11 Sale Dates in One Year… and then the bank modified his loan?

You can’t unlock this door with a key or in mediation.  Beyond is a land of foreclosure dissension.  It’s a dimension not of right and wrong, most get declined.  You’re moving into a world of shadowy banks lacking substance.  A journey into a blunderous land of eternal stagnation.  Another land mine is up ahead, because your next stop is… The Hindsight Zone.

Okay, so that was fun, right?  (Unless you’re too young to have watched The Twilight Zone 100,000 times, in which case… oh well.)  So, here’s the story…

I had the opportunity to review a homeowners credit report yesterday.  He’s a single dad that retired from the LA County Sheriff’s Department, although he still has a business and so still goes to work every day.

Just like everyone else, he had an adjustable rate loan back in 2008 and when the meltdown happened, he became scared that his adjustable rate mortgage would go up to its cap and leave him with monthly payments of $14,000.  And if that were to happen, he realized, there was no way he could cover those payments.

Then, he heard about Obama’s Making Home Affordable Program, so he called his bank/servicer in 2009… and the loan mod nightmare that millions know all too well began for him.

He kept fighting, however, and in February 2012, it finally happened… he was approved for a loan mod that offered a fixed rate of 2 percent for 30 years.  He was understandably relieved that it was over, because three years in the loan-modification-go-round had been hell.

Since his first trial payment was made in February of 2012, he hasn’t been late even once on his monthly mortgage payment.  So, that’s really great… another hard fought battle ends in victory for a homeowner.

So, I’m looking at his credit report and I notice that in 2011, the year before his modification was approved, the bank had filed 11 Notices of Sale… one filed every month for 11 months, and each month he fought to get the sale date postponed for another 30 days.  And at the end of that insanity, they approved him for a modification.

I thought about what I was looking at, and got angrier and angrier.  See, I was around and covering the foreclosure crisis during those years and the wounds are still raw.  The bank had no right to do what they did.  Today, doing what they did would be illegal under the Homeowner’s Bill of Rights and various federal statutes, like Reg X and/or Reg Z.

His credit report shows what dual tracking is all about.  While he went through the approval process, they scheduled his home for sale every month, and then at the last minute agreed to move it to the following month.  Wouldn’t it have made much more sense and been much more normal is they would have postponed the sale date once… as in, we’ll postpone it until we give you a decision on the loan mod you’re applying for?

You don’t need to keep re-setting the sale date every month… unless you want to absolutely ruin someone’s credit report until it’s beyond recognition.  What it should show is one sale date/Notice of Sale, and then a postponement as he awaited the decision on his modification.  That way his credit report wouldn’t show 11 sales dates filed in one year.

And then after filing those 11 sale dates in 2011, they approved him?  That’s absurd.  If someone has 11 sale dates filed in one year, the bank should be foreclosing on the home.  I mean, they tried to sell his home 11 times in one year… they should ultimately succeed.  If you’re going to modify the loan eventually, then don’t file 11 sale dates in a year.  File one and postpone it until decision on the modification.

Starring at his credit report brought it all back to me and I remembered just how insane everything was back then. 

Remember the “we lost your paperwork” insanity?  They wouldn’t just lose it once, I heard stories about banks claiming to have lost the paperwork more than a dozen times. 

Good Lord, think about that.  Even a 14 year-old boy would come up with something else to say after claiming to have lost his homework more than a couple of times.  I can’t believe the people working at servicers at that time, didn’t refuse to keep telling the same lie… as in, “I can’t tell him that again, I’ve already used that same excuse 11 times… can’t we come up with something more believable?” 

How about something like, “our computer crashed again?”  Or maybe “say that we’re in a merger?”  Or we could “say that we had a flood or fire.  They’ll never know.”  And then the reply… “No, I’m sorry but corporate says to stick with the eternally lost paperwork story for now.  I promise to let you know when we’re ready to start lying about something else.”  

So, when he applies for any type of credit, he’s going to look like the worst risk in history, I mean, I’ll ask again… under what sort of scenario does someone show up with 11 sale dates in one year?  What did he do to cause the bank to do that, someone would have to wonder.

The truth, however, is that he’s not irresponsible… he’s the victim here.  If the same thing happened to him today, it would be clearly illegal under all sorts of laws and rules.

And if you want proof of what I’m saying, just go back and read the national mortgage settlement, or listen to what President Obama said on television about what had been going on and how it would be fixed by the settlement.  I happen to remember that speech because it was the first time that Obama came out and admitted that many people lost homes that shouldn’t have and were treated improperly, etc. etc. 

The banks paid billions in fines for their bad behavior that created those 11 Notices of Sale over 12 months, so why should this or any homeowner be forced to live with the consequences of that behavior that we now KNOW was somewhere between unfair and illegal?

It’s bad enough that the banks essentially got away with what they did during those years, but it’s positively infuriating and unconscionable that any homeowners still be paying for what they did today.

And by the way… we also now all know that interest rates never did go up, in fact they went down, so this homeowner never even needed the modification, as things turned out.  It was all so incredibly unnecessary and yet he’s the one with the 11 Notices of Sale filed on his credit report that will be there for some seven years.

There are literally millions of similar stories and 37,000 new foreclosure sales were completed last month, which someone like Core Logic just published as if it were some sort of positive accomplishment.  (If it wasn’t Core Logic, it was someone like that, I can’t remember at the moment and i’m not going to look it up.  Google it if you want to find out who said it for sure, but I’m sure about the number.)

Should we all be so happy that only 37,000 foreclosed homes were sold last month?  I mean, if we did that number every month that’s 444,000 for the year and 1233 per day, roughly.  And assuming an 8-hour work day thats 154 an hour.  And that’s considered to be good because it appears as so much less than what went on during 2009, 2010 and 2011.

Why do we compare anything to what happened during those years?  They were hell on earth as far as foreclosures were concerned.  Doing anything better than those years is nothing of which to be terribly proud.

After all, it’s almost 2016 and everyone has had plenty of time to get their arms around what happened that caused more than eight million to lose homes for foreclosure.  Not stopping them, even after you understand it, is outrageous, but not providing some sort of mechanism to allow those unfairly damaged by the way the banks behaved during those years in unforgivable.

Mandelman out.