Thread: Mortgage Modification? It might cost you your house!

(WXYZ) - It’s the hottest new way to reduce your monthly mortgage payment. But one local family says a program that was supposed to help them actually could cost them their home.

ACTION NEWS INVESTIGATOR HEATHER CATALLO HAS THE STORY IN THE VIDEO PLAYER ON THE RIGHT


All they wanted to do was reduce their monthly house payment through something called a mortgage or loan modification. They went to their mortgage company for help, but ended up with their home in foreclosure .

Like so many people these days, Jerry and Peggy Kanowski are struggling financially, and they’re on the verge of losing their home.

[Peggy Kanowski/Fighting Foreclosure] “It’s just unbelievable. I can’t believe it’s happening.”

It all started when this couple from Wyandotte started looking for a way to save money.

[Peggy Kanowski/Fighting Foreclosure] “It was getting harder with him, his hours are cut now. He only works a 35-hour work week.”

No banks would refinance their high interest mortgage because their home is worth less than what they owe. So they went to their own mortgage company -- Saxon Mortgage Services. Saxon agreed to modify their loan, or so the couple thought.

[Jerry Kanowski/Fighting Foreclosure] “You’re all set with the loan modification, as Peggy said, February 2, will be your first payment.”

The modification would reduce their high-interest mortgage to a much lower one for a set period of time, making their house payments more affordable. The Kanowski’s say their loan modification was set for five years, and then the loan would go back to the original high rate.
But things quickly fell apart.

[Jerry Kanowski/Fighting Foreclosure] “We're told initially it would be 3-5 days and it went from 5-7, 7-10 days, it just kept going on and on.”

Months passed while the Kanowski’s waited for the company to send them the loan paperwork.
They say they called Saxon repeatedly, and even kept this log of all the calls they made.

[Peggy Kanowski/Fighting Foreclosure] “Just numerous phone calls upon phone calls trying to get information, roughly over a hundred, we call every other day.”

The Kanowski’s panicked because they say Saxon told them to stop making payments on their home until the loan modification was in place. They did what they were told – but they were terrified they would lose their home.

[Jerry Kanowski/Fighting Foreclosure] “You can’t sleep. Everything is about this.”

Finally the Kanowski’s got this letter from Saxon, that says, quote: “We are pleased to inform you that you have been approved for a loan modification.”

Days later another letter came, saying “foreclosure proceedings” had begun on their home.
Ironically, this same letter says the couple could apply for a mortgage modification to save their home--the very thing that landed them in foreclosure.

[Rod Dunlap/Real Estate Attorney] “Sometimes the right hand doesn’t know what the left hand is doing in the mortgage situation.”

Real estate attorney Rod Dunlap says so many people are trying to save their homes with loan modifications that banks and mortgage companies can’t keep up.

[Rod Dunlap/Real Estate Attorney] “When you expect one representative of the mortgage company is going one way, you should expect that it will go that way. Unfortunately in this market, one person is telling you one thing and another person is telling you something else.”

Since last year, customers have filed fifty-three complaints against Saxon with the state. Officials say most of the complaints accuse Saxon of failing to respond in a timely fashion or not at all regarding foreclosures.

The Better Business Bureau in Fort Worth, Texas, where Saxon is based, gave the mortgage company an “F” rating -- in large part for failing to respond to customer complaints. Morgan Stanley, which owns Saxon, says they can’t talk about the Kanowski’s case because of confidentiality rules. In a written statement they say, “Saxon is an active participant in the hope now program and is committed to working with qualified borrowers to structure solutions so they can remain in their homes.”

But the Kanowski’s say they are still getting two different answers from Saxon. They’re being told to re-send all of their financial records to start the modification loan process over from scratch, and they’re being told that their home is scheduled to be auctioned at a sheriff’s sale in June.

[Peggy Kanowski/Fighting Foreclosure] “We just want to keep our house. Keep paying for it. Get on with life."

If you’re in this situation and are facing foreclosure, there are specific steps you can take as a list ditch effort – It’s called produce the note.











we are in a similar predictament -- our loan is higher than the value of the home (I know a couple other people that are in the same situation as us) -- what is different though, is we are not in or near foreclosure, but we DO need to (not just want to) lower our mortgage since we are at 6.75% APR fixed...but no dice for us -- our credit/debt ratio is too high.

Originally Posted by gmyers

I hope the people that told them to stop making payments can straighten it out with the foreclosure department.

i doubt it as the people that told them to stop making payments were trying to SCAM them! Lots of companies have recently just "popped up" online and other places to supposedly "help" people with their mortgages. they are scams just waiting to find the right people who will bite on the "great offer".

that is so sad... people really have to beware these days. there is NO WAY i would refinance my mortgage with anyone but a bank i know and TRUST!

what exactly IS a mortgage company as compared to a bank?

and yes gmyers, you were right it does say they went to their own mortgage company.
it also says "no bank would refinance it because the home is worth less than they owe"

what i'm wondering , or, does it imply that they got their inital home mortgage thru this company that screwed them? if thats the case, that is soooo sad!

Buying a house is like owning a piece of stock....it goes up and down in value......if you borrowed money to make the purchase....why should the borrower be responsible for your investment? If, when the house is sold there is a 'profit'....should the lender get a bonus? Equally, should the house go down in value or be sold at a loss, should the lender take a hit? "no" to both, it's the purchaser's investment.

The value of the house and how the money was obtained for the purchase are separate issues......many want the lenders to take the hit for their 'investment'/home......not right.

I've said it before, if they could afford to make a mortgage payment, they could afford to rent.....no reason to peg them as 'homeless' .....that terminology implies a false picture to the situation.