Journalism in the Public Interest

Loan Mod Profiles: For Some, a Modification

Permanent loan modifications can save homeowners from foreclosure, reducing their payments by an average of 36 percent. But for some, the help does not go far enough.

Based on stories from hundreds of homeowners, we're showing what it has been like to seek a mortgage modification through the government's program. Earlier, we detailed what 373 homeowners told us about their experiences. To put a face on those numbers, we're also profiling homeowners who represent common situations. This is the fifth of five.

Roderic and Rachel Brame, of Land O' Lakes, Fla., received a permanent loan modification 14 months after first contacting their bank. (Photo by Skip O'Rourke/ProPublica)

It all started after Roderic's contract running the science department at a private school was not renewed in February 2009. (Photo by Skip O'Rourke/ProPublica)

When they first contacted Bank of America in April 2009, the Brames were told that in order to get help, they had to be late on their mortgage. (Photo by Skip O'Rourke/ProPublica)

In January 2010, four months after writing letters "to a lot of the big bosses" at Bank of America, Roderic and Rachel found out they were eligible for a temporary modification. (Photo by Skip O'Rourke/ProPublica)

In early June, they received their permanent modification and pay 45 percent of their original mortgage payment. As for their first piece of advice, Roderic and Rachel say document everything. (Photo by Skip O'Rourke/ProPublica)

Download the audio.

Listen to Roderic and Rachel talk about the loan mod process.

Earlier this summer, Florida homeowners Roderic and Rachel Brame finally got the help they had been seeking: a permanent reduction on their monthly mortgage payments.

Such reductions can be elusive -- a Holy Grail for many struggling with their mortgages. Homeowners who have started trial modifications through the government's effort to reduce foreclosures have been more likely to be denied than to get the program permanent's fix. For those who do get permanent help through the program, the average payment drops by 36 percent, or $510 a month. The reductions are helpful, though many program participants still have large amounts of debt.

The Brames are among nearly 435,000 homeowners who have finalized modifications through the government's program. Under the program's rules, qualified homeowners make trial payments for three months, at which point their mortgage servicer is supposed to approve or deny a permanent modification. (We've reported that most trial periods have lasted longer, frequently dragging on for more than six months.)

Like the majority of homeowners with permanent modifications, the Brames fell behind on their mortgage because of a drop in income. Roderic Brame ran the science department at a Tampa-area private school whose enrollment dropped because of the economy. He learned his contract would not be renewed. As the couple's money troubles worsened, they first called Bank of America in April 2009, but they say they were told -- incorrectly -- that they were eligible for help only once their payments were late. (Almost half of the 373 homeowners who wrote into our questionnaire say they got the same erroneous advice.)

After the Brames fell behind, they called their bank again and again. They wrote letters to executives, kept meticulous notes, and worked with a housing counselor from the government-sponsored HOPE Hotline. "I wasn't convinced it would happen until I had the paper in hand," Rachel Brame said.

In early June, they received a FedEx with documents that said their payments were reduced by more than half.

Bank of America spokesman Rick Simon, "We are glad that we were able to qualify them for a modification."

For many, modifications make a critical difference. "It saved my house," said Bernadette Van Lenten, a Florida homeowner. She said the process with servicer, CitiMortgage, was exhausting but worth it.

"I had to start over with my story each and every time I talked to them," Van Lenten recalled. "I wanted to put it on a tape recording so I could just hit the play button."

Other homeowners complain that modifications do not offer enough help. Even after modifications, homeowners typically have significant debt obligations, with 64 cents on every dollar they earn, on average, going to pay their mortgage and other loans, like credit cards or second mortgages.

Also, the program does not forgive principal. Instead, it sets aside some of the loan balance to be made as a balloon payment at the end of the loan. The average homeowner who gets a modification still owes 50 percent more on the loan (PDF) than the houses is worth, according to the U.S. Government Accountability Office.

Agnes Prehn, who lives on the Big Island in Hawaii, said that, despite her modification, she fell behind on her payments and decided to file for bankruptcy to expunge her second mortgage. "My whole salary is going straight to the mortgage so we can get current," she said.

So far, homeowners whose loans were modified through the government program have been about half as likely to fall behind on their modified payments as homeowners whose loans were modified outside the government program. The Treasury Department reported that 15 percent of homeowners who received modifications last summer have defaulted again on their mortgages.

About one-third of homeowners rejected by the government program get other modifications crafted by their mortgage servicer, the Treasury Department says.

These modifications typically do not provide as much help to homeowners. They are less likely to reduce interest rates and to defer principal to the end of the loan. Almost 20 percent of the proprietary modifications from October 2009 through March 2010 actually increased monthly payments, according to ProPublica's analysis of data from Office of the Comptroller of the Currency.

The Brames say they have taken steps to ensure they will not fall behind again. During the modification process they cobbled together work -- cleaning out gutters, working for the Census, selling Rachel's art. And eventually, after more than 100 applications, Roderic landed a new job as an assistant professor at the University of South Florida Polytechnic. He started classes last month.

ProPublica's Paul Kiel and Olga Pierce contributed to this story.

Have you received a permanent modification? Please use the comment section below to share your tips with other homeowners.

best of luck to this family. good on them, that they got the mod.
is it just a fluke, in truth? is there any way to know what ‘magic’ button to push to un-stick the Willy Wonka machine?
just asking….

Michele Deady-Paano

Sep. 8, 2010, 11:03 a.m.

We got a permanent loan modification after 10 months of paperwork with Wells Fargo.  We didn’t even have to go through a “temporary” modification.  Wells Fargo basically just re-financed our current balance at a much lower interest (4.85% vs 6.25%), which brought our payments down a little over $700 (from $3860 to $3208).  Because we made our regular mortgage payments the entire time we were applying, we did not have to go through a “temporary” modification program.  It was a long and drawn out procedure; lots of faxing of documents over and over again, but we made it.  I think the fact that we continued making our regular mortgage payments (although it was a stretch), we got the permanent modification with no “temporary” deal.  Wells Fargo told us that the reason we didn’t have to do a “temporary” modification was because they felt that we were not a risk since we continued to make the higher payments the entire time we were applying for the modification.  Something said for keeping up, I guess.

Still waiting on word on if my original request for a modification through Wells Fargo will go through.  It’s been just over 2 years since I was laid off and called to start the process.  I found work again shortly after the wake up call and have been in constant contact with them.  I only wish there were programs in place in the early months to help me get farther ahead than I am.

I FedEx’d them a huge packet again last week and am still holding my breath that things will work out.  I made 6 months of trial payments and am currently scraping together full payments per their requirement.  The full payments came after making my last forbearance payment.  In a slight of hand on the part of Wells Fargo, they moved my forbearance payment to the 30th of the month and immediately back to the 1st upon final payment.  I was immediately behind due to them requiring a modified payment on July 30th and then a full payment on August 1st.

They have sent me intent to foreclose paperwork three times.  One dated the day after my trial payments started and two dated exactly one week later.  Each time the amount I owed to get current doubled.  I have requested the accounting practice that has lead to that number and hope to get an answer soon.  I have had a drive-by occupancy check performed and was told to be ready for an in-home appraisal in the near future.  From the sound of it I’m being held at arms length until a complete foreclosure can be processed. 

Needless to say I’m not very optimistic about it working in my favor but I’m only 2 months behind currently, one month due to the trial mod, and the second due to them changing the due dates.  Both I believe to be refutable with mediation which is allowed in my state.  I will be pursuing this to the letter of the law if I am forclosed upon for making every payment that I was asked to make up to, during, and after the modification trial period. 

Thanks to investigative reporting like this everyone in the banking industry is put under a microscope to their dealings with customers.

Flew from Denver to D.C. using miles to attend a NACA event in which I spent 4 hours with a Wells Fargo negotiator and, at the end, was offered 40 year 2%. After I returned from the event, the investor, Goldman Sachs denied the solution and so WF is now offering a destined to fail 5 month forbearance with lower payments and then a 6 month payment of over $20,000 which is something we will never be able to handle. So much for the great hope the negotiator in DC provided us. I’ve given up and am just waiting for the Sheriff now…

I spent over a year fighting Wells Fargo—re-sent the paperwork multiple times.  Was given a forbearance, a trial, then they told me that I had always been ineligible… 

I signed up with NACA, and Wells refused their solution.  NACA escalated my case, and while we were waiting for a response,  I attended a NACA event. 

The Wells rep there couldn’t have been more helpful.  My paperwork was in the system already, and I was approved for a loan modification at 3%, no reduction in loan balance.  My payment has been reduced by $400.  I am very grateful to the work that NACA did on my behalf.

With Wells Fargo, I found that you have to constantly resend paperwork.  You should call on a weekly basis, especially after you send the paperwork just to check to make sure they got it.  I was told on many occasions that I had not gotten the modification, but I kept sending in paperwork and wouldn’t take “no” for an answer.  As you can see from my comment above, it took us about 10 months, but we finally got Wells Fargo to do something….as mentioned, they merely refinanced our current balance at a lower interest rate, which saves us about $700/month.  It wasn’t much, but it was exactly what was needed.  Our payment date was not changed, and we’ve kept up the entire time on the old amount AND on the new payment amount.  Of course, I’ll be about 94 when this mortgage is paid off and, hopefully, I’ll be alive to burn the damn thing.  I may stay alive JUST TO DO THAT if for no other reason!!!  Everyone dealing with Wells Fargo, don’t take “no” for an answer, keep sending the documents in each time they ask, and CALL THEM WEEKLY to check on the situation.  Eventually, they get tired of hearing from you (hopefully) and do something.

Well after several years start to finish I do have a permanent modification and I don’t have a permanent modification.  I have an offer for one but no one can explain the figures to me, no accounting and no way to tell if all my payments are accounted for.  Also I’m confused about the insurance issue.  Up until last December I had been paying taxes and insurance myself.  Then they (Bk of America) stepped in ahead of me and paid the taxes but I kept paying the insurance.  During the trial my payment was about a $100 lower but I was paying the insurance myself and I’m not sure if the numbers work out right or what the requirements are as to percentage of income and what it includes, etc. 

First of all, my loan is fairly small I guess, compared to the numbers I’ve seen bounced around here because some people are getting $700 off their payment but if I got that much I wouldn’t have to pay anything.  My house is probably, right now, worth about $80,000.  Its a 3 bedroom ranch built in 1967 with a full basement and about 900 square feet not counting the basement.  Its a modest home but I’ve put a lot of work into it as it was pretty dismal when I got it.  Probably the most noticeable improvement to whoever passes by is that the landscaping is really nice, I did it myself, over the years.  The way it was there was nothing growing except weeds.  Now I get all sorts of compliments on it.  I renovated the bathroom, took up the carpet and have the hardwood floors that were underneath.  The biggest cost overall was probably replacing all the windows as they were in bad shape.  I was working at the time but since then I’m on permanent disability with a lot less income.  So my payment used to be $603.84 and that was with me making the insurance and taxes paid.  Since the temporary modification my payment went down to $518, they paid the taxes and I paid the insurance.  Now the proposal I have is for payments starting out at something like $605 a month but hopefully that includes the taxes and insurance but I can’t get a definite answer.  Its not down that much and it would still be tough but I could do it.  But the payment will go up gradually every 5 years I think it is due to interest increases.  The interest starts out around 2.75 percent and it had been 7.75 so thats a lot lower interest.  Not including the payment going up due to interest adjustments then I will be making about the same amount payment but it will include the insurance and taxes which roughly ran about $160 or so and based on that I guess thats roughly the difference then if my payment is the same but I’m not having to come up with those two sums I guess, its a little hard to figure for sure because of the differences over what comprises my payment.  At the end it will only be about $100 a month cheaper because of interest rate going up and then of course if my taxes go up much at all I’d be right back where I was.  And I can’t get anyone to account for where my payments I made during the trial modification went to or if they were even applied.  And then theres the mysterious almost $3,000 lump sum to be added at the end of my loan but then somebody I talked with said that I won’t have a lump sum payment at the end because thats where some of my payments after the trial went to but I have no verification of that, its just their word and if I sign this the way it is then it says I do owe the $3,000.  The lady I talked to said “trust me” we are going to finalize it all afterward and you won’t owe it but forgive me if I don’t feel really trusting of what they are saying.  She said, oh lots of people its the same way and if we didn’t fix it right for you and them there’d be a lot of people mad at us and I said I hate to break it to you but there are already a lot of people mad at you and they have no luck getting answers nor have I.  So if I sign this and you basically screw me over its your word against mine.  She didn’t have an answer but she said its because there is only one form for the permanent modification and its mostly set up for people who haven’t been paying all along like I have and that since I have I won’t owe that sum but its a lot of ifs and ands and no straight answer.  I’m suppose to sign tomorrow but I really can’t decide what to do.  Straight answers and a list of what the balance was before, what it is now, etc. would help but straight answers from BOA are hard to come by.

Has anyone here who has gotten a permanent modification ended up with a lump sum payment due at the end and if so why?  Did they tell you it was for payments you missed?  Because if I didn’t miss payments an i end up with a lump sum due and someone who didn’t pay ends up the same way then that doesn’t sound quite right but there’s the “trust me” thing that I won’t have to.  My balance was $68,000 something when I started the trial modification and so I want to know what it is now because the way it states in the permanent modification its like $72,000 something because of the taxes they paid and the months when I was on forebearance but then one month I made two payments because of them giving me conflicting information so I want to be sure thats accounted for to.

It would all be SO EASY if I could just talk to someone, why is it so damn hard just to get an intelligent person on the line who speaks English without double-talk and who doesn’t need to transfer me to somebody else?

Congratulations to Roderic and Rachel Brame!!

As for me, my wife, and my 2 children, we are still sitting on a rejection letter from CHASE, for reasons even they have admitted are grossly inaccurate….and trying to figure out how to handle the latest written request from CHASE… a request for a DEATH CERTIFICATE!  (No one here has died… I’m quite sure that both my wife and I are very much alive!)

Has anyone else been asked to provide their DEATH CERTIFICATE?

(No, I’m not kidding.  I would be glad to provide the letter from CHASE.. and would be thrilled if it were posted here on the PROPUBLICA site.)

Please see my entire CHASE saga on previous posts.

It would really help if I could talk to somebody like at Hope Now who I talked to once at the beginning to help me figure this out but when I call they say their first appointment is over a month away and so thats no help at all.

So thats why I’m not all excited about my permanent modification.  There is no principal forgiveness and thats what people don’t understand.  Lots of people will give you feedback that you’re a deadbeat and they consider themselves paying part of my mortgage but that isn’t the way it is, I’m still paying every penny just lower interest rate which I could have gotten on my own if the bottom didn’t fall out of my house value which I used to have about $40,000 equity in.

My permanent mod came after being in a trial for over 12 months with Bank of America. I did use an attorney office in Chicago and they were finally sucessful. I was in an interest only for the past 4 years with a piti payment of $3064. My final new payment is $2453 for 34 years (??) weird number of years. Big picture, $600 less AND $724 toward my principal that I was not paying toward at all for the last 4 years. And I was able to settle or dump my second with boa for 10 cents on the dollar so I have equity again. It was over 117k at one point. I closed on new construction in May of 2006, pretty much the peak of the market, so have faith it does seem to work once in a while.

Bruce -  You don’t have to just wait for the sheriff if you really want to keep your home.

There are programs available that claim to allow you to stay in your home and get lower payments. They’re not all scams. 

Do a Google search for “underwater mortgage relief” or “underwater mortgage debt” and you’ll see at least one that requires a 50% debt-to-income ratio and another that claims that you can get about a 50% reduction in monthly payments. I’m sure that there are others. But don’t give up.

I started applying Nov. 2009;  World Savings changed to Wachovia to Wells Fargo.  I attended a special workshop in Oakland in April & the guy put “Expidite” on my application after looking at the 4 pounds of documents in my brief case.
I was given the name of a contact in a local branch and I’ve called her every week since.  It’s now Sept.9.  I saw what looked like an appraiser outside my home and have been told my app. is in underwriting.  One person on the phone said “They think you’re hiding money.’  I answered, “I’m hiding it so well, I can’t find it.”
If it weren’t for generous family & friends I might have lost my home by now.  I’m tired & stressed and don’t have enough for the utilities this month, but I’m still here!
There’s a huge transfer of wealth going on - I heard recently that REOs are no longer being sold singly, but in packets of up to 100 homes to major investors.  One of my friends has declared bankruptcy and has not paid her mortgage for 8 months.  Another has walked away, but his rent is nearly the same monthly amount as his mortgage had been.

I’ve just about had it now.  I just talked with Delia at Bank of America who I have talked to off and on for a week or so.  She was to get me answers about my payments and this proposed modification.  She called to verify I would sign the mod tomorrow I said I can’t until I understand it and I get the information I asked for and she said then send the papers back with a note about why you won’t sign but she said the last time this happened he got immediate foreclosure papers.  This is arm-twisting and abuse when you can’t reach them, can’t find anyone who will give you answers but if you don’t sign a document that has false information then out you go.

Attention – all Wells Fargo victims who reside in Texas.  I just received the awaited response from Mr. Greg Abbott, Attorney General.  I sent him my complaint well aware of the fact that he does not handle individual cases, but I will quote him and please pay attention to the word systemically:

“In matters of statewide significance, or when substantive evidence indicates that a person or business in systemically violating Texas law, the Attorney General can take action on behalf of the collective legal interests of the people of this state”

I encourage everyone to download his formulary and send it to him by certified mail.  He needs to hear from enough people before taking any action against Wells Fargo.  YOU definitely WANT to print the article published in “New York Jumps Ahead of Feds With Law Holding Mortgage Companies Accountable on Mods” and send it with your complaint with a little post-it-note request to read.

Make sure you carbon copy the Texas Department of Savings and Mortgage Lending but do not forget to include the article just mentioned.  They believe that because of the nature of the bank, it is not their jurisdiction.  However, with many people sending the article it just may help them to find another way.  You have nothing to lose because even if they still feel that it is out of their jurisdiction, they will refer your case to the OCC.  Be precise, concise and professional.  Their mailing address is: 2601 North Lamar, Suite 201, Austin Texas

you can ask the bank for a reconcillation of payments. they are required to provide this if you request it

Thank you, that term “reconciliation of payments” sounds better than i want a rundown on all my blah blah with my blah blah and all that in mind.  Reconciliation of payments could deceive them into thinking that I havent already lost what little senses I had left from previous run-ins.

You know sometimes there is this concise TERM/WORD and its right on the tip of your tongue and then ZAP its gone.

Thanks for giving me a wakeup call, I’ll add your suggestion to my to-do list.

I have been HAMPED.

took over 18 months from missing 1st payment.

new terms:
40 years
2% first 5 then to 4.75 year 8
125K deffered no interest.
all missed payments are in the deffered amount

old payment was 4300 interest only
new payment 2400 PITI for the 1st 5 years.

the deffered amount is due upon sale or after 40 years.

the home is severly under water paid 850K now is worth 500K

so, we are in home owner prison till the home comes back to at least 650K…...

So I am happy not to be evicted..It is likely I will never overcome the loss in the value of this property in my lifetime.

trb,  that’s a sizable difference monetarily for you.  Was the term extended from 30 years?  Quite a monthly savings for you but of course 40 years is a long time.  Anyway, congrats.

A few days before my trial mod would become permanent and after a 17-month process, my permanent mod rejected even though I kept every single condition.  I subsequently received a call asking me to start sending my financials every six months indefinitely, for a different modification.  Then a letter of rejection came in announcing the “other” modification.  I sent a letter and I wrote the following in one of the paragraphs:

“If there truly is an ongoing process leading to a modification, I need to have proper and lawful disclosure.  I need to know what my rights are and what not.  I need to know the terms, conditions, interest rate, requirements to qualify, and the name and telephone number or extension of the loan processor and the underwriter.  If I do not have the right to know, I need you to fully disclose and properly explain why not”.

I got my answer!!! And in reference to the above paragraph it says: “Any documents or requested information not provided in this letter is due to the request being too broad to determine specific information needed, or are considered to be proprietary information of Wells Fargo Home Mortgage and will not be provided at this time without a subpoena”

Of course the same agencies I am recommending you to complain to, will be hearing from me regarding this matter as well.

Thought this should be required reading for all.

If you receive a forebearance from Wells Fargo that halves your mortgage payment for six months with a lump sum at the seventh month due, BEWARE.

I added up the numbers and the lump sum was the past six months missing payments, the full monthly mortgage payment PLUS interest and charges equal to a full monthly Mortgage payment, a 33% interest short term loan.

Say your mortgage is $2000 a month, Wells Fargo offers $1000 mortgage payment for six months, at the Seventh month, you have the lump sum due of $10,000 per the conditions of accepting the forebearance you signed.  What the $10,000 lump sum consists is $6000 from the past due lower mortgage payments for six months, $2000 for the seventh month normal full mortgage payment, and an additional $2000 in charges and interest, total $10,000.

Most people do NOT add up the lumpsum numbers of the forebearance and the banks like that. There is no disclosure sent with the offer that discloses that the interest is 33% for the forebearance offer. The banks hide the interest as expenses and charges for the forebearance.

We had a PITI of $2644.25 and the half payment of the forebearance was $1322.13. Hard to figure out the cost of the forebearance agreement with no disclosure until I broke down the lump sum of $13,221.28.

A HAMP bank Underwriter in another blog says DO NOT fall for the lower forebearance or Trial payments as it will put you at greater risk of losing your home and flag you with banks if you want to borrow in the future at a lower interest rate. It puts you in the banks doghouse for at least 12 months and prevents you from refiancing your loan if the market recovers.

You can still complete the HAMP application, but do it with full mortgage payments. Don’t send in lower payments.
Of course, the people, who do not want to be recorded, lie to you telling you that you do not qualify for HAMP unless you miss a mortgage payment. This enables shortsales and foreclosures process where the banks make more money, thanks to the taxpayer supported FDIC.

DO NOT TRUST the banks.

I thought I would share this article with you.

Making Sense Of The Mortgage Crisis-How The FDIC Loss Share Program Is Hurting Homeowners

The video explains exactly what happened (in a “real-life” transaction) with one of my clients that I represented on a short sale in September/2009.  The numbers are the actual numbers that I used to remind OneWest of the profits they stood to make from the FDIC loss share program.  When faced with these numbers, they immediately gave up on their demand for a $75,000 promissory note from my client, and approved the short sale.  Since writing this FDIC OneWest IndyMac blog in September/2009, I know of at least a dozen other agents across the country that have used this same argument with OneWest Bank, and were successful in closing their short sale deals.

The point of this video is not to bash OneWest Bank.  What I hope and pray is that someone in Washington will see it and actually decide that “enough is enough”.

This article is part of an ongoing investigation:
Foreclosure Crisis

Foreclosure Crisis: Banks and Government Fail Homeowners

Banks and the government have fallen short in helping homeowners in danger of foreclosure.

The Story So Far

Systemic failures at the country’s banks and mortgage servicers have exacerbated the most severe foreclosure crisis since the Great Depression, and government efforts to limit the damage have fallen short. ProPublica created an unrivaled database of homeowners who have faced foreclosure, opened a Facebook page to encourage homeowners to share their stories, wrote profiles of some of them, and incorporated their experiences into our reporting. We also provided a comprehensive rundown of the numbers behind the crisis.

More »

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