My Head Is Still Spinning

Well, today was a bust. A total bust.

As many of you know, I was laid off from my “day job” back in January of 2009. We were hit hard with the news that I would no longer be employed with the company I had devoted over 10 years to.

At the time I was laid-off I had just started the process of refinancing our home at a lower interest rate. Because of the lay-off, we had a lot of problems with the mortgage company in the first half of 2009. Even though I had been laid off, we did not miss a payment, we were late a couple times, but we were never “behind” more than a couple weeks.

Things finally settled out and the mortgage company got their act together. Phone calls were made (or received) weekly and I can’t tell you how many times they apologized for the delay, telling me they had so many “loan modifications” in the works that everything was backed up from closings on new houses to refinances, and of course, the now infamous government bailouts.

In February of this year (yes, the refinance took that long) everything was settled and our paperwork was processed. I received a package via Fedex with the new loan papers, which I signed and returned via Fedex the same day. Our newly refinanced loan would save us over $150 per month, which was a bit less than we had hoped to save, but more importantly it brought our interest rate down to 5% (almost 2 full points) fixed for 30 years. When you look at the long term, it seemed like a great move on my part, but in the end, it was the stupidest thing I have ever done in my life.

Each month I would make our house payment, then a couple days later I would follow up by logging into the mortgage company’s website to make sure that the payment posted to our account. This month was no different. I logged in, made the payment, and logged out. This month was like every other month before it, until today.

When I logged in today to make sure the payment posted, I couldn’t get into my account. The website was telling me that I did not have a “web enabled” account with the company. I figured it was just a website snafu, but I called anyway, so I could check my balance. What happened next floored me.

I was told that I didn’t have a valid account with them, and that any correspondence had to be done through their attorneys. I was flabbergasted. I just paid the monthly payment three days ago, how could I not have an account with them, surely there was some sort of mix up.

The very polite girl on the phone explained to me that they never received my signed paperwork to initiate the loan re-finance, and because the original loan was no longer valid, I was in default on our mortgage.

I insisted to her that I had been sending payments, and that I had never received anything from them (phone calls, or letters) telling me there was something wrong. As I mentioned above, they called me a couple times each week before the re-finance was finalized, but I haven’t heard a word from them since.

Ms. Polite insisted they never received my paperwork and there was nothing she could do for me. She assured me that if they had received the paperwork everything would be fine, but it appeared to them that I had walked away from the house. Even though I am sitting here tonight looking at my copy of the paperwork (dutifully stamped with “COPY” all over it), they still claim they never received the copy of the paperwork I returned to them (in their own envelope), therefore my loan is now in default.

My head was spinning. Now I understand why people “go postal” on corporations. I asked her a few more questions, to which she simply told me I had to contact the attorneys office, and then Ms. Polite hung up the phone.

I immediately called the attorneys office to ask some questions and gain some insight. It seems my non-existent loan can be “re-instated” if I pay some re-instatement fees (along with attorney fees). How do you “re-instate” a loan they say never existed? The girl at the attorneys office kept referring to April 1, which is the start date of the new loan (you know, the one they now say never existed). I asked her why she kept referring to April 1, and she told me she would have to check with the mortgage company about the date.

So… To state the obvious… The mortgage company cannot tell me anything about the issue because it’s no longer in their hands, but the attorneys office needs to refer to them because something is obviously still in their hands. Huh? Something wasn’t adding up, so I spent the remainder of this afternoon doing some research.

I contacted a few people and sent out some inquiries, and I now know that even though their practices are unethical, even bordering on immoral, they will have legal standing because I have no evidence that I actually sent them my paperwork, I have no evidence they ever received it, and on top of it all, if I took them to court, I would most likely find myself in the same position only with added legal fees on top of it all.

While researching this afternoon, I found that I am not alone. It appears I am not the only one this has happened to. I found a forum where a lot of former customers of this same mortgage company got hit real hard by them as well.

One woman was stuck in refinance, or loan modification, hell for 19 months, only for them to come back and foreclose because of the difference in the payment amount she had been making for those 19 months. She was making the payment they instructed her to make, yet they came back and took her house because the amount she was paying was $400 less during the processing period.

Another gentleman lost his house (without any warning at all) when they pulled the same thing on him that they are doing to me. The only difference is I made that phone call today and got wind of what was going on before they actually sold the house.

As it stands right now, I am waiting on a quote from the attorneys office for the “re-instatement fee” to see if we can stay in our home. The attorneys office told me they had to contact the mortgage company (again, about my now non-existent loan), get the amount from them, then add on their fees (which will most likely amount to closing costs, attorney fees, etc, that go along with a new loan). I was told it would take 48 hours to receive the information via e-mail. They will be sending a letter as well, but with the e-mail I won’t have to wait 4-7 days to get the information.

It’s obvious this is nothing more than a paperwork snafu, but it very well could end up with us losing our home.

Over the course of the past year I have heard horror stories from people who have lost their homes. I’ve heard sob stories from people who claimed their mortgage company sold their house out from under them. And I’ve heard people whine about the unfair lending practices that got people into the mess in the first place.

Until today I thought most of them were just a bunch of crybabies who got in too deep, were trying to milk the system, or were taking advantage of government bailouts. I had no idea the mortgage companies were pulling stunts like this on people who actually worked hard to provide for their family, did everything they could to keep making their payments, and did their best to do the right thing.

Today was a crappy day. How do we know which people are walking away from their existing loans and which people are getting kicked to the curb by the mortgage companies just for the sport of it.