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.




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They key and critical questions in this case :
Why would Saxon buy a mortgage already in default (according to Citi)? How and where did they assign the note? Where was the note previously?
The answers to those questions would reveal quite a bit, I imagine.
I understand how Mr. Fletcher feels…I have been in and out of land court and am now in Superior Court over the false documentation, lies, intimidation etc of these ‘prentender lenders.’ And I agree with the person in the first post…why on earth would Saxon purchase a defaulted mortgage…very sketchy and just more of the same deceit. Nothing will change until our government STOPS bending over for the lobbyists and the ‘too big to fail banks.’
David, my husband and I have a small business tied to the housing industry and our experience Chase is similar to that of Jeremy Fletcher, except we had to file Chapter 13 to prevent our home from being sold, and we waited as long as we could before authorizing our bankruptcy attorney to push the button and file–and this was even (7) minutes before the time scheduled for the sale of our house. Then, two (2) minutes after the button was pushed to file the BK, that means five (5) minutes before our home is scheduled for the foreclose sale, the foreclosing law-mill firm called us to say “the foreclosure sale is being postponed.” The following afternoon, a Chase representative called us to say “the foreclosure sale is postponed and you have been APPROVED for a loan modification. We received final HAMP Loan Modification Agreements in late October 2010, which were signed, notarized where indicated by the lender and returned before the due date (November 2, 2010), and included at Chase’s suggestion an “Additional (extra) Optional Trial Payment” to earn the “full government incentives” and a signed ACH Agreement Form, authorizing Chase to deduct the “new modified mortgage” amount from our checking account (this HAMP Loan Modification was effective December 1, 2010).
Because my husband and I believed this HAMP Loan Modification was finalized, we decided not to go through with the BK filing and allowed it to become “dismissed” in mid-November 2010. Please keep in mind we the BK only to keep our home from the foreclosure sale. Our BK attorney told us we could either not submit documents to the court by the deadline and then the court will deem the BK filing to be “dismissed” or pay the BK law firm to “officially” dismiss the filing–either way on our credit report it will show “dimissed” for at least 7 years. Also, our BK law firm told us ” you’re not alone–the vast majority (95%) of our clients are owners of small business just like you.” I know this lawyer was trying to make us feel better but we actually felt worse because we understood this to mean it will take a much longer time for our ecomony to turn around than we originally thought it would take.
Since Chase received our signed copies of final HAMP Loan Modification Agreements (November 2, 2010), this loan modification is still not finalized, and we have been going back and forth with Chase since then. On December 7, 2010 a Chase rep told us this modification was cancelled due to it not having investor (Freddie Mac) approval. I asked the rep if Freddie Mac never initially approved the this modification OR if Freddie Mac “dis-approved” this loan modification after it “was approve.” The Chase rep replied “I cannot tell this from the notes in my computer.” So I immediately contacted an agent who handles “escalations for Freddi Mac loans” at the HAMP Solution Center (Texas), told him what Chase told me and a week later he confirm Freddie Mac “APPROVED” the modification. I immediately notify Chase about this and was told I will be getting a new “relationship Manager within 24-48 hours and our loan modification had to be “re-set.” When I called our new Chase relationship manager, I heard a recorded message that said “Welcome to EMC Mortgage Corporation.” I asked the relationship manager “who is EMC Mortgage Corporation?” and she replied “now we are Chase.” I recently learned the FTC ordered EMC to pay $28 million to homeowners in Texas for fraudulent mortgage servicing practices. This relationship manager told me to pay the “new modified loan amount in January but refused to put these instructions in writing and also told me I will not be getting a signed copy of the HAMP Loan Modification Agreement from the lender (even though this is what is stated in the actual agreement we signed–one of the listed “Acknowledgement and Preconditions to Modification” in actually read”I understand that the Loan Documents will not be modified unless and until I receive from the Lender a copy of this Agreement signed by the Lender.” And, this is why we continued to pay the original “trial payment” amount instead of the new modified loan amount, especially since Chase refused each and every time to submit their verbal instructions to us in writing, and we were afraid if we did as we were verbally instructed Chase would immediately begin to foreclose again, especially since our loan is still in the “loss mitigation/foreclosure department.”
We have filed official complaints with the OCC, our state AG’s office, our state’s Agency for Consumer Protection–all we’ve gotten so far is a form letter acknowledging our complaint, except from our AG for which we have not yet heard a peep from who must be spending most of his time and authority on the law suit against ObamaCare. Speaking of healthcare, we had to drop our healthcare policy because we can no longer afford it–our monythly premium has increased from $650 per month to $1,097 per month between 2006 – 2010) and our combined annual gross salary for 2010 was drastically reduced from $100K to $40K ($30K net).
We just received a new set of “final HAMP Loan Modification Agreement documents, which DOES NOT require the signature of a certified Notary Public (the first Agreement did), it DOES NOT mention the the extra amount added to the principal of our loan or “capitalization” (the first Agreement did), and one set of includes 6 additional pages dealing with proof of insurance requiring our signature (the first Agreement had the same number of identical pages). I have called our new Chase relationship manager–the 3rd one assigned to our loan since returning our first signed and notarized Agreement (November 1, 2010) to ask if an “administrative oversight” was made by Chase when it sent us these Agreements, but I cannot get this relationship manager to return my phone call. I’ve left numerous voice-mail messages for the past week and the deadline for us to return this HAMP Loan Modification Agreement is next week.
Just F.Y.I. only — One interesting clause borrowers agree to when signing this HAMP Loan Modification Agreement is the following statement under the headline “Additional Agreements”:
In cases where the loan has been registered with MRES who has only legal title to the interests granted by the borrower in the mortage and who is acting solely as nominee for Lender and Lender’s successors and assigns, MERS has the right to exercise any or all of those interests, including, butnot limited to, the right to foreclose and sell the Property; and to take any action required of Lender including, but not limited to, releasing and cancelling the mortgage loan.”
Now, if we don’t agree to this clause, then Chase will not grant us this HAMP Loan Modification. As borrowers, how can we ensure that we’ll have a “clean” title? P.S. Chase continues to report us to credit bureaus as delinquent despite us making on-time trial payments since February 2010.
Looking forward to your updates, David.
As a way of getting this guy help, have you thought about contacting Robert Riech to see if he knows any bucks-up lawyers who just might like to stick it to Saxon, Citi, Hamp, etc? (Or maybe John Dean’s firm?)
I’m not a technie so I couldn’t begin to attempt it, but I wonder if there is any way to develop an “All Hamp Horror Stories All The Time” YouTube channel so that the massive number of these stories could eventually force the MSM and Congress to pay attention?
Chase is the most godawful bank in the history of the world. If you can get away from them, do it.
IF anybody can help it’s this site:
Credit Boards
Yeah, they sure never mention it, do they?
I watched Bush sign the “no-bankruptcy bill” in 2005 and I ran to file before I couldn’t.
Now we see why that bill was so important to the transpiring attack on the middle class and poor in this brave new world.
If I;d gotten into the kind of credit trouble I was in now, I’d lose everything…which isn’t much, but at least I have a leaky roof over my head instead of a tent
Obama: working to make Reagan right.
Can’t blame the blue dogs or the senate for HAMP. the President had total control over the program.
HuffPost is now AOL – so did AOL become an outlet for humanist liberal news and discussion, or does HuffPost become a news commentary site for AP conservative slant stories?
In any case, I am glad in these last days of HuffPo indie work they put out this good history and discussion.
Follow the money.
Just try to post anything with the words “new world order” on there……….
Ariana is a sell out…. no?
I was going to read the link but anything hufpo is a strict no no. Talk about the scummy underbelly with a slick veneer, America the beautiful
I was close to a person – my boss – who was BFF with Reagan – dinner most Thursdays at the WH.
I posted comments on facts I knew to be true – and indeed I stayed with public facts – about Reagan and his screwing of the Mentally ill.
It took 2 hours for the moderators to approve the post.
No post that discusses Morning Joe – on MSNBC – Joe Scarborough – and the killing in his office – his locked office – of Lori Klausutis will be posted at HuffPo (a 28-year-old office worker for Rep. Joe Scarborough (R-Fl), who was found dead in the congressman’s district office. Police said preliminary findings from the medical examiner’s office showed no foul play or any outward indication of suicide. The local ME was honest – so he was not used by the DA friend of wealthy Scarborough family and an unlicensed, disgraced ME was flown into the state to declare over the weekend that he saw nothing on the body, with body being disposed of immediately).
Indeed any post where Lori Klausutis is named is banned, and any post with Joe’s name can not include the word “intern”.
My Greek Friend sold out her liberal ideals as she reverts to her families traditional “rich folks” attitudes.
I like cartoons with bears better. This one is too on the nose tedious for my liking. Not that I have to. Just my one little tiny rant here. The info is there, though. To be sure.
I’ve heard nothing but horror stories about HAMP. It sounds as if it’s a scam from the get-go, intended to ruin the lives of anyone seeking a loan modification.
Has anyone heard of a single GOOD result from HAMP?
hey David Dayen –
went googling for something of a landmark California decision from late summer (was looking for the plantiff attorney’s name) believe it was MERS related
but I found this – big deal Appellate Decision Ruling – from late January
here are 2 links to the ruling – forgive me if The News Desk already covered this – if not, certainly something for Mr Fletcher to be aware of – though it probably came up at the Meet Up
synopsis
Plantiff’s Publication
and here is Plantiff’s representation: LoanSafe.org – a for profit NACA ??
that video should get a 2008 Pulitzer, with interest
I can’t read the whole series I want to finish Wendell Potter’s book who’ll be here Sunday — I know slightly different, but only slightly
I have a lawyer in CA who might help. Send me contact information dh (at) synoia.com.
Mr. Obama, Harry Reid and Nancy Pelosi ought to making helping this guy their life’s work, along with the lives of a hundred million other Americans. Unlike dday, it’s why they were elected and what they get paid to do.
Tragedies like this demonstrate the moral and policy bankruptcy of the current leadership. The system seems unable to hold these banks accountable for their commitments, their promises, their failure to correct their own massive, intentional errors and miscommunication. But TPTB will still claim it is the moral hazards from this debtor’s behavior that threaten America like a Communist ghost.
Imagine a Congresscritter putting up with such service not from Citi but from a server at an expense account rated restaurant in Metro DC. Imagine a top congressional staffer continuing to work with a mega-industry lobbyist who kept promising campaign cash and fundraising events for a year, only to find that the lobbying account had been sold three times and no one even knew anymore what was promised in time to make good on it before election time. Heads would roll, non?
Outcomes like this – and countless similar stories – were entirely predictable when Team Obama chose to make loan modification programs like HAMP voluntary. It’s like asking a mega-corporation to pretty please follow the law or to pay higher taxes. That these loan modification problems and their economic and societal ripple effects would seriously negatively affect the overall economy – and not just individual lives of people not smart enough to be beltway lobbyists – was equally predictable.
Given such predictability, which not even Condi Rice could disown with a straight face, it seems as if such outcomes are a feature, not a bug for this president’s economic and re-election team.
look, this is not about HAMPS. I’ve been saying this for years. There are a multitude of stories just like his, where they play tricks with your balance. It’s illegal, it’s stealing. They do it with your escrow account, taxes, foreclosures and anything where fees can be assessed is the best. They just put some ungodly balance on your loan, that you cannot pay. They know you can’t pay it, and then you have joined the ranks of the UNBELIEVED. DISCREDITED. Then no one believes you, you have no where to go and your only hope is to prove that the balance is invalid. But you can’t do that, because any measure of fees for what ever reason they want…is legal.
Cram down was the only way to uncover this fact. It happened before happen and it is why most folks ended up in a nightmare and lost their homes. It pads the profits of the mortgage companies with these bogus balances. Do you not see this..??
It’s the same behavior that happened before…now they use Hamps as another means to give you a bogus balance.
God helps us…if we could just get THIS part of the story out. I have been shouting it. The balances are bogus. The balances are bogus. The balances are bogus.
All they needs is a “reason” to assign fees…taxes, escrow, refinance, hamps…anything.
The balances are bogus.
Every large class action lawsuit that has dealt with “The Balances Are Bogus” has been side lined. The one that was emerging against GMAC went down because they filed bankruptcy. No lawyer can work for free and the bankruptcy meant no compensations…since they said they had no money. So here we are again…The class action lawsuit…is dead…the courts are stacked and the lawyers for these companies have a host of tricks up their sleeves. The part of the story: THE BALANCES ARE BOGUS…never makes it to the light of day.
If you want to fight an illegal foreclosure, or deceptive and denied loan modification, involving JPMorgan Chase a useful source of information is found below:
http://wgroup.ning.com/
Membership is free.