I attended a Huffington Post Mortgage Madness Meetup in Los Angeles last night, which suffered from some late planning, the buggy nature of the Meetup tool and the general difficulty of self-organizing. Only a half-dozen people showed, and most of them were either media (a guy from NPR’s Marketplace) or interested observers in the foreclosure mess. In fact, the one homeowner with a story to tell arrived late and almost didn’t make it because he went to the wrong location initially. But oh, what a story he had to tell. And while I’ve heard a lot of these HAMP horror stories in the past year, I’ve never heard anything like this.

Jeremy Fletcher is a swimming pool builder from Northridge, California. His business jumped along with the inflation of the housing bubble, as people bought new homes and made improvements. He made enough money in those years to purchase a $900,000 home for him, his wife and two kids in late 2007. “Ironically, the reason I was doing so well ended up tied to the same thing that got me in this mess,” Fletcher, a surfer and former musician who lived with the Lovin’ Spoonful growing up, told the group.

As the bubble popped, his business tanked. He went from $250,000 in sales in 2007 to $40,000 in 2008. By early 2009, “I was totally broke,” paying for his $4,200 mortgage out of savings and barely hanging on.

He called his servicer, Citi Mortgage, early in 2009, when HAMP was announced, to see if he could get help. “I thought I was being responsible, looking forward before I got into trouble,” he said. The servicer didn’t see it that way. Citi told him they wouldn’t help because he hadn’t missed a payment and showed no sign of default.

Months later, in June 2009, right when he was thinking about selling the home and downsizing into a more affordable residence, Citi called him unprompted. “They said ‘we see you asked about HAMP, and we’re giving you a trial modification today.” The terms, a 2% interest rate for five years, would dramatically lower his monthly payment, from $4,200 to $2,170. They signed him up over the phone, he made his first payment by ATM card, and that was it. Within a few days, they sent over a modification package that put it in writing: if Fletcher made his trial payments for 90 days, and sent in his application with a full income statement that qualified, “we will give you a permanent modification.”

Fletcher sent in the application; he made his payments; he waited the 90 days. When he heard nothing the fourth month, he called and was told by Citi that they were backed up but everything was fine, and to continue to make the trial payments. This went on for a full year, always being told (by a different rep from Citi every time) he was fine and the permanent mod was a matter of time.

In June 2010, he made his payment, and got a call 10 minutes later from the collections department, telling him that he was 12 months due on his loan and owed $15,000. “I said, what are you talking about, I’m in a modification!” They transferred him to another department, which told him he was dropped from the modification. Citi couldn’t tell Fletcher why he was dropped (a violation of the HAMP program), just that he was delinquent and needed to pay within 30 days, or lose his home.

Fletcher gave up on Citi and started calling attorneys, who told him he needed a $4,000 retainer to take the case. “I’m broke, why do you think I want a modification,” he’d tell them. Finally, he found a lawyer acquaintance who heard the story and said that it sounds like a piece of cake and he’d work on it for free. The lawyer sent a letter to Citi Mortgage demanding to know why Fletcher was dropped from the modification process.

A few weeks later, Fletcher got a call from someone at Citi, who started the conversation with, “All right, now you have an attorney, you’re on my desk, what do you want?” This was some sort of specialist who disposed of cases where the borrower got legal help. Fletcher explained his situation, tells the story, and the specialist said Citi would open a review. “He said there was no reason to drop me, that I just got lost in the cracks,” according to Fletcher.

In July 2010, the specialist calls back, said the mistake can be fixed and the permanent modification applied. He just wanted the income statement re-documented, another laborious need to turn in paperwork. But with that done, Fletcher was told that his application was confirmed and the modification would go through within a week.

Two days later, he found out the loan had been sold and was now being serviced by Saxon Mortgage.

“It seemed like we had cornered Citi, got them to the point where they had to modify, and they just up and sold the loan,” Fletcher said. He could never find that specialist again, or anyone at Citi willing to discuss the loan at all. They told him to take it up with Saxon. And Saxon immediately wants all the delinquent payments. The calls and letters started coming every day. He pleaded his case, but got nowhere with Saxon.

Finally, one lady at Saxon says she can see the history of the now-16-month modification process in her computer. “She says, ‘my mistake,’ and tells me everything’s fine and I can make the modified payment. I’m thinking I don’t trust this at all.”

Sure enough, within a couple months, Saxon told Fletcher he was dropped from their modification as well. This whole time, Fletcher had made modification payments. By February 2011, Saxon told him they wouldn’t accept the payments anymore. They said they would file a notice of default on February 26, the first step to an eviction.

Fletcher went to a legal aid foundation and told them the story, and they wouldn’t take his case. Not because he didn’t have one – they told him the case sounded amazing and was something they wanted to test in state court. But they said they couldn’t justify helping someone who still had an income. Fletcher still works building swimming pools, although his business is still haphazard. The home, bought for $900,000, is now worth about $500,000. “But I’m not homeless with two kids and nowhere to go, so they wouldn’t help me,” he said. He keeps looking for pro bono help, and has talked to over 150 lawyers.

“This eats at me every waking moment of every day,” Fletcher continued. “The kids wake up every day wondering if they’ll have to leave. I think about it when I’m working, when I’m not working I’m on the computer, writing letters, making phone calls. Even when I’m surfing, that was my one respite, now when I’m in the water, I start thinking about it.”

The subsequent hit to his credit rating because of the delinquency almost destroyed his business. His contractor bond could not be renewed because of the credit history. When he finally found an insurer to renew, they charged him 6 times what he had paid before. He probably couldn’t even find a rental unit at this point, given the credit history, which is a big obstacle to the possibility of so-called “strategic defaults”.

Fletcher says that HAMP had a lot to do with this problem. “I was thinking, if we didn’t get the help from Citi, we could sell the house, we still had savings, a good credit history. We had options.” But after the HAMP nightmare, his savings account was drained, his credit history shot, his home value plummeted, and his hope faded. “It’s in the waiting for the modification that everything got bad,” he said.

Fletcher continues to fight this, but his options are dwindling. A field contractor for Saxon was poking around his house last week, looking at the property (probably to determine whether or not it was vacant). “I told a lady at Saxon yesterday, do you really want to take my house? Because you’ll take a loss on it.” As we know, the servicer will profit from the foreclosure, although the investors and the overall economy will take a hit.

There are a million stories like this (perhaps two million in the next year, according to Joseph Stiglitz), but like snowflakes, all are different. This one is a particularly grim snowflake. I couldn’t help but notice this guy’s demeanor – still chuckling about this, still trying to come up with every angle to save his home. He did everything right – he worked hard, he saw trouble coming, and he sought the appropriate avenues for help. In another time, it would have been a no-brainer for him to either get the help he needed or the certainty he needed to explore other options. Instead, Jeremy Fletcher got HAMP – and his life suffered for it.

I’m making it my new mission in life to help this guy, so stay tuned for updates.

Part I of this series, Part II, Part III, Part IV, Part V, Part VI, Part VII, Part VIII, Part IX, Part X.