OM freakin' G! They Said "NO"

Since March 15, 2009, I have been trying to get Wachovia Mortgage to talk to me about modifying my mortgage loan. The inspiration for starting this blog came when I was notified that my job would end on February 28, 2009, and I knew I would have to shift into high gear to prevent total financial ruin, a prospect that was quickly coming into focus.

Around the same time, President Obama announced the Make Home Affordable program, an initiative designed to get banks to work with customers who become unable to make their mortgage payments due to the loss of income. Since I met all the criteria for that program, I relaxed a bit and began a 11-month long exercise in hoop jumping, a game that the banks have invented to avoid doing what the program was designed to do. Although I had never yet missed a payment nor was I ever late, I thought I would head off disaster by getting myself into the loan modification queue.

As the weeks and months ticked by, the bank proceeded to slip three or four deadlines, lose two different sets of documentation, and set up an internal process that prevented me from developing any kind of a relationship with any one human being. At one point, they offered something called a Forbearance Agreement, a temporary modification that allowed me to reduce my monthly payment by about $400 for the next consecutive three months. At the end of the three-month period, there would be a balloon payment that would collect all the outstanding amounts deferred during the agreement! Big help. But, even worse, what wasn't made clear during discussions, and what was hidden in esoteric language in the conveyance letter for the agreement, is the fact that this so-called agreement would result in negative reports to the credit bureaus. So the bottom line was this: the only help involved in the forbearance agreement was that Wachovia Mortgage would not call and harass me about the missing payments!

When I realized what was happening, I immediately returned to making full payments. I knew that at some point in the modification process the bank would be checking my credit. Up to the point that I lost my job, my credit rating was in the Excellent range, and I didn't want to jeopardize that. Instinctively I knew that the bank would use the credit hits as a reason NOT to modify my loan. As a result, up until yesterday, when I stopped payment on the mortgage payment check, I still had never missed a payment.

At 7:30 p.m. this past Tuesday, I received a call from a voice in the Wachovia Mortgage phone bank. Her assignment was to inform me that the decision on my case had been reached and the bank would be unable to comply with my request for a loan modification. For a moment I really thought that the top of my head would blow off. All I could get out of my mouth was a whining "Whyyyyyyyyyyyy????? The answer, I swear to God, was "I'm not sure, let me take a look. You will be getting a letter --it was mailed today-- that will explain everything. It looks like it's because you don't have enough income."

At this point tears were running down my face, but when I heard that response I actually said, "Well, duuuuhhhhh! My required hardship letter, one of the criteria for qualification, was the first thing you received. The program was designed for just this scenario. What the hell are you talking about?" Again, she referred me to the letter I have yet to receive.

Two experts appeared on the Today Show Wednesday morning to discuss this very subject. They said that so far 750,000 homeowners have applied for a loan modification under the Federal program. Of those, only 31,000 have been able to qualify for a permanent modification.

One said that the banks have done everything they can to make the process difficult Although the option to reduce the principle on the loan is in the guidelines, the banks will only look at lowering interest rates. If that doesn't bring the payments into the affordable range, they turn the homeowner down. Since the majority of applicants sit with an upside down loan, and since many have suffered a reduction of income in one form or another, they are likely not going to be helped by merely lowering the interest rate.

It is incomprehensible to me why a bank would rather go through a costly (to them) foreclosure process and ultimately be stuck with yet another house in their portfolio, than arrive at a compromise with a long-term, problem-free customer who will resume making a more reasonable payment on time, every time. But that is what they choose. I would have probably been better off missing payments for the past 11 months -- I'm told that is the way to get their attention.

I am a fighter. I always have been. But this process has left me totally out of gas; there is no fight left in me. Let's hope I get it back soon, because there is a lot more life left for me to navigate.