Mortgage Mortification: Part One- The Con

My boyfriend, Andy lost his job during the 2008 Thanksgiving weekend.One day we were full of thanks, the next not so much. Added to his sudden unemployment, the hourly rate at my job had also been reduced but at least that had been somewhat expected. Andy’s lay-off was not. Times were starting to get hard.

When HAMP or the Home Affordable Modification Program began, people got excited: home-owners who were having trouble with their mortgages, lenders and some unscrupulous rip-off artists looking to make a buck. Everyone wanted to believe that HAMP was the godsend that we were waiting for. 

A number of my friends had jobs working for either real estate people or lawyers who were helping home-owners get their mortgages modified, helping them and helping themselves with a large service charge. The goal was for mortgagees to acquire a percentage and payment that they could handle and allegedly these “helpers” had the methods and the knowledge that could almost guarantee modification. 

We had refinanced our house a number of times. I had used a large chunk of my inheritance as a down payment on my first house. When I sold it, I had made a bit of money on it and just transferred the funds over to the new house. Refinancing was different than modification. Refinancing was a whole new loan and loan modification adapted the one you had. 

For awhile, refinancing was the cool hip thing to do and we would get approached to refinance and would think “why not?” There were always expenses like water heaters, tree trimming and vacations. Unfortunately we weren’t always practical with what we did with the money we took out. The more we refinanced the more subprime our loan became.

2009 found us with a subprime loan, Andy unemployed, and me under-employed. We had a home loan that we were struggling to pay. We appeared to be the perfect candidates for HAMP.

Some people may ask why we didn’t just go to our families for help but that was never an option. In fact at one point my mother literally said that she hoped we would lose our house so that we would be forced to move in with her. I found this to be so needlessly selfish, that I swore it would never happen.

Every time some friend would suggest that we try to get a loan mod, I would decline. I just felt that we really weren’t qualified and that it wouldn’t work out. It seemed like it was a waste of time and energy. They would persist and wear me down.When they would come back contrite and slightly embarrassed, saying that they had tried but unfortunately we weren’t qualified for this or that reason, I would try to not say I told you but I had indeed told them so.

Then my roommate Tony’s friend Marcel came along. Marcel is a very odd gentleman. I use this old-fashioned term “gentleman” on purpose for he appears to look like someone from another time as he is often dressed in a seersucker suit. How many modern men do you know who can rock a seersucker suit; none and frankly neither can Marcel. He has good manners but does everything in an aggravatingly slow manner. A know-it-all with a supercilious attitude, Marcel can be difficult to be around. One of his best or worst character traits, depending on who you ask, is that he can be extremely tenacious in a slow, tedious way. 

Marcel was working for a law office that was getting people their loan modifications. Since he knew we were struggling to make our mortgage payments, he started working on me. Although I told him I wasn’t interested, he called and emailed me constantly. Convincing my roommate that he was only thinking of me, Marcel got Tony to talk to me. 

Promising that the men he worked with had been able to get almost all their clients loan modifications, Marcel finally got my attention. When I told him that I couldn’t afford the law office fee of $2500.00, he went behind my back and worked it out with Tony. 
Tony would pay his rent a year in advance. Marcel had removed all obstacles; all I needed to do was to agree. Did I agree in part just to get out of Marcel’s radar? Yes. He irritated me into taking action. 

After checking out the law firm on the Better Business Bureau I agreed to meet with them in regards to them helping me achieve loan modification. Marcel assured me that they were legit. These lawyers were dedicated to helping people; their primary focus was immigration law. 

After briefly meeting with the lawyer Francisco, he directed me to his colleague Steve who handled all the loan modifications. I knew almost the second that I met Steve that he wasn’t on the level but I desperately wanted to believe he could save our house. Steve was not a lawyer but Francisco trusted him with loan mod part of the business while Francisco worked more with illegal immigrants trying to not get deported. 

Although Steve was not traditionally good looking (he had a lot of acne scarring on his face) he was appealing. Since he was very friendly, he made me feel at ease and because he was confident about what he would be able to do, I was assured that he would indeed be able to secure the modification for me.

After telling me that he was from St. Petersburg, Russia, Steve confided “I am here to live the American Dream and help others recover theirs.” It was a line he used over and over again. Steve saw himself as the Russian repo-man of the American Dream.

Steve told me of the many home-owners that he had been able to secure modifications for- people who were in much more dire circumstances than I. He had been able to help people who had second loans on their property, people with much worse credit and if worst came to worst; he had helped people declare bankruptcy which always worked. This would be the first time that Steve would talk about the magic of bankruptcy but not the last. 

The only thing that alarmed Steve about our loan was that our loan holder was Bank of America and they were already dragging their feet (and that is the nicest way I can state the nightmare of dealing with B of A) about actually approving some loan modifications. But Steve had secured mortgage modifications from B of A and would do it again. Getting Bank of America to approve some of his clients for modifications were great accomplishments.

When Steve promised to refund most of his fee of $2500.00 if he was unable to get us a loan modification, I felt sure that I was doing the right thing by getting their help.

First thing that we needed to do was stop paying our mortgage. This seemed like an incredibly bad idea. Our loan was the only thing we had been consistently on time with. Our loan was the one shining star in our declining finances, stop paying it? Yes, Steve insisted, they will only accept your application if you are behind at least three months. And as someone who usually does what she is told, we stopped paying our mortgage.

For a few months, Steve actually seemed to be keeping up his end of the bargain. We filled out applications and made copies of bank statements and other necessary documents and he diligently got them to the bank people who needed to see them.

Not long after we signed our contract with Steve, Marcel stopped working with him and Francesco- something about not getting along together well. Marcel still believed that they were honest and hardworking and would ultimately help us with our loan modification goal.

When we started getting calls and letters from the bank, Steve had me refer them to him. He’d handle it as it was part of his job. We were doing everything right. Although we should have put the money that we weren’t using for our mortgage in the bank, we didn’t. We were using it to live on.

Steve became almost like a friend. We chat on the phone about all kinds of things. He wanted to introduce me to his girlfriend, whom he said was studying writing. They promised to come to one of my shows. He wouldn’t con a friend, would he?

Andy got another job but it was at a much lower salary than his previous job but still it was a step in getting out of the mess we were in. 

Steve kept bringing up bankruptcy. It would cost another $4500.00 dollars but he believed it was a sure fire way to get the modification. I had some credit card debit but for some reason I just didn’t want to take that step plus $4500.00 is a lot of money. I had friends who had declared bankruptcy and it was the right thing for them to do but the eagerness that Steve was pushing it for me made me uneasy.

At some point, Steve started getting a lot harder to get a hold of. Supposedly he was working on some cases for clients in Northern Calif. When before he had always called back immediately, it now took some time for him to return a call or an email. Then he stopped responding at all.

Not knowing what was happening with my own loan and getting increasingly scary communications from Bank of America, propelled me to start to take matters into my own hands and make my own calls and fax my own paperwork. 

I complained to Marcel that I couldn’t get a hold of Steve. He contacted Francisco who said he would pass on a message. Finally we had to start calling Francisco and leaving messages and eventually Steve returned our call. 

Sounding just as friendly as ever, Steve said that he had been doing a lot of work up North and while he hadn’t stopped working on our case, it didn’t look good. Now if I would do a BK (his shorthand for bankruptcy) he would be able to secure the loan mod. I refused and asked him to honor his promise to return most of the fee. Steve said he would have only given a refund if he hadn’t done everything in his power to get me that loan modification and he had. If I read the contract I would see he had done everything right. He wished me good luck in getting my American Dream back.

I had been scammed but I was just starting the fight.

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