Working with lenders lands homeowners in foreclosure
BAKERSFIELD, Calif. -- Throughout Kern County, a person can find dozens, if not hundreds, of houses that are vacant with unkempt lawns or worse.
But behind each of those empty homes is a story. The stories are all different but are filled with drama, hope, pain and they all end the same way.
It's the story of foreclosure.
Dozens of people have contacted Eyewitness News who claim that trying to get a home loan modification through their bank or lender landed them in foreclosure.
The process started simply enough. They went to their bank for a modification. Some, such as Rick and Ruth DeAmicis, said they were told to stop making mortgage payments to show hardship.
The DeAmicis' spoke to their loan servicing company about their modification. The couple said the company told them to disregard any "default" or "intent to foreclose" letters, because they were computer generated.
Meanwhile, Bakersfield resident Brent Hamaker wasn't told to stop making mortgage payments, but to make reduced payments during a trial period.
However, he got suspicious when a default notice came in the mail encouraging him to make his normal monthly payment to help avoid foreclosure.
"So this new discounted price, you could pay that," he said, "But you're taking a risk of being foreclosed, because you're making partial payments."
Hamaker went on to make his full mortgage payments. However the DeAmicis' followed the instructions their lender had given and didn't.
Eventually, they got a phone call telling them they didn't qualify for the modification.
"We're like, 'Oh wow!,'" recalled Ruth. "I said, 'What about the missed payments?' and the guy said, 'Well you're in serious default now.'"
Turns out, the bank had already started the foreclosure process. When the DeAmicis' offered to pay the money back they were told it was too late.
After the bank shot them down, the family then turned to the courts, but that wasn't much better.
"I can understand why many people walk away," said Ruth. "If they're upside down in their loan. It's easier just to do cash for keys, just give it up. Who would want to do this (paperwork)? I wouldn't choose to do this."
It's a complex process that many people will just give up, and our homeowners think that's what the banks are banking on.
"This is the American dream to own your home," said Hamaker, "But you reach a point with all this nonsense you have to go through and you really question yourself, is it really worth it?"
To find out about the modification process, Eyewitness News called several major lenders; JP Morgan Chase, Wells Fargo, Bank of America, and CitiMortgage.
Eyewitness News also called the Federal Reserve Board, which oversees the banks.
Only Chase was willing to do a recorded phone interview, the rest just answered questions, and the FRB didn't return any phone calls or emails over a one month period.
When the banks were asked why the foreclosure process started when homeowners were making reduced payments, like they were told, each bank said it wasn't up to them and that it was state guidelines or the investor that determined when foreclosure proceedings began.
"It's appropriate to move towards short sale or foreclosure, because if the person can't stay we have to be as efficient as we can," explained Chase spokesperson Tom Kelly.
The banks added that the foreclosure process takes awhile, a year or more, and that's to give the homeowner a chance to stay in their home.
"We don't want foreclosures," said Kelly. "It's a very expensive thing for the bank it's difficult for the family and tough for the neighborhood."
Our homeowners Don't believe that.
"The ultimate thing is they want their money," said Oildale resident Sherry Aal.
Ruth said, "I do believe they purposely lead people into default."
Hamaker explained why it's better for the banks to foreclose instead of giving a modification. "We're forced to pay a PMI (Personal Mortgage Insurance), what that does is if I ever default on my loan, the bank files claim with insurance, the bank gets all this money for my loan. Then they auction my house off and they get that money on top of that," he said. "They make more money on foreclosures than they do keeping someone in the home."
Eyewitness News asked the banks about that scenario; all said it wasn't true.
"What the banks are trying to do really is try and lose less than they otherwise would," said Kelly. "Because foreclosure is expensive."
But foreclosure is what our homeowners were or are currently facing. Hamaker was able to avoid it, but he still doesn't feel safe. "Nothing's guaranteed," he said. "You could lose your job tomorrow, you fall to a sickness, you could slip and fall and break your arm and it'd wipe you out."
As for Aal, she's given up and short selling her home. However the future doesn't get much better. "I got three options," she said. "(Move to) Texas or, at the age of 54, (go live with) my mom and dad, and I have a sister that's buying a house and wants me to move in."
The Deamicis' have one last chance to save their home with a court date on Nov. 18 but aren't very optimistic.
"We look at the trend what's going on," said Ruth. "We'll probably be swept out of our home like everyone else."
To avoid a similar situation, the banks advise homeowners to continue working with their lenders, but caution that foreclosure could be the end result.
The U.S. Department of Housing and Urban Development also has programs to avoid foreclosure and help with the modification process. Call them at 1-888-995-HOPE.
Another piece of advice is to contact your local legislator and ask them for help.
But behind each of those empty homes is a story. The stories are all different but are filled with drama, hope, pain and they all end the same way.
It's the story of foreclosure.
Dozens of people have contacted Eyewitness News who claim that trying to get a home loan modification through their bank or lender landed them in foreclosure.
The process started simply enough. They went to their bank for a modification. Some, such as Rick and Ruth DeAmicis, said they were told to stop making mortgage payments to show hardship.
The DeAmicis' spoke to their loan servicing company about their modification. The couple said the company told them to disregard any "default" or "intent to foreclose" letters, because they were computer generated.
Meanwhile, Bakersfield resident Brent Hamaker wasn't told to stop making mortgage payments, but to make reduced payments during a trial period.
However, he got suspicious when a default notice came in the mail encouraging him to make his normal monthly payment to help avoid foreclosure.
"So this new discounted price, you could pay that," he said, "But you're taking a risk of being foreclosed, because you're making partial payments."
Hamaker went on to make his full mortgage payments. However the DeAmicis' followed the instructions their lender had given and didn't.
Eventually, they got a phone call telling them they didn't qualify for the modification.
"We're like, 'Oh wow!,'" recalled Ruth. "I said, 'What about the missed payments?' and the guy said, 'Well you're in serious default now.'"
Turns out, the bank had already started the foreclosure process. When the DeAmicis' offered to pay the money back they were told it was too late.
After the bank shot them down, the family then turned to the courts, but that wasn't much better.
"I can understand why many people walk away," said Ruth. "If they're upside down in their loan. It's easier just to do cash for keys, just give it up. Who would want to do this (paperwork)? I wouldn't choose to do this."
It's a complex process that many people will just give up, and our homeowners think that's what the banks are banking on.
"This is the American dream to own your home," said Hamaker, "But you reach a point with all this nonsense you have to go through and you really question yourself, is it really worth it?"
To find out about the modification process, Eyewitness News called several major lenders; JP Morgan Chase, Wells Fargo, Bank of America, and CitiMortgage.
Eyewitness News also called the Federal Reserve Board, which oversees the banks.
Only Chase was willing to do a recorded phone interview, the rest just answered questions, and the FRB didn't return any phone calls or emails over a one month period.
When the banks were asked why the foreclosure process started when homeowners were making reduced payments, like they were told, each bank said it wasn't up to them and that it was state guidelines or the investor that determined when foreclosure proceedings began.
"It's appropriate to move towards short sale or foreclosure, because if the person can't stay we have to be as efficient as we can," explained Chase spokesperson Tom Kelly.
The banks added that the foreclosure process takes awhile, a year or more, and that's to give the homeowner a chance to stay in their home.
"We don't want foreclosures," said Kelly. "It's a very expensive thing for the bank it's difficult for the family and tough for the neighborhood."
Our homeowners Don't believe that.
"The ultimate thing is they want their money," said Oildale resident Sherry Aal.
Ruth said, "I do believe they purposely lead people into default."
Hamaker explained why it's better for the banks to foreclose instead of giving a modification. "We're forced to pay a PMI (Personal Mortgage Insurance), what that does is if I ever default on my loan, the bank files claim with insurance, the bank gets all this money for my loan. Then they auction my house off and they get that money on top of that," he said. "They make more money on foreclosures than they do keeping someone in the home."
Eyewitness News asked the banks about that scenario; all said it wasn't true.
"What the banks are trying to do really is try and lose less than they otherwise would," said Kelly. "Because foreclosure is expensive."
But foreclosure is what our homeowners were or are currently facing. Hamaker was able to avoid it, but he still doesn't feel safe. "Nothing's guaranteed," he said. "You could lose your job tomorrow, you fall to a sickness, you could slip and fall and break your arm and it'd wipe you out."
As for Aal, she's given up and short selling her home. However the future doesn't get much better. "I got three options," she said. "(Move to) Texas or, at the age of 54, (go live with) my mom and dad, and I have a sister that's buying a house and wants me to move in."
The Deamicis' have one last chance to save their home with a court date on Nov. 18 but aren't very optimistic.
"We look at the trend what's going on," said Ruth. "We'll probably be swept out of our home like everyone else."
To avoid a similar situation, the banks advise homeowners to continue working with their lenders, but caution that foreclosure could be the end result.
The U.S. Department of Housing and Urban Development also has programs to avoid foreclosure and help with the modification process. Call them at 1-888-995-HOPE.
Another piece of advice is to contact your local legislator and ask them for help.
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