Mar 20, 2014  •  In Personal

When David Loses

There is a couple who is very dear to me. They are some of the hardest workers I know — having immigrated to the states with two daughters and no money to their name, they worked menial jobs and saved every last cent until they were finally able to afford a business, and then a home. They are honest, upstanding citizens who are looked up to in their community and loved by many.

They seemed to have achieved the American dream.

Then things began to fall apart.

The man became a victim of a serious crime which cost him his life savings and retirement funds. Not only that, his credit (which was in the high 700s to low 800s) also became marred because the theft had stolen his identity as well. However, the man refused to press charges (which would help clear his credit history) because he knew that the theft had a family of his own — “He has no money to pay me back and they’re sure to throw him in jail. How will his family survive then?”

Then came more troubles. The downturn economy which did no favors for their business. Medical problems. House repairs that needed to be addressed.

They began to fall behind on their mortgage payments.

Like many others in this situation, the couple sought a loan modification. The lending bank denied them with no clear explanation. The bank then began foreclosure proceedings.

The couple wanted to keep their home. They were more than willing to keep paying their mortgage — they just needed new terms for the loan so that the payments could be more affordable. (Their business is in a sector that has not recovered from the recession.) Considering that they obtained their 15-year mortgage before the real estate bubble when interest rates were still high, requesting to change the terms to 30 years and/or lowering the interest rate didn’t seem too unreasonable.

They even hired an attorney to help them keep their home. And over the next ~1.5 years, they did everything that was asked of them: submitting endless amounts of paperwork, attending numerous court-mandated mediation sessions, etc.

But the bank — and I am not afraid to use their name here because they’ve been nothing but uncooperative over this entire ordeal: EVERBANK — seemed to have a mission from day one.

You see, this couple had been diligently making their mortgage for years and years and had built quite a bit of equity on their home. They had already paid off 4/5 of their mortgage, to be exact.

So the bank knew that if they foreclosed, they would be making money.

david_vs_goliath

With the help of their attorney and the local court’s mediator, the couple applied for a loan modification again. When EverBank denied the modification, the court asked why. They did not receive all the paperwork on time, they said.

The court asked that another loan modification application to be considered. Once again, EverBank denied the modification, this time, on the basis that the couple’s income level was too high. When asked to see the figures that factored into that decision, EverBank revealed that they had added the couple’s gross business income into the final number.

Even the court mediator was flabbergasted. “Why would you do that?” he asked. “Business accounts are separate from personal accounts. How much their business makes should have little to no influence on this decision — just look at their W2’s!”

Things like this continued to happen. EverBank would “lose” paperwork the couple sent over. They would not supply the couple with paperwork they requested. And so on and so forth.

You know that the lending bank is being unreasonable when the court mediator continually berates them and apologizes for their behavior.

You know that the lending bank is being unreasonable when their own freaking attorney apologizes on their behalf.

“I like your family. I want you guys to keep your home. I want to settle this. But I can only do what they tell me to do.”

This couple recently made a Hail Mary offer — a large down payment to “buy” a modification. (Believe it or not, this is legal.) Even their own attorney was confident that this would work.

But once again, EverBank refused. They said that at this point, for the couple to keep their home, only a reinstatement of their loan — which the bank knows the couple can no longer afford because they have all their financial statements — would be acceptable.

It was clear that EverBank only saw dollar signs as they pushed this home for foreclosure.

(EverBank is no stranger to “unsafe and unsound practices in mortgage servicing and foreclosure processing” — just look at this settlement!)

The couple looked to other lenders for loans and refinancing options. But due to their marred credit score, they were turned away everywhere. Besides, no bank was willing to touch the existing mortgage because the house was already in the foreclosure process.

The last thing that the court mediator told the couple was, “Once again, I am so sorry. There is nothing illegal that the bank has done. This is a case of your being punished for paying off so much of your mortgage and building a sizable equity on your home. There is nothing I can do for you.”

The couple’s attorney wants to discuss bankruptcy and foreclosure options.

It’s always the worst when bad things happen to good people, isn’t it?

17 Responses to “When David Loses”

  1. What a terrible story… sadly we live in a world where David usually loses to Goliath.. I live in Spain and since the crisis the housing situation here has been critical with hundreds of people being thrown out of their homes by banks.
    Maybe they could try to make a campaign to gain awareness, in platforms such as Change.org or something like that, I know that here in Spain some families have succeed to keep their homes by making the situation known on social networks… if many people complain, banks can be pressured by the public opinion and sometimes they bend a little.
    I hope they find the way to keep the house!!

    Jara

  2. This is extremely sad, frustrating, discouraging and I am sure feels hopeless. I hope that bad publicity will help the bank realize how ridiculous this and this couple gets a fair and satisfactory resolution. I can only imagine how difficult this must be for you to watch (their story sounds very familiar…)

  3. Amy:

    That is terrible! They did everything they could right. If they hadn’t shoveled equity into their home (and thus somewhat protected from identity theft) the identity thief would have lifted those funds from any liquid funds/stock markets etc anyways. The fact they “Sheltered” their money in their home-it’s such a logical thing to do. Especially if they didn’t have other traditional retirement vehicles like a 401k (they sound like small business owners). Their must be consumer watchdog agencies that will fight big battle for them. Tragic!

  4. I am appalled and disgusted. This is an outrage! An absolute outrage. Is there a way we can help? I know many people don’t like to fall on charity, but in this case, I think a GoFundMe or some such could help them reach that 1/5 goal to pay off their home. I know I would contribute!

  5. Tara:

    I’m so sorry, Jenny. Despite all the negative things people have to say about government, that’s one of the reasons I really loved being a government regulator. Any time you have a situation where one side has all the power and there’s money to be made, the temptation is just too great for Goliath to pick David’s pockets for a few extra dollars. Have you tried telling the story on the CFPB’s mortgage consumer complaint page? It will do nothing for this specific situation … BUT it could help get the company and/or these sorts of practices on the radar for future action.

  6. Emily:

    How about a change.org petition? I get those all the time for what seem to be similar things (woman who was fired from her job at McDonald’s for paying for food for firefighter customers)…how about a petition started, to the bank, to provide this family with the loan modification they request? Great way to bring mass public pressure quickly.

    • They are first-generation immigrants who are not completely proficient in English, and as is typical of older generations, are not too familiar with the workings of the web (and not involved in social media). I’d love to help but these days (as you can see from the dates on recent posts) I barely have time myself.

  7. This is a sad story. Did you find a way to help them?
    Btw just followed you on Twitter. Like your site! Looking forward to connect!

  8. Sunny:

    I’m sorry to hear about this situation. Did they ever ask the bank if they could do a short sale? Or refinance the mortgage with another lender and use the loan from there to pay off the mortgage with Everbank? I work primarily in commercial foreclosures litigation but I’m familiar with some of the residential process, potential defenses and solutions. Our bank clients always work with the borrower to negotiate a settlement or do a payment arrangement prior to going ahead with a foreclosure sale. I’ve never heard of Everbank but they sound horrible.
    PS – Without going into too much detail, a foreclosure doesn’t necessarily always benefit the bank, more often the proceeds are less than the amount owed, etc. Depends on the facts.

    • The bank has denied a short sale. And as stated in the post, every lender they have checked with will not give them a loan (due to their marred credit score) and/or are not willing to touch the loan because it’s already in the foreclosure process.

  9. mei:

    Will something like Lending club help them until they get back to a better place? https://www.lendingclub.com/

    • Unfortunately, places like Lending Club rely heavily on credit scores for good rates, and their credit score is marred due to the identity theft and the owed money on the mortgage.

  10. Yun:

    I agree with what Sunny said, the couple should really look into refinancing to another lender with lower rates and better terms. As I understand it in US all home loans are non-recourse, which means they should be free to walk away to another lender, even if the interest rate is fixed. Unlike Australia where loans are full-recourse: the bank can seize you personal assets, extra investment properties, and bankrupt you even after foreclosing your home.

    I assume the couple may be stuck with Everbank because their home’s valuation price is much less than their debt amount, or they do not have enough equity in their home to meet other bank’s refinance requirement. In that case they may simply need to bite the bullet, save every penny and focus on paying down the loan.

    • Yun, as stated in the post, every lender they have checked with will not give them a loan (due to their marred credit score) and/or are not willing to touch the loan because it’s already in the foreclosure process. And all third parties who have looked into their situation (other lenders, the court mediator, and attorneys) state that they have too much equity in their loan (as stated in the post) and they are being punished for that.

  11. This is absolutely awful! I feel so sorry for the couple. They seem so lovely and genuine from your post and for this to happen to them is dreadful. I can’t believe a bank could do this! it’s absolutely ridiculous and unfair. *Sigh* Hopefully Everbank stops being a *swear word* and it gets sorted out. :( Stories like these make me so angry.

  12. Christine:

    I, too, lost my home that was serviced by Everhome/Everbank. To make a long story short, Everhome admittedly made a mistake on my escrow calculation raising my payment 300.00/MONTH. After sending me foreclosure papers they send me a letter admitting their mistake. They eventually foreclosed. I rec’d. a meager $2,700 in compensation from the IFR. Looking for some legal help – not too optimistic. Thanks.

Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>