After Nursing Hopes in a State of Limbo Foreclosures Strike

57 years old Ben Mayfield is one of the many who after nursing hopes in a state of limbo was struck by the reality of foreclosure in the end. He was under the impression that his house had been saved after availing of a loan modification through a federal scheme. He managed to make six payments but then came the shock of foreclosure.

GMAC was the mortgage servicer of Mayfield’s loan. Last July the monthly payment had been brought down by 70% when Mayfield had applied for a loan modification.

As agreed upon he paid six instalments as per bank records; then came the shock. His February payment was returned by GMAC notifying him that his house in Salisbury was being foreclosed. He had bought this log cabin about fifteen years previously. Mayfield commented that the situation has made him scared and mad simultaneously.

The problem is growing. Many homeowners are left in nowhere-land for many months during the trail period pending permanent modification. It is scheduled to be a three month trial stretch during which the homeowners are expected to prove that they can afford the new payment; this is followed by the permanent modification.

But attorneys say that more of the house owners are complaining that the change over from the trial to the permanent status is not occurring timely. In many instances, like that of Mayfield it has not happened finally.

During the previous five weeks 74 homeowners contacted Save Your Home. Of these 74% who had availed of trial modification said that the delay in finalizing sometimes extended up to 9 months; often the last word was rejection. Majority of the others who called on Save Your Home are stuck trying to enter the trial modification zone.

Attorney Stuart Rossman of National Consumer Law Center said, “It is a story that we have heard from around the country.” He has filed federal suits against four lenders accusing them of failing to grant permanent modifications to those who had passed through the trial stage.

GMAC argues that on 10th August the federal plan changed and this meant Mayfield was no longer eligible for it. But Mayfield had not been notified about it and the servicer had continued to accept payment at the reduced payment for many months prior to starting foreclosure proceedings. Lawyer Al Ripley of N.C. Justice Center of Raleigh said, “That’s inherently unfair and wrong. Obviously this guy lost a lot of valuable time and resources in continuing to make payments under the trial modification.”