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Jeff nelson-bungert


minneapolis,  Minnesota  55449
1/1/2011
In May 2009, we began trying to negotiate with the bank to save our house from foreclosure. Since then, we have submitted 3 or 4 hardship letters, each with copies of our income tax returns, current check stubs, a financial sheet (budget) and application forms and disclosures. We have talked to somewhere between 12 to 16 different bank representatives. I'm being conservative here, it may have actually been more but we are also trying to get a chapter 13 bankruptcy and it's hard to recall all the phone conversations and faxes. First, a bank representative told me that we could not negotiate a loan modification because I had started a Debt Management Program. He said the underwriters treat DMPs like bankruptcies. I thought that was dumb because the agreement allowed all my creditors to get all their money back only at a smaller interest rate. We could not make the DMP payments and mortgage payments so we started working with a bankruptcy attorney for a chapter 13. In September 2009, I sent the first application. I received a call from the first bank representative saying that they were missing some papers. I knew I had filled everything out so I insisted she look again. She found them and said there had been a misunderstanding because while I did send everything, I had not signed everything and put my loan number on each form. I drove all the signed papers over to a business office which I was told was a clearing house set up to process all the applications. It was on the other side of the city and I had to drive like hell to get there and back in time for work. A month later I got a letter stating my application was rejected as forms were not submitted. I called again and a bank rep found my file and apologized saying it was all ok but it had expired so I needed to resubmit everything with updates and current check stubs. The stress got to be too much for my wife and we separated. I was one month behind on my house payment but my wife needed her income to pay her own rent and utilities. I got a couple renters to help me make the mortgage payments. I also cleaned out my retirement savings (it was only a few thousand dollars) and called the bank to get caught up. I told the bank representative that while I could get caught up, I would wind up in the same predicament unless the bank can work with me. This was about the time of the government bail out of the banks. The rep said I was in luck because now with only my income, I could qualify for one of the government programs. All I had to do was have my wife sign off on a quick claim deed. I would get a $200 reduction in monthly payments and I would not have to make the first payment for a whole month. I had called to make a payment so I did pay for one payment. I even set up automatic payments for the three "trial" payments. I had money left so I gave it to my wife and kids to help her set up her new household. I made the three payments for the trial period, but they didn't start the first month like I thought, so I even had another month to get caught up with my bills. I remember calling because I received a mortgage statement saying I was two payments behind. It would be ok they told me, apparently, the first phone payment I made was not applied to the mortgage but was put with the trial payment money in some sort of escrow account. "80% of the people who do these trial periods end up not making it" the woman told me. "That wouldn't be me", I thought. I had already set up the three automatic payments. I finished the three trial period payments and didn't hear anything. I called and was told sometimes people go for a six month trial period instead of three. She said I should keep paying the trial amount. In the mean time, I should resubmit all the paperwork to update it. I didn’t make a payment that month. It didn’t seem to matter whether I paid or not because they continued to send letters telling me I was delinquent. And when I called them they said not to worry because the money was in a separate account and would eventually be applied. My wife and I reconciled and I helped her and the kids move back in. So now, in my updated application, we had my wife’s income as well. But a new representative called me and said my gross income was too high to qualify. "No something must be wrong with your numbers; I'm skipping meals here to pay our bills, why do you use gross income anyway". She made some phone calls and then said I was right. She said I should resubmit everything using a different financial sheet than the one sent with my original application and use this one from the internet that asks for net instead of gross income. I submitted everything and a couple months later I got a call from a new representative. She was kind of nasty. She said our income was too high. I explained that we were separated and my wife had her own expenses of rent and utilities. She said that did not matter. We had to count both our incomes but could not count her expenses. What exactly does the bank want to know about us from all this? It appeared to me that no one knows exactly. A couple weeks later, I received a HAMP offer from the bank. All I needed to do was sign it and send it back. But the monthly payments of the agreement were going to be $200 MORE! Not just $200 more than the trial period, but $200 more than the original payments. What the hell? I called the bank and asked what happened. The bank representative didn’t know what I was talking about and scolded me for being so far behind on my payments. She then found the records of money I sent during the trial period. There was a little hesitation in her voice as if what she was telling me didn’t seem right to her either but she said it anyway: When they did the new agreement, they had not yet applied the money that had been set aside in the trial period. They also took the payment I meant to bring the mortgage current and put it in the escrow account, so that wasn't applied either. Add another month that I didn't pay because I was waiting to hear what I was supposed to do, add late fees and bingo I’m $17,000 behind! They modified the loan adding the $17000 to the original loan and thus came up with payments that are higher. If we didn't sign it, they would foreclose. This is a nightmare! They took the government money and used it to subsidize a parallel foreclose process. On paper, it looks like we sat back and didn’t make a payment for nine months. I turned on the speaker phone so my wife could hear this too. We asked questions that she could not answer or maybe she just couldn't stomach what was coming out of her own mouth. She referred as to her supervisor. She said we should send it back with a letter explaining why we rejected it and do another hardship application. We did send another. While we were waiting for someone to start working on it, we kept getting calls from irate bank reps wondering why we rejected the offer. My wife spoke to one who rep who said we were in no position to bargain with them since we are so far behind. She suggested we make at least one payment. We did better than that, my wife cleaned out her retirement and payed the whole $17000. What happened next you may ask? We got a call from a rep followed by a letter rejecting us because we are now current and no longer qualify for any programs. I would like to end this with some kind of conclusion but I'm speechless. A country where this kind of thing can happen, apparently on a large scale, because people are too incompetent, apathetic or just plain ignorant can't be too far from its end.
About Me
Jeff and his wife are both nurses and have pretty good incomes. They live in a modest house which they purchased at the hight of the housing bubble. Jeff thought he was being frugal because the house was the least expensive one in the area. It was older and not part of the surrounding brand new real estate developments. Jeff erroniously thought that the bank wouldn't loan them the money if they thought they couldn't afford the mortgage payments. Truth is they won't. Their agent told them he would split the cost into two mortgages so they would not have to pay mortgage insurance. "What a nice guy to save money for us like that" they thought! Jeff and his family have sought rehabilitation and chapter 13 and have been living within their means for over two years. They are still what you would call "house poor" but they are a hell of a lot smarter than they were 10 years ago.
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