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Mortgage Horror Story…another one.

Updated on October 16, 2008

Don't let this happen to you!



Today I heard one of the most incredible horror stories regarding the unprecedented shamble the mortgage industry is in. The magnitude of ineptitude and missed communications an acquaintance of mine has experienced makes me very fearful for the likelihood that most "troubled" borrowers can actually talk to their lenders and come to an agreement as to livable terms.


I stopped in a local shop looking for charity auction items for a non-profit I try to help out with, and the proprietress told me she donated more than she could legally write off, and that her business was really boarding is a forego-able luxury, along with travel. Everybody's hurting these days. I empathized entirely....a commercial location is a real eater of assets, whether you make a profit or not, the overhead must be paid. And Camille has been in this location for 15 years, and done well with it.


We got to talking about my business, real estate, and she confessed that since her husband was hurt on the job a year ago, unable to work and unable to negotiate any kind of claim or settlement, they've got behind on all their bills, her shop rent, their mortgage. The bank was getting ready to foreclose, and she'd been trying to talk to them and figure out how to proceed.


For 24 years Camille and her husband have owned their rural property on 7 acres. Which happens to be inside an Urban Growth Boundary, about to see rezoning to residential development no later than November of '08.

At that point it's value will at least double and possibly quadruple....once we get out of this slump. The Portland Oregon area has had a UGB in place for 30 years and building has not kept up with the influx of people moving here. Another million people are anticipated by the year 2020.


Three weeks ago Camille scraped up the hefty past due balance and fees needed to catch up their house payments, and sent a certified check their mortgage holder. But the notices of default kept coming from the trustee handling the foreclosure. Many phone calls later, after having waited on hold for as long as an hour and speaking to at least six different persons, they were told their lender had sold their loan. They said they were sending Camille's money back to her....once the trustee caught up with them. Camille and her husband do not know who now holds the loan, or who will be servicing it (cashing their checks)....they don't know where to send the monthly payments in order to stay current, and the clock is ticking. The foreclosure is still underway; notices keep coming...their property is due to be sold on the courthouse steps in July.


And the money they sent still has not come back to them. It's in limbo, and their time is running out, fees and interest mounting.



Camille told me they thought they were set for their old age, and that this has been a frustrating, humiliating and humbling experience for her. The terror she lives with daily is very real. They are prepared to cut back drastically, sell any assets they can, and do whatever necessary to save their home. They had the means to simply catch up their mortgage (well they tried!) and stay current. Because finances now are so dire they really cannot afford an attorney, and fear doing so will stretch out the ordeal and give a lawyer a chance to rack up billable hours further straining their budget. The whole point for them is to eliminate debt and avoid taking on more. Makes sense to me. They've PAID the arrears and shouldn't have to go into debt to get satisfaction.


I cannot give legal advice, but I can point folks in the direction they need to go to get answers. First of all, in their position I would not wait one more day before paying for at least one consultation with a real estate attorney. Their case is the first I have heard of with these particularly nasty circumstances. But considering the lack of trained staff to deal with customers, I suspect it may become more prevalent. And I'd really like to hear if any of you have had similar experiences in trying to communicate with your lender.


In my line of work I receive lots of information about the credit crisis...and one thing sticks in my mind....the lenders do not have enough trained personnel to handle the volume of borrowers who want to talk to them about renegotiating their terms so they don't lose their home. There just aren't enough bodies to handle the load.


So what can you do when you get a notice of arrears or default?


  • Look up your state's foreclosure laws. Easy to find on the internet, and every state has a different process. Know the timelines, process, and your DO have them. Mark your calendar with significant dates involved with your case.


  • Protect yourself by documenting everything. Keep track of when every piece of mail arrives, whether it was snail mail or certified mail...or. Keep a list of every phone conversation you have. The first thing you must ask is the person's full name and where they are in the world. Keep a running log of what was said and if some sort of promise was "we'll send you the check back"...ask for that in writing and make sure it says when. Have them fax it or email any "promises" (and timelines involved) to you in writing while you are still on the phone with them. You may never ‘chat' with this person know who to tag back on if the need arises. Like in court. If it were me I would even tape the conversations if you may need to stock up on tapes. Be sure to let the person know you are taping. If they have an objection, ask to talk to their supervisor. It will take stamina and the ability to count to ten before blowing a gasket, but refuse to be danced around or threatened.


  • If you feel you have not had a satisfactory response from your lender when you try to talk to them, or God forbid if you have tried to pay, like Camille, and your money goes missing...go to your state's official government website and look up the Division of Finances and Corporate Securities. That's what it is called in Oregon, your state may have a different will be involving commerce. Start there. They will not be able to act as an attorney for you, but you can get lots of information from them, not the least of which is if the lender in question has had ongoing and/or unresolved complaints. And you have the opportunity to file a complaint with the state. They love to go after unscrupulous lenders; have a staff paid by you the taxpayer, to do just that. Keep in mind they may be overwhelmed too. And also remember that in order to continue doing business in your state, they have to have the approval from the state's Dept. of Commerce.


  • Keep you eye on the news....Congress is considering a number of relief packages in the form of Bills up for vote. One or several of these could end up buying you enough time to catch up or renegotiate....but you have to know about them in order to ask for them, to apply to your case. I will try to keep you posted on these changes as they go into effect. This is a BIG story so your nightly dose of news will be sure to cover anything that brings some relief or extra time to borrowers in distress.


  • Know if it is time to sell. If there is no way to come to terms, sell your house before you let the bank take it. A foreclosure stays on your credit history a long time. You may have to take a loss; you will definitely take a loss if the bank forecloses. You can also try to negotiate a short sale with your bank...the house will sell for less than you owe on it, and the bank agrees to this. You can also agree to a Deed in Lieu of Foreclosure, as a last resort. Not pretty, but. They get the house & deed; you have no foreclosure on your record. But your best bet by far is to try to sell the house even if you just break even or make a little profit.


  • Last but not least, as I have said in previous hubpages NEVER leave your home while you still hold title. If you own it, don't leave it. You'd be surprised the amount of people who do...who are intimidated and humiliated into just giving up. Camille showed me today a folder of threatening letters from the lender (who is now belly up!). These are almost always computer generated boiler-plate letters sent out to thousand of borrowers every day.


Whatever your circumstance with being a bit behind in your payments, keep trying to talk to them, document every word, time & date...and fight! If you are unable to speak to someone in person, if it's just to difficult to get through, then I would say you have a very good reason to go to your state's Dept. of Commerce with a legitimate complaint.

Published 3/12/08




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    • Mary Tinkler profile imageAUTHOR

      Mary Tinkler 

      10 years ago from Gresham

      Thanks Jenny....I do group them, under real estate, & finance. & Foreclosure. I just created one for mortgage. I like to move the articles around into different groups every so often. It seems to add traffic.

    • Inspirepub profile image


      10 years ago from Sydney, Australia


      This is great information (if rather disturbing!)

      I suggest you make a Group in your account for these mortgage-related hubs. That way, they will all be joined together with a navigation bar at the bottom, and people will be able to browse around all of them easily.


    • MrMarmalade profile image


      10 years ago from Sydney

      Actually I hope you did not think I was being critical. About taping

      I belive there is a law for us and new laws for them when ever they want.

      You have to have lots of money if you wish to argue.

    • Mary Tinkler profile imageAUTHOR

      Mary Tinkler 

      10 years ago from Gresham

      Mr Marmalade....well I did state you should let the person know you are taping. They can refuse, but why would a business entity or their rep refuse? Also taping allows you to go back and review what was said. Every word.

      And as for taping conversations without permission....doesn't seem to bother Bush and Co. I'm pretty sure he's changed the rules. Maybe that's only for the government. There seems to be some confusion and controversy over this issue. Being facetious. Would be funny if it weren't so wrong. ha

    • MrMarmalade profile image


      10 years ago from Sydney

      Great Hub

      In Australia we have an Ombudsman.

      Even a Banking Ombudsman.

      They work wonders.

      I always thought USA forbid taping the other conversation without the other person's permission.

      Thank you


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