Home Foreclosure: As Sleazy and Shady As You Think

03/11/2010 2:36 PM |

mr. potter

Following up yesterday’s very important story of the parrot who was seized as part of a home foreclosure gone wrong, I noticed some further details in this Wall Street Journal piece—scary details:

Mortgage lenders have struggled in the past three years to hire and train enough people to deal with the biggest wave of foreclosures since the 1930s. Nearly eight million households, or 15% of those with mortgages, are behind on their payments or in the foreclosure process.

And (cue Capra on this one):

At the same time, suicide threats from distressed borrowers are so common that one lender, OneWest Bank Group in Pasadena, Calif., had to establish procedures for alerting the police.

Jesus. But it’s no wonder people are desperate, as they’re trying to work with predatory financial institutions designed to be difficult and elusive, forcing homeowners to jump through multiple procedural hoops just to pay the money they owe (despite that the fact that half of these properties are “underwater” and nobody wants them anymore). The case of Ms. Iannelli—she of the parrot—is pretty typical: At the time of her home invasion she’d missed just one payment and was not in default, and still Bank of America sent a contractor to her house who cut water lines and electricity and poured antifreeze into the plumbing. Pretty horrible, right?

Yes, and I actually have my own mortgage horror story, so pull up a chair. My wife and I own a house upstate, in the Hudson Valley. Over the last two years the holder of the mortgage has changed three times (as various mortgage companies went under, were bought, changed names…), and with each change the payment procedure was altered.

And while these changes were stressful and irritating, there wasn’t really a problem until this last awful company took over. Get this: about six months ago we notice the monthly mortgage check hasn’t been withdrawn from our bank account, even though it’s been three weeks. We call the mortgage company. A nice man tells us it’s just a clerical error and should be fine. We send the next check. Three weeks after that and neither check has been cashed. Weird. We call again. Another man, less nice, takes a while but eventually tracks down the two checks and tells us everything should be fine. Cool.

And then we send another check. One more week goes by and none of these checks have been cashed and we’re kind of scratching our heads at the way our mortgage company is acting like a distracted trustfund kid who has so much money he can just let checks sit in his knapsack, uncashed. So we call again…

Guess what? We’re in foreclosure! For some reason the person we get on the phone actually has real information:

“You haven’t been writing your account number on the checks,” he says.

“But we’ve never done that. The name and address on the checks is for the property in question. We’ve been sending you money for three months. How can we be in foreclosure?”

“We need the account number to process the checks.”

“Well, can you go ahead and cash those three checks now?”

“No. Now that you’re in foreclosure, we need a bank-certified check to clear the balance. And there are late-payment fees.”

“*”

In the end, we sorted it out and talked to someone in a sufficiently senior position who could see to it that the little “foreclosure incident” didn’t affect our credit (infuriatingly, though, we had to pay late fees). But the whole experience—in which we repeatedly tried to pay our mortgage but were denied—has left me rattled, and really given me a true understanding of the term “predatory lender.” I’ve never felt so powerlessly fucked in my life, which I suppose makes me lucky, but still—FUCK YOU, MORTGAGE COMPANIES.

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