Borrowers report they feel betrayed, tricked and trapped, by the same lenders who received billions of dollars in taxpayer bailout funds, after following their false and costly instructions to skip mortgage payments in order to qualify for a mortgage modification.
Unfortunately, it seems that the mortgage servicing companies have not been disclosing the effect that skipping payments will have on a borrower's credit rating -all that could cause them them to lose their home. The companies additionally neglect to share with the homeowner that any delinquency and skipped payments will be reported to the credit bureaus, excessive penalty and late fees will be assessed AND debt collectors will begin calling them on the now defaulted loan.
This reckless and harmful advice sets off a chain of events that if followed can harm a consumer for many years to come and even cost them their home! By skipping payments a credit score can plummet by a couple of hundred points and that drop can destroy any chance they had refinancing or getting a loan modification.
Those who have skipped payments soon find they have destroyed their credit, have debt collectors hounding them, credit cards closed, and interest rates and payments jacked up. They are now trapped, without access to credit, without a loan modification and zero ability to refinance out of the mess. Soon they receive foreclosure notices (by the same people who promised to help) and unless the borrower can come up with their missed payments along with hefty fines, penalties and interest all conveniently tacked on by the bank, they will soon lose their home! That's the plan...
Here's a recent consumer email that spells out her troubles with Chase Bank. At this time she wishes to remain anonymous but if you want to get in touch with her, please email me and/or leave comments on this blog.
I've been trying to work directly with the lender to modify my equity line for quite some time (over 3 years). Instead, Chase deliberately set me up, by instructing me to default on my payments or else they wouldn't consider modifying the line. Once I followed their instructions, they froze the equity line and destroyed my credit all in one shot. The collection data, Chase put on my credit report, caused the credit cards I had at $0 balance for emergencies, to be shut down just like that.
This started because I was faced with a serious health crisis that involved various surgeries, considerable downtime and ongoing therapy. I turned to Chase and asked for a temporary loan modification that could reduce the rate of my 2nd mortgage (a Chase Equity Credit Line). After all, I had seen many ads claiming they were there to help their customers if they ran into difficulties. They not only didn't help me, but their advice and instructions cause irreparable harm.Why promise to help their customers if they aren't going to do so?
What is worse is I believe there was no question that Chase knew their instructions would create a harmful series of events that would put me in a position where I couldn't get out from under.
They were fully aware that I had an impeccable payment track record, and told me they couldn't modify my loan because of that. They (with a witness on the phone) instructed me to fall behind by 2-3 payments and then they could modify my loan.
They also know, I maintained the payments they instructed me to hold back, in escrow so they would be immediately available.
I was stunned by Chase's actions. Rather than modifying my loan as promised, I received a letter informing me they were going to initiate "expedited" foreclosure proceedings, (in my opinion, steal my home)!
I read about mortgage fraud, mortgage servicing fraud and homeowners who claim their lenders and servicing companies lied to them. But, I didn't believe this could happen in America.
Upon realizing that Chase's instructions appeared nothing more than a trap, I immediately paid Chase for the 2 month default they created, and covered the current month's payment. By ensuring my account was paid and current in less than 4 days I was able to prevent any possible premeditated actions to foreclose. I managed to intercept and halt Chase's abusive deeds to seemingly defraud me out of my own home of 32 years.
Prior to these sabotaging instructions I had never been in default, on any account, no defaults, ever!! I have an impeccable payment history! So I still do not understand how Chase (as the equity line) was going to foreclose, when the first mortgage was current and paid on time. But I wasn't going to wait to find out. I paid them the monthly payment and of course the fees and added interest they tacked on to my balance caused by their instructions to fall behind "a couple of months".
I felt they held all the cards as I trustingly and innocently, gave them every piece of information about my disadvantaged position, my limited resources, and the vulnerability concerning my health and finances.
And now that I have managed to harness the situation, I would like you to help me expose what clearly seem to be predatory, criminal, and at the least, abusive and deceptive practices, as my research shows, mine is not an isolated incident.
My research makes me feel certain that Chase has perfected their craft through what appears countless victims many of which have lost their homes. All the while,professing angelic actions in their full page ads claiming they are there to help their borrowers. Chase is looking like a wolf dressed in sheep's clothing. I believe everyone must be made aware of this deceptive practice. I don't want them doing this to anyone else. They do not have the right to manipulate, perpetuate or accelerate loss for homeowners that are already frail, beaten down, and just hanging on by the skin of their teeth.
Chase failed to pull the wool over this lambs eye. And now this lamb is turning into a tiger, fueled by what I believe are unjust and unethical practices.
To date, the credit damage Chase's instructions caused me has not been remedied or even addressed. It is quite possible this false reporting on my credit may follow me, and adversely affect major aspects of my life for the next 7 years. I have already alerted all of the appropriate government entities that may have jurisdiction, in order to stop this kind of thievery.
Homeowners need to be made aware of Chase's actions!
A Florida Consumer
Has this happened to you? And if so, what mortgage servicing company/lender?
Please comment here, share your story or email me directly.
Tell Congress enough is enough. We need mortgage servicing industry regulations and oversight. Let the borrowers be heard!
A few more links;
Bankrate.com "Skip Payments?"
Watch this Consumer Warning Network video -and see how this practice of telling borrowers to be 3 months behind -purposely puts them into foreclosure.
Why won't my mortgage company help?
UPDATE April 2010 See: Homeowner to Chase Bank: Mr. Lowman, here I am.
And yet another UPDATE: From the Huffington Post: Chase Sued: Allegedly told homeowner to Stop Payments; Then foreclosed.
Excerpt: "The fact that a servicer is telling a homeowner that they're taking care of the matter and, while they're negotiating, the house moves into foreclosure is a completely common scenario in today's foreclosure world," said Ira Rheingold, director of the National Association of Consumer Advocates.