“The world is collapsing around me.” Here’s what happened when a homeowner needed mortgage help.

When the COVID pandemic hit, David Sailer’s small business income dwindled to a trickle.

Like millions of Americans, he and his wife Jennifer began having problems with their bills. They didn’t want to lose their two-bedroom, one-bathroom home in Hawthorne, which Sailer calls “picturesque.”

“We put so much love into this house with my wife and I alone, building a patio and a pergola where we sit and watch the sun go down almost every night during the summer,” Sailer said of of the house they share with their six-year-old. -old Shiba Inu named Goku. “It really is our little slice of heaven that I could see us staying in forever.”

In December 2020, they turned to their mortgage lender, Bank of America, about a forbearance program.

Forbearance does not erase mortgage debt, but allows homeowners to defer payments without additional fees, penalties, interest or negative marks on their credit reports, according to the Consumer Financial Protection Bureau (CFPB).

At its pandemic peak in June 2020, 4.3 million owners were forbearing, according to data from the Mortgage Bankers Association. The numbers have been on a downward trend since, with 590,000 owners still on forbearance through February 2022.

There’s no data on how many of those homeowners eventually ended up in foreclosure, but 83% of those who left forbearance through February are current on their mortgages, the group said.

“You can simply tell your repairer that you’re having pandemic-related financial hardship,” the CFPB said, noting that most homeowners can offset payments over time or they can extend the term of the loan.

That’s exactly what Sailer said Bank of America told him.

“They were telling me that we would have options at the end of the loan and that we were protected by this federal program against losing the house, reporting late payments to the credit agencies, and that we could repay the amount over time. time or it could be added to the back of the loan,” Sailer said.

At the end of December 2021, the couple was in a much better financial situation. Sailer’s income had returned and he called the bank to end the forbearance. The couple were ready to start paying again with a plan to add forbearance payments at the end of the loan.

A bank representative said he would send the documents, which had to be returned by January 15.

The documents hadn’t arrived by early January, so Sailer said he followed up with the bank.

It was then that the bomb exploded.

“I have been informed that Bank of America is no longer our provider and that Gregory Funding is taking over,” he said.

Then Gregory’s letter arrived.

He said they owed $24,000 immediately — the amount of mortgage payments that weren’t made during the forbearance — or risk losing their home.

Sailer called the company.

Gregory made her another offer: pay $6,500 in escrow fees up front, and then the $24,000 would be added to the back of the loan, along with $4,800 in accrued interest during the forbearance. Monthly mortgage payments would increase from $1,954 to $2,213, and he is expected to sign before April 7.

He said he didn’t have $6,500 in cash lying around.

Adding to the problem, even though they weren’t supposed to be, the 12 forbearance payments were late reported to the credit bureaus, dropping Sailer’s credit score from 706 to 555, he said. declared. Now he was seen as someone with very bad credit.

“It wasn’t supposed to happen under the wards,” he said. “I had a backup plan. Even though Bank of America came to me and said you now owe $24,000 with no repayment options, I could have gotten a good rate on a personal loan if I had to.

But now, with his newly poor credit, his initial search for loans found rates over 28%.

As they tried to get more details from Gregory on what the future terms would be, the Sailers asked the state Emergency Rescue Mortgage Assistance (ERMA) Programwhich will give up to $35,000 to eligible homeowners who have struggled to pay their housing bills during the pandemic.

“The world is collapsing around me. I’m only held back by more stacks of apps around me,” Sailer said.

He thinks Gregory should honor the promises made by Bank of America and that all negative ratings should be removed from his credit report.

He filed complaints with the Consumer Division and the Department of Banking and Insurance, and he asked Bamboozled for help.

CUT THROUGH THE RED BROTHERHOOD

We reviewed the couple’s mortgage documents and asked Bank of America to explain how this forbearance slipped through the cracks.

“Our role was to service the loan and that ended in early January,” Bank of America said, without explaining why Sailer’s forbearance was not over or the terms weren’t transferred to Gregory. “We have not made any negative comments (on their) credit report.”

Well, someone did.

Gregory, now as loan administrator, was the entity that could bring about change.

We asked Gregory to take a look, and a few days later Sailer got a call.

Gregory offered her new terms which he called a “unique offer” and “better” than the previous offer, but Sailer said it was worse.

He would have to pay a lower amount, $1,900, up front. But his monthly mortgage payment would increase from $1,954 to $2,312, or $100 more per month than the first offer.

“Gregory is vague on the details and I don’t have anything in writing,” he said, noting that the first offer seemed better to him – if he could get the initial funds of $6,500.

We asked Gregory to clarify and explain why the new contract was not offered in writing.

An hour later, Sailer received an email with the details of the offer. And then the lender had yet another loan option: instead of paying the full $6,500 up front, it could be spread over its first three mortgage payments.

At the same time, he got the loan he needed at an interest rate of 4.8%. He would accept the initial offer, he said.

“Holy shit, I can breathe again,” Sailer said.

But what about those negative marks on his credit report?

Gregory said there was no comment. Bank of America again said it did not report.

We asked Experian, the credit bureau where Sailer saw the negative ratings, to take a look.

He said he couldn’t discuss the account for client confidentiality reasons, but shortly after our investigation, his credit report was corrected.

“When I first received the letter from Bank of America in January, and then spoke with Gregory and saw my credit rating drop dramatically, all without warning, I felt cheated and overwhelmed,” Sailer said. “We are now able to breathe again and move on, but more importantly keep the home we love.”

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Karin Price Mueller can be reached at [email protected]. Follow her on Twitter at @KPMueller.

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