Investigation: Mortgage meltdown - Dallas News | myFOXdfw.com

Investigation: Mortgage meltdown

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DALLAS -

Imagine losing your entire life savings in one afternoon. It happened to a Garland couple and it is happening all over North Texas. The housing market impacts everyone whether you own or rent. When homes go into foreclosure, it takes down a neighborhood's value and the impact trickles down to everyone.

Robert and Sherry Durham are typical of so many North Texas homeowners. They have lived in their Garland home for 19 years, faithfully paying their monthly mortgage payment. The Durhams said they were just a few years away from having their home completely paid off when Robert lost his job. They contacted CitiMortgage, the company that serviced their loan, about getting some hardship assistance. Robert said after sending all the paperwork, they thought it was all good.

"I was confident that CitiMortgage was working with me, to help save our home because of our payment history," said Robert Durham.

When a foreclosure letter arrived in March, the Durhams didn't panic or try to sell. They were talking with CitiMortgage representatives and thought they were getting a loan modification. That is what a CitiMortgage supervisor told them by phone just a week before the foreclosure sale. The Durhams recorded the call.

"I have confirmed that yes, there is one specific program that can be done. It is not going to be anything fancy for you but it will clear your arrearages out and even reduce your payments to $531 a month and at least it will be a permanent fix. If I have your documents tonight, at the latest tomorrow, I think we can get approval stamped for you to at least get you some kind of help here, drive that payment down, bring you current again."

The Durhams faxed the paperwork that night, then started calling and calling. Nothing. Then an email arrived on the day of the sale. It stated CitiMortgage was "unsuccessful." It was too late, "due to the foreclosure sale being within 7 days."

"There was nothing he said that led us to believe we were in danger of losing the house," said Sherry Durham.

Within days, the Durhams got a knock on the door.

"When the gentleman said, I would like to introduce ourselves as the new owners it was, it was…," Robert Durham hesitated.

"I just about fell over," Sherry Durham said.

It turns out an investment group purchased the Durham's home for $52,000. The appraisal district values their home at $107,000. Since they only owned about $30,000 on their loan, they lost almost $77,000 in equity. Their life's savings was gone in just one day.

"That is certainly bad faith on the part of a lender not to respond," said Attorney Jack Peacock.

Peacock represents homeowners in all types of foreclosure disputes. He said the best time to contact a lawyer is at least 10 days before a foreclosure sale.

"The judges around here are really good about granting restraining orders to stop foreclosures on homeowners," he said. "The judges are just wonderful, glad to do it."

Peacock said it is not impossible but difficult to reverse a foreclosure once the house has been sold.

FOX 4 contacted CitiMortgage about the Durhams and got this statement.

"Unfortunately, not all borrowers qualify for a modification or another solution regarding their mortgage. We work very hard to assist homeowners and since 2007, Citi has helped more than 1.1 million distressed borrowers in their efforts to avoid potential foreclosure and remain in their homes."

Sherry and Robert Durham are still stunned. They feel they were betrayed. They have nowhere to go and now the eviction notice has arrived.

"We are prime examples of what can happen to someone in just a matter of days. After 19 years, in a matter of 90 days, we are homeless," Robert Durham said.

Foreclosure sales were up 9 percent nationwide in May and June. In the Dallas metro area, those figures were up 5 percent. The banks were holding on to a lot of inventory and they are not trying to unload some of it.

It only takes two missed payments for a mortgage company to start the foreclosure process. If you get behind on your mortgage, find out what kinds of programs are offered and get everything in writing. If you are approaching a foreclosure sale date and your issue has not been resolved, contact an attorney for advice.

 

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