-default. Keep that in mind when you prepare your hardship statement. I had no idea writing the hardship statement would be like writing a college essay. I didn’t spend enough time on either one of them.

I tried to be objective and business-like on my statement. I stuck to the facts. I didn’t know I should be sobbing about my best friend in town who fell down, broke his neck, is a quadriplegic now and needs my help.

Oops, I forgot. They tried to foreclose on him too after he became disabled and couldn’t afford his mortgage payments. They forced him to sell his house on a short sale, losing everything he had.

Reasonable Efforts - I Reasonably Doubt It

“You’re trying to get a loan mod? HAHAHAHAHAHAHAHAHAHAHAHAHA!!!!! You will NEVER, EVER, get it!”

Those were the words of a foreclosure defense attorney I recently met at a birthday party for one of my friends. The attorney’s tone of voice was so shrill and bitter it had a visceral effect on me.

“Why not? SOMEBODY gets them, why not me?” I asked her.

“Ninety-two percent of the people who apply for them DON’T get them, that’s why,” she said. “The only ones who do get them have connections and hire slick lawyers to beat the system. If you’re doing this on your own, you will NEVER get a loan mod.”

I started feeling sick to my stomach. Birthday cake was no longer looking appetizing to me, which should tell you just how sick I was feeling. I live for birthday cake – and Three Buck Chuck.

“But I know of people right here in this town who have gotten loan mods on their own,” I said. Actually, I didn’t know anyone personally who has succeeded in this endeavor, I’ve just heard stories about them. I’m starting to think they are urban legends.

“Where are you in the process?” the lawyer asked me.

“Well, I haven’t been able to pay my mortgage for over two months, I’m waiting for the final decision from Freddie Mac.”

“Did you get a default notice from the bank?” she asked.

“Uh, yes, just one,” I told her.

“You’d better check up on that. They can put you into foreclosure without you even knowing it. They can sell your house right out from under you. Contact the bank first thing tomorrow and see if they have a sale date scheduled.”

She was freaking me out. How could the bank possibly put me into foreclosure without my knowing it? How could they sell my house without my knowledge?

I called the bank immediately the following day. I learned that I had been put in foreclosure that very day. What a coincidence.

“When were you planning on telling me?” I asked Jane, the bank foreclosure person.

“You will get a notice from the attorney we hired.”

“Can I pay something to stop it? I mean, I could pay something, not much, but something.”

“No, you can’t. We can no longer take your money. You have to get reinstated through the lawyer we hired. And there will be additional costs. You’ll owe legal fees, penalties, fines. Contact the lawyer.”

“Why should I pay legal fees? You hired the lawyer, not me. You could have told me yourself that I was going into foreclosure,” I scolded.

She had no answer to that.

She gave me the name of the lawyer CitiMortgage hired, and I called them. They never heard of me. “We don’t have your case file, and until we do, we can’t do anything about it,” the snarky lawyer told me. “Contact your bank. If we don’t have your file, you can still work with the bank.” Then she hung up.

I called the bank back. I called the EXACT same number I called before. This time I spoke to Christie in Homeowner Support Department.

“You called the wrong department,” Christie told me.

“I called the very same number I called last time. It’s on the default letter I received.”

“What’s the number you called?” she asked me.  I told her.

“That’s not this number. This number is a different number,” Christie said.

“I really don’t care. Transfer me back to Jane in the foreclosure department,” I said.

“I can’t do that,” Christie said. “I can transfer you to Aisha, who is your agent who can help you.”

“NOOOO, Please, not Aisha!” I begged, but it was too late. I was being transferred.

My agent Aisha, as usual, didn’t take my call. I talked to someone else in Aisha’s department who told me Aisha is the one to help me get my loan reinstated, and to tell me about my payment options. Aisha never returned my call.

Three days later I got a letter from a DIFFERENT lawyer who was handling my case. The first lawyer I’d been referred to by the bank was the incorrect lawyer. Apparently, there’s a very large selection of debt collection lawyers in Michigan. No surprise there. The sharks are circling... Meanwhile, the clock was ticking on my foreclosure.

The lawyer’s letter began with, “All reasonable efforts afforded you to cure this default have failed…”

All reasonable efforts???!!! I got ONE letter from the bank. One. Not a phone call, not a follow-up letter, not an effort to work out a payment plan, nothing. If that’s how they define “reasonable,” I’d hate to have them for a jury, left to determine “reasonable” doubt if I were charged with a crime. I could just see it: “Well, she had a nail file in her purse, and the victim was murdered with a pointy instrument, so we don’t think there’s any reasonable doubt about it. She’s the murderer.”

The new lawyer informed me that, according to Michigan law, I could request a meeting for mediation and that would put my foreclosure on hold for 60 days.

“Then I’m requesting that meeting,” I told him.

“You can’t request it until you get a letter from us,” he said. “Then call back and request it. At that point, we can work with you.”

“What exactly will you be doing to work with me?” I asked. “Setting up a payment plan? Lowering my interest rates?”

“We will give you a package of paperwork to fill out, and then we will work with CitiMortgage to see if we can…”

SPOILER ALERT!! What he said next will either make you want to stick a pencil in your eye to offset the pain in your butt or cause you to fall off your chair laughing at the absurdity, or both.

“We will see if we can get you a HOME LOAN MODIFICATION,” he finished.

“You have got to be kidding,” I said. “I am already working with CitiMortgage to get a loan modification.”

“Then you know what paperwork we will be asking from you. It’s exactly the same,” he said.

“What is the point of this? Why should I pay you to negotiate with CitiMortgage for a loan mod when that’s exactly what I’m doing now, on my own?” I asked.

“You don’t have to work with us,” he said glibly. “But if you don’t, we can’t put your foreclosure on hold.”

Oh, now I get it. The banks are THE GOOD GUYS. They are actually creating jobs. They’re creating jobs for debt collection lawyers who can charge me to try and get a loan modification. And if - or perhaps I should say when - they fail, I then have to PAY them as well as try to come up with enough money to pay off my arrears, fines, penalties and everything else the bank says I owe them.

What a racket. Now I have reasonable doubt about the legality of all this mess.

The Life-Sucking Machine and The Pit of Despair

Whoever wrote “The Princess Bride” and came up with the Life-Sucking Machine and the Pit of Despair must have been dealing with bankers at the time.

It describes corporate banking perfectly.

CitiMortgage cranked the Life-Sucking Machine up to nine on a scale of one-to-10 when they announced that I was officially in default on my loan, and I had 14 days to pay up. Or else.

Okay, it didn’t say “or else,” but the intention was plainly there.

It wasn’t signed. It didn’t include a contact phone number. Clearly, they didn’t want to talk to me. They wanted me to pay up, or else.

Technically, the part I interpreted as “or else” said:

“Failure to cure the default may result in the acceleration of all sums due under the Security Instrument (what’s a Security Instrument? I’ve never heard one being played at my monthly jam sessions).

“The Security Instrument entitles us to collect all expenses incurred in pursuing our remedies. (Remedies? Is the bank sick? Want me to send over some chicken noodle soup? I have a nice little arsenic and chipotle chicken soup recipe I’d love to cook for you…)

“Under IRS regulations, we may be required to report any foreclosure to the IRS. The foreclosure may result in income tax consequences to you.”

I am not a financial whiz, but I interpreted the statement to mean that they were planning to foreclose on me. And if I went into foreclosure, I may have to pay income tax on it.

How can that be? Is the IRS muscling in on the bank loan modification and foreclosure scam? How can I be required to pay taxes on a COMPLETE LOSS, which is what I would incur if I went into foreclosure and they sold my house?

While I was wandering around in the Pit of Despair (also known as the bottom of a cheap bottle of wine), I combed through my four-inch thick file of paperwork related to my loan modification. I found a letter from my old pal Rachel that I’d overlooked earlier, since Aisha told me the letters from Rachel are automatically generated form letters. And here I thought Rachel was missing me terribly all this time and writing me letters to express her feelings of unrequited loan modification love.

Poor, sweet, innocent Rachel. Her letter said:

“We remain committed to helping you identify all possible solutions regarding foreclosure alternatives. There may be a number of options available to you.

POTENTIAL SOLUTIONS MAY INCLUDE:

·         Loan modification – may allow you to reduce your monthly payments.”

I swear, that’s what the letter said, in capital letters, just like that. POTENTIAL SOLUTIONS MAY INCLUDE a loan modification.

Is CitiMortgage such a behemoth of a bank that they have no idea what each department is doing on behalf of the same client? Talk about one hand not knowing what the other hand is doing. One hand is extending an olive branch while the other hand is picking my pockets.

I’ve heard the expression “Too Big to Fail” bandied about when people discuss the Great Recession and the huge banks that brought our economy down.

We need another expression for them now: “Too Big to Succeed.” They’re already failing. They’re failing every taxpayer and mortgagor in this country.

At one point in this frustrating process, my brother offered to help out. He said he’d come to Michigan and sit down with the bankers and me to discuss this situation and work out a solution.

Talk about Jimmy Stewart in "Mr. Smith Goes to Washington."  When it came to big banking, my brother was a rube. I told him, as gently as I could, that there were no bankers to sit down with. I didn’t even know which of the many corporate offices of CitiMortgage was handling my case, but it most certainly wasn’t a real, live banker in Michigan. I told him there would be no “sitting down” with the underwriter who makes these decisions, because no one at CitiMortgage will reveal who the underwriters are. They could be mail room flunkies for all I knew, spending somewhere between 15 minutes or 12 seconds on their “Approved” or “Denied” decision, depending on whether or not it was getting to be lunch time and they didn’t want to miss the Wienie Wagon outside.

What a novel idea. Sitting down with reasonable people and working out a solution. I wonder how much money CitiMortgage could save if, instead of send out reams of automated forms and paying heartless, middle management personnel to put up with angry people seeking a loan modification, they simply assigned one level-headed person to spend one hour actually talking face-to-face with the person applying for a loan modification.

One hour.

That’s all it would take. I could bring all my bank statements, paycheck stubs, income and expense reports to the meeting, and the banker could tap away for a few minutes on a calculator and then either say, “Yes, you qualify,” or “No, you don’t.” And if it was the latter, the CitiMortgage banker could sensibly work on a plan to lower my interest rate and extend the terms of my mortgage, without government interference, so that I could keep my house and they could continue to make money on my loan interest, albeit with a slightly smaller profit margin.

Whoops. I must be thinking of another Jimmy Stewart movie, “It’s a Wonderful Life.” Too bad life doesn’t always imitate art.

Breaking Up is Hard to Do

My pal Rachel at CitiMortgage, who was no longer my agent and supposedly had nothing to do with my loan mod anymore, sent me a letter saying I had been rejected for a HAMP loan modification because of Excessive Forbearance.  (see Jerky Jargon & the Secret Meanings to learn about Excessive Forbearance)

I’m quoting the reject letter here:

“We are unable to offer you a Home Affordable Modification because we are unable to create an affordable payment equal to 31 % of your reported monthly gross income without changing the terms of your loan beyond the requirements of the program.”

The key words are, “BEYOND THE REQUIREMENTS OF THE PROGRAM.”

In other words, the bank could choose to be nice and give me a loan mod, but they aren’t REQUIRED to do so. It’s their decision. And if they think it might not serve their investors well to give me a loan mod, they don’t have to.

Hey greedy investors, guess what?

It’s like the old song, “The knee bone’s connected to the thigh bone… the thigh bone’s connected to the hip bone…”

Freddie Mac loan modification policies are connected to my ability to spend money…my ability to spend money is connected to jobs and consumerism in America…

If I got a loan modification, I would have an extra $700 in discretionary income every month. I could afford to buy a new refrigerator, and then the appliance store could afford to get more inventory and hire more sales people.

I could afford to hire a painter to paint my peeling house, and then the painter could afford to buy his girlfriend a slutty pair of high heels that he’s so fond of.

I could save up for a facelift, and then the plastic surgeon might decide I don’t look so bad after all and take me out on an expensive date. Or maybe not…

You get my drift. Freddie Mac and its refusal to give loan modifications is killing jobs in this country. If only eight percent of the people who apply for loan mods get them, then 92 percent are holed up in their homes, trying to fight off foreclosure. They’re squeezing every dime they have and diving under the couch cushions, looking for spare change they can offer to the lawyer they’ll have to pay for the foreclosure proceedings.

Trust me, I know a thing or two about penny-pinching. At one point in this process, when I was still trying to keep up with my mortgage payments, I resolved I wouldn’t buy any groceries for a month; I would simply live off the food I had lurking on hard-to-reach kitchen cupboards and the bottom rack of my refrigerator door.

I became a frugal foodie, and invented such delicacies as the Bacon Crumble Swirl: Take old bacon bits, sprinkle them on a stale potato chip and drizzle with Log Cabin syrup. It makes a great late night snack and also satisfies three of the four food groups so necessary for people fighting off foreclosure: sweet, salt, fat and 86-proof.

But I digress.

I called Aisha to see what was up with the letter from Rachel. I thought Rachel and I had broken up long ago.

Aisha didn’t answer the phone so I talked to someone else in her department.

“It’s just a form letter, automatically generated,” said the Aisha clone.

“Then may I please speak to Rachel? I have questions about this ten-page letter,” I asked, very politely. I gave her Rachel’s phone number and extension, to be helpful.

“I’ve never heard of Rachel. I don’t know of this phone number. Are you sure the letter was sent on CitiMortgage letterhead?” she asked.

“I am positive. I have spoken with Rachel, but it’s been awhile. We’re not going steady anymore, we’ve sort of drifted apart... You know how it goes. So can you transfer me?”

“No. It doesn’t matter anyway, it’s an automated letter. You have not been rejected. Your loan mod request is still at Freddie Mac. We are still waiting for their approval.”

I felt encouraged that she said they were waiting “for approval.” It made it sound like they had some inside knowledge that I’d be approved this time.

The Aisha clone told me to ignore Rachel’s form letter, which I didn’t do. It was the most thorough letter I’d ever gotten from CitiMortgage, and I figured it had at least some valuable morsels of information somewhere in the wordy, technical pages.

As I read it, I discovered they had incorrectly listed my monthly income as being $1,000 less per month than I had reported. Mistake Number One.

It also said I owed $24,000 on my mortgage than I really did owe. Mistake Number Two.

It also said my house was worth $59,000 less than Zillow.com says it’s worth. Mistake Number Three.

The letter said I had 30 days from the date of the letter to correct the errors and request an appraisal for my home if I thought their calculated value was incorrect. Of course, I had to pay for the appraisal up front.

I’m going to call Rachel soon, to see if I can straighten any of this out, and to see if it really matters anymore.

It’s like the breaking-up process with a lover. It’s probably over, and you know it, but you can’t help yourself. You ask the soon-to-be ex, “But what if I’d talked to you more over breakfast? Would that have helped? If I’d cooked your mother’s lasagna recipe more often, would you have been happier?”

It’s a pointless exercise in “Coulda, Shoulda, Woulda,” and it serves no purpose except perhaps, to learn what you should do in the future with your next mate, to keep that person happy. I hope my next mate at CitiMortgage appreciates all my efforts to make him or her happy so they’ll give me the damn loan modification.

 

 

 

 

 

I'm Just Sayin'

After writing to my wonderful Senator Levin, I started seeing a glimmer of hope on the loan mod front.
He sent a letter to the U.S. Department of Treasury on my behalf. Then, a nice person in his office contacted me to see how things were going.

“Not great,” I told her. “I keep getting the runaround at CitiMortgage.”

“You can report them to the Consumer Financial Protection Bureau,” she told me.

Huh? There’s a government bureau designed to protect consumers and their finances? This was news to me.

“Go online to their website, http://www.consumerfinance.gov , and submit a complaint. They will contact your lender and your lender must respond within 30 days.”

Wow. An actual agency that would hold CitiMortgage’s feet to the fire.

“I’m waiting for a call back from CitiMortgage, but if that doesn’t result in anything, I’ll do that, thanks!”

My old person at CitiMortgage, Ramon, told me my case was closed and I could resubmit my paperwork in 60 days to a new person at Citi and try again for a loan modification.

My newer person at CitiMortgage told me I had 30 days to correct my old application if the income on that form was incorrect, which it was. But that new person disappeared in the wind. I had neglected to get her name and phone number. Finding people at CitiMortgage is like trying to be the 137^th caller to a radio station to win tickets to the Rolling Stones.  You can’t get no satisfaction.

My newest person at CitiMortgage was in the Homeowner Preservation Department. I liked the sound of that department, although I now know it’s just window dressing. Its true name should be the “Appease the Peasants” department.
Rachel was my new person. She was extremely nice. I could tell by her voice that she was very young and idealistic. She actually believed she was going to help me get a loan mod. Someone as nice as she is won't last long in the banking industry.

When Rachel called to apologize for the delays and miscommunications, I asked to speak to her supervisor. The supervisor told me I wasn’t in imminent default and my case was being closed – again. I told her calmly that I was online, at the website of the Consumer Finance Protection Bureau, and I was one click away from submitting a complaint.

“I just don’t think we can do anything more, your income is insufficient for a standard loan mod, and more than sufficient to meet the imminent default criteria…”

Click.

I submitted my complaint. Laissez les bons temps rouler, as they say in the Foreclosure Department.

Ten days later I got a call from Aisha.

“This is Aisha, I’ll be your new agent at CitiMortgage. I’m with the Executive Response Unit,” she announced importantly.

“I called and was told I’d be working with Catherine now, after working with Rachel, and Ms. No Name and Ramon before that,” I said.

“Ms. Doe, you are delaying your progress on a loan modification by calling CitiMortgage and talking to the wrong people,” Aisha told me. “Stop calling CitiMortgage. You are just hurting yourself and your case with all these phone calls. I’m the person to talk to.”

“Listen here, Little Missy,” I snapped. I could tell she was young, but would probably eat her own young if she had any. “I keep calling CitiMortgage because you keep jerking me around. How do I know you’re the RIGHT person to talk to?”

“I am with the Executive Response Unit, the highest level you can reach if you’re trying to get a loan modification.”

Aha. My complaint to the CFPB paid off.

“Now, did you get my email? You have three days to respond to it or we’ll close your case.”

“No, I didn’t get your email,” I told her.

“Well, it might have gone into your spam. Don’t you check your spam?”

“No, I don’t check my spam. That’s why it’s called spam. It is stuff I don’t want to read.”

“At any rate, I sent you an email requesting a new profit and loss statement, new income and expenses report, year to date. I also need all your new bank statements for the past two months and pay stubs for the last two months. If you get these to me in three days, your case will be reviewed immediately and you’ll have a response in seven business days.”

I did as I was asked. I dropped my other work (meaning I wasn’t getting paid, since I only get paid when I work as a freelancer) and complied with her request.

Three weeks later (not seven business days later) I got a response. I had been turned down again because I didn’t meet the imminent default criteria.

“I want to talk to your supervisor,” I told Aisha. She put me on the phone with her supervisor, Priscilla.

It went like this:

ME: Why haven’t I met the imminent default criteria? I owe you for two month's payments.

PRISCILLA: You didn’t pay in April, then you paid in May, and you didn’t pay in June, so you are only 30 consecutive days in arrears.

Rats. I remembered that I cancelled one auto payment, and neglected to cancel ALL my auto payments, so a payment did go out. Needless to say, I didn’t have enough money in my account to cover the mortgage payment, so I got hit with a $37 insufficient fund fee. And then I had to sell some more stuff on ebay to cover the shortage. I’ll miss that antique toaster and sterling silver gravy boat.

ME: So it has to be consecutive days? Sixty-one consecutive days that I haven’t paid my mortgage, and then I’ll meet the imminent default criteria? Then I’ll qualify for a loan modification?”

PRISCILLA: Maybe, maybe not. What makes you think you’ll get a loan mod if you meet the imminent default criteria?

ME: Because you keep sending me rejection letters saying I didn’t qualify based on the imminent default criteria.

PRISCILLA: There could be other reasons you don’t qualify.

ME: Aren’t you obligated to tell me those reasons then?

PRISCILLA: We don't know the reasons, it's up to the underwriter.

ME: Then can I please speak to the underwriter?

PRISCILLA: No. So what’s your plan, if you don’t get the loan mod are you going to pay up on your past due balance?

ME: No. I don’t have the money.

PRISCILLA: Then you’d better have a back-up plan. Are you going to sell the house?

ME: No. It’s all I have. Every penny I have is in this house, and I’m not going to sell it at a loss in this economy.

PRISCILLA: Then you’d better come up with a back-up plan, and fast. You don’t want to go into foreclosure. That will look bad for you.

ME: Let me see if I get this straight. You want me to sell my house at a loss right now so I don’t go into foreclosure. I will have to hire a realtor, pay a real estate agent commission, keep my house in perfect shape for showings, and then sell it at a loss and walk away with nothing. Or I can let it go into foreclosure and YOU can sell it and I don’t have to deal with all of that. The end result is the same.

PRISCILLA: I’m warning you, Ms. Doe, this will not go well for you if you don’t have a back-up plan.

ME: Sounds like you already know how this is going to turn out, even if I meet the default criteria.

PRISCILLA: I’m just saying.

ME: And I’m just saying I’ll take my chances.

Priscilla was right. I was wrong. They had it in for me, but I had no idea what was coming next.

 

 

 

Dear Senator... HELP!

Below is an abbreviated version of the letter I sent to Senator Carl Levin.

He and his office were extremely helpful. He sent a letter to Mr. John Hardage, Congressional Liaison Director in the Office of the Comptroller of the Currency, U.S. Department of Treasury.

I'm not sure who John Hardage is or what his role is in all of this, but I was impressed with his extremely long title.



Dear Senator Levin,

I am hoping you will see the tragic irony in my situation after learning that I was turned down for a home loan modification. I was turned down for the HAMP modification because my income was deemed to be sufficient – I was turned down for a traditional loan modification because my income was deemed to be insufficient.

I listen to the news, so I have some understanding of the appalling practices going on with Freddie Mac,which owns my mortgage. I am including an excerpt below and the website source from NPR:

http://www.propublica.org/article/freddy-mac-mortgage-eisinger-arnold

Freddie’s charter calls for the company to make home loans more accessible. Its chief executive, Charles Haldeman Jr., recently told Congress that his company is “helping financially strapped families reduce their mortgage costs through refinancing their mortgages.”

But the trades, uncovered for the first time in an investigation by ProPublica and NPR, give Freddie a powerful incentive to do the opposite, highlighting a conflict of interest at the heart of the company. In addition to being an instrument of government policy dedicated to making home loans more accessible, Freddie also has giant investment portfolios and could lose substantial amounts of money if too many borrowers refinance.

“We were actually shocked they did this,” says Scott Simon, who as the head of the giant bond fund PIMCO’s mortgage-backed securities team is one of the world’s biggest mortgage bond traders. “It seemed so out of line with their mission.” The trades “put them squarely against the homeowner,” he says.

I am one of the taxpayers who bailed out Freddie Mac, and now they won’t bail me out because they want bigger profits for their investors. But as a taxpayer, I AM one of their investors.

I believe I am one of the homeowners President Obama refers to when he talks about hard-working citizens who should be able to benefit from lower mortgage interest rates and loan modifications.

I bought my house in 2004, when home prices were inflated. I got a 30-year fixed loan at 5.75 percent. I was not a reckless investor. I put 20 percent down on my home.

In 2009, I was laid off from my job as communications manager. I couldn’t find a full-time job after months and months of searching, so I started my own freelance communications business. I also had to file for bankruptcy.

I have spent years working two, three and four jobs at a time, 50 to 60 hours a week, to support myself and stay current on my mortgage. I have never missed a mortgage payment.

I chose not to sell my house because it is the only investment I have, and I would lose all my equity in it in the current economy. Even if I did sell it, I would never be able to buy another, less expensive home because of my bankruptcy and because I am now self-employed with an unstable income.

Most of my freelance work is for nonprofit organizations. My biggest client recently cut back the work they could give me, so my monthly income has now been reduced by $1,000 per month. In my opinion, that puts me in imminent default on my mortgage loan. I am also the volunteer editor of the street newspaper in Ann Arbor that helps homeless people earn an income. I am proud to say that our newspaper has moved quite a few homeless people into housing, yet it pays me only a tiny stipend for the work I do. Another irony – the work I do to help homeless people get into housing doesn’t pay enough to keep me in my house.

I have not missed a mortgage payment, no matter what. I have already sold all my jewelry. I have sold the family china. I have sold furniture and paintings. There is nothing left to sell in my house.

I am 58 years old, living alone in Michigan, and have resigned myself to the fact that no one wants to hire someone of my advanced years in the area of my expertise, which is communications, social media and web design. All companies prefer to have young people doing that type of work at a lower salary.

Experience doesn’t count for much in a bad economy.

I know that the only way I can possibly be considered for a home loan modification now is if I miss a mortgage payment, and the thought of that horrifies me. I’d rather be behind in my heat and electric bills than miss a mortgage payment.

It seems that responsible people like me are getting punished for doing everything we can to pay our mortgages.

There is something deeply flawed in this nation when our lawmakers can’t correct this situation. It doesn’t take a genius to see that extending loan modifications to people like me will help the economy tremendously. Had I qualified for the loan modification, I would have $700 extra income every month. Money I could spend on a plumber to get the hot water working in my kitchen. Money I could use to hire a painter to paint my home’s exterior, which is crumbling and peeling. Money I could use to pay a carpenter to fix my front porch, and a mason to fix my chimney. And all those workers, in turn, would have more money to spend as a result. The multiplier effect would quickly pump much-needed money into the economy.

But that isn’t happening. Instead, the top six executives at Fannie Mae and Freddie Mac earned $35.4 million in 2009-2010.

I can assure you I’m not alone when I say that I am very seriously considering becoming an expatriate and living in Central America if this type of flagrant abuse of the bottom 99 percent doesn’t change. It’s a very sad day when living in third world countries like Honduras or Guatemala is more appealing than living in the United States.

Sincerely,

Your hopeful constituent, Laurie



"Time After Time"

“Lying in my bed I hear the clock tick,
And think of you
Caught up in circles, confusion
Is nothing new”

–  Cyndi Lauper, Time after Time

If you read my first post, you have figured out that I applied for a home loan modification – unsuccessfully. To be more accurate, I’ve applied numerous, abundant times for a loan modification – unsuccessfully. I’ve been at it for over a year now. Any sane person would have given up by now, but not me. I am not sane. I used to be sane, but the banks have turned me into a rabid mongrel. I want to bite someone. Badly.

Each time I apply and get declined for a loan mod I learn something new about the system. (That’s the “insider” jargon – a loan mod. When you’ve been at it as long as I have, time is of the essence and it takes too long to say “home loan modification).

The first time I was rejected, I learned about the different types of loan modifications. (see Jerky Jargon & the Secret Meanings)

I learned this after Ramon at CitiMortgage unceremoniously dumped me. I called to ask him why I got declined, and he avoided my phone calls as if I was a crazy lady with 60 cats in my bedroom and I was asking him to clean the kitty litter.

He finally returned my 47^th call and told me he had to close my case and if I wanted to continue to pursue a loan mod, I’d be assigned a new agent and could start the process all over again.

“That’s ridiculous!” I told him. “You have all my paperwork! Why should I start all over again?”

I didn’t get an answer. He hung up on me when the desperation in my voice started to reach screechy high notes that could shatter glass.

So I called someone else at CitiMortgage. The new person told me that of course, being the kind and wonderful corporation CitiMortgage was, they had considered me for more than one type of loan mod, and I didn’t qualify for any of them.

“Your income is acceptable to make your mortgage payments according to the HAMP standards, so you don’t meet the Imminent Default criteria. Your income is too little to qualify for a standard loan modification,” this person told me. I’ve forgotten her name. She was like a one-night stand mingled in with my many other jaded suitors at CitiMortgage.

“So you’re telling me I make too much for one loan, and too little for another? What is this, The Three Bears? Isn’t there a loan that is ‘just right’ for me?” I asked plaintively. I was Goldilocks, and I wanted the happy ending. But come to think of it, Goldilocks got booted out of the bears’ house and had to go live in the woods as a homeless woman, so maybe the bank was sticking to the fairy tale.

I told her my situation had changed, and according to the reject letter I received, I had 30 days to correct any errors in their summary. The big error was my income.

“My main client is a nonprofit organization, and they have cut back significantly on the amount of work they can pay me for,” I explained. “My monthly income is being reduced by $1,000 a month. I have a letter from them to prove it. Doesn’t that change the picture?”

I was told to reapply, and to fill out new paperwork, and do a new profit and loss statement. A profit and loss statement is defined by me as – A statement required by the banks if you are now a full-time freelancer with your own “business.” If you’re like me, it’s mostly a “loss” statement and your “business” consists of a small room in your house where the dog sleeps and sheds on the only nice chair you haven’t sold on Craig’s List while you comb the Internet looking for more work.

Miss No-Name at CitiMortgage told me, about a month later, that I was declined for a loan again because I didn’t meet the Imminent Default criteria – again.

I was starting to regard this Imminent Default criterion like the seemingly perfect man on match.com who won’t answer any of my emails. (Why wouldn’t Imminent Default have anything to do with me?  What was it about me that Imminent Default didn’t like?) So I decided if Imminent Default didn’t want me, I would have to find out just what Imminent Default sought in a partner. (see Imminent Default under Jerky Jargon & the Secret Meanings).

After learning how to meet the Imminent Default criteria, I formulated a new plan. I wouldn’t pay my mortgage anymore. It wasn’t exactly rocket science, since I no longer had enough income to pay my mortgage anyway, and I was pretty sure they wouldn’t force me to tap into my meager IRA to pay it.

As a good, conscientious homeowner, I had my mortgage payment set up electronically to be paid on the first of each month. Unfortunately for me, I made a small error in cancelling the payment and it cost me another month or so of messing with the banks and eventually put me into foreclosure.

But I’ll save that for another post. The one that comes after, “Contacting my Senators for help.”

Diving into a loan modification

So you lost your job. You've been a responsible homeowner, making your mortgage payments every month since you bought your home a decade ago.

Your payments were manageable on your former salary - such is not the case while living on unemployment benefits and freelance work.

So you dive into the home loan modification process. First comes the interview with a HUD (Housing and Urban Development) counselor, who will have you fill out several questionaires and submit an income and expenses report. After what seems like 47 years (but is probably a couple of months) the HUD person tells you that you qualify for a home loan modification.

Yippee! That was easy. You ask where you sign the papers.

Not so fast.

HUD (which now stands for How can U Deny me?) simply tells you that you qualify according to THEIR standards. Your paperwork will be sent to your loan service provider, aka, the bank that you thought had your mortgage. In my case, it was CitiMortgage. They do NOT own my mortgage. Freddie Mac owns my mortgage, CitiMortgage is just the service provider, although it's not really service they provide - it's migraine headaches, empty promises and 972 requests for more paperwork.

But, like any relationship gone bad, your relationship with the agent assigned to work with you at CitiMortgage starts out with roses and sweet talk.

My first CitiMortgage agent was Ramon, who, upon our initial conversation, made me feel like he was my new best friend. My comrade in arms. My little buddy against the big, bad Freddie Mac.

"Yes, we got your paperwork from HUD, and it definitely looks like you qualify for a home loan modification," Ramon told me in a voice with sexy financial undertones.

"Oh boy, oh boy, what do I do next?" I asked eagerly, ready to cook Ramon dinner if he could hasten this process along.

"I will send you a package of documents you need to fill out, then you simply return it in the pre-paid mailer I will include, and then we wait for your approval."

Music to my ears. Ramon and I were a "We." Not a "you" and "me," a "We." As in team.

When the package arrived, I was stunned at the amount of paperwork, but not deterred. I had Ramon at my beck and call, ready to help with everything. So I called him.

"Ramon, what is this "imminent default" requirement? What does that mean?" I asked.

"That means you have to prove that your are at imminent risk of defaulting on your loan," he explained.

"But how do I prove that? I haven't missed a mortgage payment yet, what would make them think I'm suddenly about to go under?"

This was when Ramon told me his first slick lie - a lie of omission. "Well, I don't know exactly how you prove that, but why is it you're applying for a loan modification? That's your answer," he told me.

"I have been selling off everything I own to make my mortgage payments," I told him. "Family silverware, jewelry, furniture, my kids' baby teeth, anything anyone will buy on ebay. I've run out of things to sell, so I guess I'm in imminent default, eh?" I asked hopefully.

He sidestepped my question with another question.

"So how much, exactly are you making? We need to do a profit and loss statement for you," he offered helpfully.

"Aha! I get it! I have to make enough money to be a decent risk for a loan modification, but not so much that I'm not in imminent default!" I was warming up to this game.

"Yes, something like that," he replied.

"So, I have to hit the sweet spot, showing just the right amount of income to satisfy them, but not too much. Is there a formula for this?"

There is, indeed, a formula, but now that I've been at this a year, I can assure you the bank will never, ever tell you the real formula. I don't know if they even know the formula. I think it's kept hidden in the bat cave in the basement of the U.S. Department of Treasury.

"The goal is to get your total monthly payment, including mortgage loan, taxes and insurance, to a point where it is 31 percent of your gross monthly income," Ramon explained. "First, we look at your monthly income in relationship to your loan and reduce the loan interest rate to 2 percent, and see if that brings your payment to 31 percent. If that doesn't do the trick, we extend the loan to 40 years."

I was doing the math while he was talking. I could see that doing those two things would bring my monthly payment to 38 percent of my gross monthly income. As it currently was, I was paying 52 percent of my monthly income on the loan, taxes and insurance. As they say on Wall Street, ouch.

"38 percent is great! I'll take it! Sold! Where do I sign?" It wasn't 31 percent, but close enough for government work, I figured.

"It doesn't work that way," Ramon said. "According to the terms of the Home Affordable Modification Plan (HAMP), we must get the loan payment to be at 31 percent, and not a penny more. I agree with you, it would be nice to just be able to re-write the loan if you're at 38 percent..."

"Well, that's just stupid," I said to my dear new friend Ramon. He was obviously on my side. We were smart, clever people outfoxing the "System" but the "System" wouldn't play ball with us.

Ramon gently instructed me to fill out all the paperwork return it, and see where the chips might fall.

"If you get close to 31 percent, like 32 or 33 percent, then they (whoever "they" are) might forgive some of the principle in your loan," he told me.

Now we were cooking on the front burners. I liked the sound of that.

"So I need to wiggle around with my income to try to hit that sweet spot," I said.  "I can do that, I'm a freelancer, after all. There is some squishy income in there I can fiddle with," I told him conspiratorially.

He laughed encouragingly. "Yes, that would be good."

And with that, I dove into the home loan modification process. No one told me how deep and dark the water would be, and how strong the current. Imagine my financial heartbreak when I discovered my dear Ramon would soon abandon me midstream.