Comments (21) | Add a comment
Area homeowners flustered while trying to ward off foreclosures
-
K.M. Cannon/LAS VEGAS REVIEW-JOURNAL
Roberta Ferraris sits in the kitchen of her Northwest Las Vegas home with notices of mortgage default that were taped to her door. » Buy this photo
Tools
-
Roberta Ferraris and her husband, Chuck, talk in the kitchen of their Northwest Las Vegas home. The Ferrarises have been trying to get a loan modification from their bank. K.M. Cannon/LAS VEGAS REVIEW-JOURNAL » Buy this photo
LAS VEGAS REVIEW-JOURNAL
Charles and Roberta Ferraris are trying to do the right thing -- to pay their debts and meet their obligations like they were taught by their parents.
Money's been tight since Charles got laid off from his casino job and Roberta had her hours cut at a local accounting firm. They've both found other work, but the loss of income set them behind on $2,100 monthly mortgage payments.
A second foreclosure notice was recently posted on their door, and now they're worried about being tossed onto the streets.
They've been battling with Bank of America for a loan modification since December 2008, seeking a reduction in mortgage principal. Roberta Ferraris was told the best the bank could do was lower the interest rate.
"I called and talked to people and cried and finally they postponed the foreclosure sale," Ferraris said at her home in the master-planned Providence community. "We're pretty frustrated with the whole process. They're just making it impossible. It seems no matter what we do or where we turn, we can't get any help on this."
One in 69 households in Nevada is facing foreclosure, the latest report from Irvine, Calif.-based real estate research firm RealtyTrac shows.
Few Nevadans have found relief with the government's $75 billion Home Affordable Mortgage Program and other foreclosure alternatives, including state-required mediation.
"Loan modifications in Nevada particularly are a joke," Las Vegas housing analyst Larry Murphy said. "They are a waste of time, effort and expense for everybody -- borrower and lender alike."
If banks were more willing to work with homeowners in good faith, there would probably be fewer "strategic defaults," or people walking away from their mortgage obligations, RealtyTrac Senior Vice President Rick Sharga said.
"I think there's a lot of visceral anger at the banks right now," he said. "Homeowners find that their mortgage is 50 percent more than the value of their house. What they'd like to do is some workout with the bank. They feel the banks are stonewalling them."
Ken Jameson of Pahrump is up against that wall. Retired and collecting disability, he's fallen behind on his $1,885 monthly house payment. He was granted a six-month forbearance agreement from Bank of America to pay $947 a month, but that period has expired and the bank won't extend it.
"They've allowed me to make this payment until the situation gets resolved, but it's not going to get resolved," he said. "I want a payment that I can live with, that I can make. I want to keep my house, but an $1,885 payment on an income of $3,000 ain't gonna cut it. What they want me to do is keep making $1,885 payments and I can't afford to do that."
Jameson, who was financed by Countrywide Home Loans, bought the new home for $310,000 in March 2007 with 30 percent down. He takes responsibility for signing the loan documents, but said he was "overwhelmed" at the time.
"I should have walked out of there, but we needed to get in the home," he said.
Distressed homeowners read about banks getting bailed out of the subprime mortgage crisis with taxpayer money, paying executives million-dollar bonuses and posting huge quarterly profits. None of it seems to be trickling their way. Maybe it's time to play hardball.
Ronald Williams sued J.P. Morgan Chase, Chase Home Finance and Cooper Castle law firm in Las Vegas, claiming that agents for the bank misrepresented to the homeowner that they were authorized to collect mortgage payments after taking over Washington Mutual.
"They're collecting mortgages on notes that were gone," Williams told the Review-Journal. "Chase has nothing to do with my note at all. They're pretending they do. They're extorting money under cover of the note. I believe a lot of people have left their home in a foreclosure that was fraudulently filed."
That's a tack being taken by legal experts in other states who say lenders must produce the original promissory note to proceed with foreclosure. It hasn't gone far in Nevada. Williams' lawsuit was dismissed, though he said he's going to appeal.
The Florida Supreme Court ruled in February to require verification of mortgage foreclosure complaints involving residential property. The primary purpose is to provide incentive for the plaintiff to "appropriately investigate and verify its ownership of the note or right to enforce the note," the court said.
It's taken a while to identify the issues and to grasp the scope of the problems caused by mortgage lenders, Las Vegas real estate investor Bill Kay said. Now that judges are aware of these issues, the tide has shifted, he said.
"You and I both know that what these bankers did to Las Vegas was worse than any natural disaster," Kay said. "And they are still stealing homes in broad daylight."
Ownership titles have been "polluted" or "clouded," he said. Law firms acting as debt collectors on behalf of lenders are filing wrongful nonjudicial foreclosures, or foreclosures that cannot be overturned in court, Kay said.
"They're digging a hole we're going to fall into," Kay said. "We need to take a cue from Florida. This part of the law is necessary to help the housing market in Las Vegas."
Loan modifications can complicate an already bad situation for homeowners, placing borrowers at a disadvantage with no exit strategy and leaving many in a debt trap at the mercy of the banks, said Marian Anthony, president of Anthony Realty Group in San Diego.
"This problem is so big, it's contagious," he said. "Remember, we are borrowing our own money. It's like a shell game. The banks are investing our retirement funds, our 401(k) money. That money is funding our loans."
Banks are processing an unprecedented volume of loan modifications, which requires extensive documentation, probably more than refinancing, said Jumana Bauwens, spokeswoman for Bank of America in Los Angeles.
"In 2007, if somebody lost their job or couldn't make their mortgage payment, the way out was put a 'For Sale' sign on the property and hope you can sell it and maybe make a profit," she said. "Modifications and these types of programs weren't as extensive as they are today."
Some 500 Bank of America customers in Nevada recently received offers to participate in the Earned Principal Forgiveness Program, Bauwens said. The program incrementally reduces principal balance from 120 percent loan-to-value ratio to 95 percent over a period of three to five years, with certain stipulations and requirements, for homeowners who make 12 months of principal payments.
Michael Burke of Las Vegas told the Review-Journal he contacted CitiMortgage before becoming delinquent on his account. He requested to pay only the interest and escrow for a few months, and was not seeking a loan modification.
Burke said his payment was reasonable at 4.75 percent interest on a 15-year loan. He's paid down the principal balance by $120,000 since 2006, but has had difficulty making the monthly payment due to sporadic income.
A representative for the mortgage company told him there was nothing they could do.
"I consider myself a reasonable person and I was raised to believe it is a moral obligation to honor my promises," Burke said, "but at this moment -- based on how angry I am -- I could care less if my lender ever gets paid. I cannot believe there is nothing CitiMortgage could do to help me, but that was the line they gave me."
Dick Hofacker of Realty Professionals in Las Vegas hears the same sad stories from homeowners who owe more than their homes are worth. Some of them can afford to make the payments, but have decided not to, he said. Some are investors who took out creative financing and stated-income loans to buy when the market was hot.
"There's a lot of blame to go around," Hofacker said. "Everybody's crying because they tried to make money. If you lied (on loan documents), shame on you."
Roberta Ferraris blames Countrywide, which was acquired by Bank of America. She got an appraisal from Countrywide of $206,000 on her three-bedroom, 2,032-square-foot home in June 2008, but was later notified that the appraisal was wrong. The home was financed for $258,000.
"They didn't like the $206,000 appraisal, so they got their own guy to put in an appraisal and he put $60,000 extra into the land. They magically came up with one that was equal to what they initially wanted to sell us the house for," Ferraris said. "This is a disaster. We are both very angry and frustrated. We feel Countrywide was dishonest, to say the least, in the way they did our loan."
Contact reporter Hubble Smith at hsmith@reviewjournal.com or 702-383-0491.
Trending topics:
Comments
Terms & Conditions
The following comments are provided by readers and are the sole responsiblity of the authors. The Review-Journal does not review comments before publication nor guarantee their accuracy. By publishing a comment here you agree to abide by the comment policy. If you see a comment that violates the policy, please use the Report Abuse button.
Some comments may not display immediately due to an automatic filter. These comments will be reviewed within 24 hours. Please do not submit a comment more than once.
Sign In to Comment
Please sign in or register to comment. For more information visit the Registration FAQ.
Note: Comments made by reporters and editors of the Las Vegas Review-Journal are presented with a yellow background.
RSS
Twitter
Facebook
NEWSFLASH: Mortgages were given to Extraterrestrials too! An audit their loan applications reveals that they stated "astronaut" for employment and "space" as employer. They are showing the highest default/foreclosure rates!
"When a bank makes a loan, it simply adds to the borrower's deposit account in the bank by the amount of the loan. The money isn't taken from anyone else's deposit; it was not previously paid in to the bank by anyone. It's new money, created by the bank for the use of the borrower." Robert B. Anderson, Secretary of the Treasury under Eisenhower.
If you have a mortgage your not the owner. You don’t own anything until you make the last payment. Every rational person understands this yet the media, the government and every other "authority" keeps promoting the lie that mortgage holders are homeowners. The primary purpose of ownership is to free you from debt, hence the inseparable relationship between the ownership of property and liberty. Unfortunately, the lie of homeownership only gets worse, for even if you have paid your mortgage you can never make the last property tax payment. The American Dream of homeownership is the greatest lie ever told. If what property tax provides is so important why must the media lie about it and call people homeowners. Call people with mortgages homeowers, home-buyers or mortgagees and those whom have paid their mortgages state-renters or homesteaders. Being forced to pay another because of what is supposed to belong to you (what property makes you do) is the basis of slavery not ownership. Quit calling people homeowners it’s an outrageous lie!!
test
We have a theory on how this crisis came about. Consider this, due to the securitization scheme, the banksters had absolutely no skin in the game, but made trillions in the origination fees resulting in multi-million dollar personal bonuses…
HUGE culprit, CDS insurance provided the banksters and the real investors with a motive to cause massive defaults by the borrowers thereby allowing the lenders to recoup their investment in 18 months rather than 30 years.
It is important to notice, that many loans were insured multiple (in some cases 30+) times, providing a further enhancement of the motive to default the borrowers.
If anyone disagrees with this, we welcome him or her to review an incredibly well documented loan histories in our possession.
They are more than a “smoking guns”; they are a “smoking machine guns”.
Banksters business is evaluating risk and they were well aware of the impending doom since the late ’90. This just caused them to buy more CDS insurance.
All of the financial institutions were made whole by the payouts from the taxpayer bailed out AIG and their likes.
Furthermore, our government has supported our financial system with trillions of dollars plunging our nation into the inescapable national debt abyss…
Government has also provided the banksters with direct capital infusions allegedly to promote the flow of credit and work out modifications. Has anyone seen any of that yet?
Are we the only people to be angry with our government and the banksters that crashed the world economy in their greedy quest for insane and obscene amounts of profit?
providencegroup@ymail.com
By-By American Pie. Drove my Toyota to the Levy and the levy was dry.
The only way to solve the mortgage crisis is for the Federal Government to stop all evictions, use what's left of the tax payers TARP money to refinance every loan good or bad at 4% and tell the lender to eat the loss! If you default on the 4% we make you a renter, you stay, take care of the property and the tax payers own the home. Banks screwed the working class by loaning money on over valued property, not requiring adequate income to maintain the loan. It's time to hold the big banks responsible for a change, let them eat the loss or go out of business, let the FDIC pay the depositers, the stock holders and CEO's can eat manure!
If you short sell your home, or have it foreclosed, the bank gets ?% of the original note. Say a $570,000 mortgage on a home worth $300,000 today. The new owner cannot be related to the seller. The bank then applies to TARP and recovers 85% of its loss. And has the right to slap a promissory note on the seller/defaulter. Why can't the bank "short sell" the property to a qualified owner, at the new value? That is where my anger is directed.
many mistakes werw made on all sides. however, we have this situation now and the only way to solve it is for all sides to work together, giving and taking - not taking and taking.
the banks and mortage companies need to work more easily with homeowners to make a plan that they can afford and the homeowners need to stick to the aggreed upon plan.
overall, however, the banks are failing us and not working to ease the situation. we bailed them out. now they have to bail us out.
Okay I feel sorry for the people that have lost their job or income.
I DONT feel sorry for people that got ARMS or bought more than they could afford. They deserve to pay the consequences of their behavior. If you cannot understand the terms of your loan you should not get one.
As for lowering the principal, why should the bank? The house is collateral for a loan. The bank did not sell you the house. They gave you a loan to buy a house If you default on a loan, they take collateral.
Banks can lower interest rates or extend the loan to 40 years, but in deference to all the underwater owners in the valley paying their mortgages, these owners should not have reduced principals.