Wednesday, September 26, 2007

To Answer Some Questions...

Well. Last post down, you asked some very good questions about the situation I'm in. I decided to answer them in a post. Writing the last post, and reading your comments, and answering some of your emails - You've all given me a great deal of comfort. Made me stronger.

I need that right now, of course I do. I need to think through all this very carefully too, and your questions helped me frame my thoughts about what's happening and why and how to fix it. I said *Thank you* for very good reason.

That means - oh, LUCKY you! - you'll get a taste of the life of workout specialists. I can't answer your questions, really, any other way.

One of the few things I have going for me in this situation is that doing loan workouts was my profession until I became disabled. It was commercial loans, mostly commercial real estate loans, which are treated far differently from home loan workouts. But many of the basic principles are the same.

One big difference is that the regulations, the regs, for underwriting home loans are far more stringent and inflexible than for the much larger commercial and commercial real estate loans. Our mortgage is a HUD first-time buyer's loan. That adds a whole another layer of regs to adhere to.

Of course a sensible bank doesn't want to foreclose, especially in a soft market. But people aren't always sensible, and corporations are composed of people. And Bank One, who bought out Chase, has an old and powerful reputation of being hardassed about working with delinquent customers. This was already true way back when I worked as a US government banking officer myself, and that ended in 1991.

Legally, the fact that one staffer told us not to make payments probably has no merit, it gives me no legal recourse. First, even if she was an officer (meaning she had certain legal authority to bind the corporation to a promise) it's extremely unlikely she had THAT much authority. In other words, Chase isn't responsible for what she said, if it conflicts with Chase's actual policies.

Second, I have no written record of it anyway, only my own contemporaneous notes. I can't ask her for a record, or for her testimony. It would almost certainly cost her her job, and I believe she said it to help us, not to hurt us. Even though it backfired, it would be dishonorable to hurt her in return for trying to help us.

Third, it's moot. Chase notified me in writing that the workout personnel had changed. The thing that was 100% my error, my responsibility, was that I wasn't getting my mail forwarded to me while I was out of town. All that's required is that they notify me by mail. They did. They mailed me what they needed to mail to get the foreclosure under way.

Foreclosure takes time. I have time until the property is actually seized and sold, probably at least 2 months.

Unfortunately, by then it would cost me far more to redeem it from foreclosure. FAR more. Probably an insurmountable amount of money.

Here's how I found out they'd started foreclosure.

Like with most serious legal actions, you must be served with papers. The people hired to do this came to my house over and over and didn't find me there, ever, because I was in the Northwoods. They saw my weeds were growing back and wondered if I'd skipped town.

So they knocked on my neighbors' door, the wonderful guys across the street. And told them: --Does your neighbor know she's losing her house? That the bank is foreclosing?

And those wonderful guys promptly got on the phone and called me up and told me. They saved my butt, big time.

So I called the bank, and got shuffled around a great deal, found out about the change in personnel, was told all sorts of contradictory things, yada yada yada. The usual stuff. (Some people who experience this think it only happens to them, but that's the norm, it really is.)

Finally, I got a call back from Jill, who'd been assigned to my account when they were taking over from the previous workout person. Jill is a very decent sort. She did everything she could to work with me. She told me how to put together a new modification request, since the previous one got tossed when I didn't answer my mail. She told me it would probably take around $1000 to put it in place after everyone agreed, and to be ready to send the funds within 72 hours of the written agreement. I checked over Mr. Budget, rearranged some things, and saw I could do it. (This amount is called a "down payment," and is usually around one month's mortgage payment. I'd already sent one in, months back, to do Modification #1. Jill's estimate was this: *$1000 or so, perhaps more, so be ready to add to it all you can.*)

Jill was totally shocked, in fact was in tears, when she called me last Thursday to say they needed significantly more. I could tell this was a terribly hard phone call for her to make, one she dreaded making. She was intensely relieved when I reacted as I did. I was shocked too, of course. But I didn't yell or scream or faint or cry, or get angry, or do anything much except ask some questions, and tell her I understood it had nothing to do with her. I don't take it personally. It's not personal. It's just business.

I know why I was shocked.

But: Why was SHE?


Here's why the "down payment" amount mushroomed from $1000, to way more.

-Starting foreclosure means legal fees. That alone comes to $3200 so far. See why it's such a battle for me not to be so angry at myself? That hit happened for one reason only: not getting my mail forwarded.

-When the first attempt at a modification was in process, they had to file a so-called "partial claim" lien on the property. Without going into the gory details, or into all the HUD home loan regs involved - which I'm not conversant with anyway - doing that changed the allowable parameters for the second modification, the current one. Interestingly, when I tried to pin Jill down on the specific changes this made? All she could say was that the 12 months being modified had to be paid back over 18 months, rather than over the remaining life of the mortgage. She couldn't say one reason why the partial claim would change the down payment.

-When Workout Person #1 said "don't make payments," we, of course, fell farther behind. Apparently the max they can do on the modification is 12 month's payments. We're now 14 behind, and after October 1 will be 15 behind. So a significant amount of the revised "down payment" is simply that we must pay 3 mortgage payments at once. Most people would have trouble coming up with that on 2 weeks' notice; we're no different.

-I've no idea if, or how, the regs address late fees. Usually that's at the bank's discretion. This time they say we must pay all late fees now, no flexibility. That alone is almost $900. Again, part of that is due to being told not to make payments.

Here's my plan of action. (Besides dropping the tail end of my summer odyssey and dashing home to file the tax return and all that.)

-While having been instructed not to make payments doesn't help me legally, it may give me bargaining leverage. I think Jill saw evidence of that instruction in my file. Chase may know full well that it's weak legal grounds. But simply having it in place as a possible legal defense might encourage them to deal with me a bit more gently than they want to.

Or...more harshly. More on that in a bit.

-I called the foreclosing attorney's office. I was not allowed to speak to an attorney. I did, however, ask a question of someone there, and got an interesting answer. My question was this: --Does your firm have any objection to waiting 60 days to get your legal fees?- The answer was: --We don't care at all, that's up to Chase.

So I already left Jill a message last Friday repeating that, and asking if her supervisor would consider letting that amount be paid after October 4. I've had no answer yet.

-Paying just the 3 mortgage payments we're truly overdue may forestall them requiring the rest of the funds for a couple weeks. Unlikely, but possible.

-The late fees may be an item that's discretionary. In other words, Chase may be allowed by the regulators to either waive them in whole or part, or, to allow us more time to pay them. That tends to be true of all sorts of different creditors. Remember that, if you're negotiating late payments anywhere. You can usually get out of paying late fees if you ask.

As soon as I get a fix on where we stand financially at present - I'm waiting for some information to come in - I'll put a counter proposal in writing and fax it off to Jill. From here on out, of course, most everything must be written.

Now: Back to Jill being so shocked at the increase in the down payment. Why was she so surprised? Obviously, something happened that was out of the ordinary for her. But what?

I'm getting a sense here of someone, somewhere in the chain of command, wanting to play rough with my particular modification. It could be the departmental attitude as a whole, rather than just me. It could be Jill's immediate supervisor, or someone another level up.

Or maybe I'm reading this all wrong.

But I've worked in many different workout environments, and I've seen many different approaches and attitudes to restructuring debt. It's often harsh and unreasonable. While "half a loaf is better than none" is sensible, the amount of anger behind many collections groups is powerful and overriding. It can also be highly variable within one firm, from workout specialist to workout specialist, from manager to manager, from office to office or region to region.

I worked alongside peers that truly believed every delinquent borrower was a crook. I worked with others who, for no real reason I could see, would take a personal hatred to a particular borrower and throw the book at them. Just didn't like them. Others might do that to former officers of the failed bank, perhaps the president and the treasurer; or they'd go hard after the borrowers they were convinced were financial criminals.

And while I told Jill I don't take this personally, there's some evidence that perhaps I should. There's a couple possible reasons too, including one that you'd think wouldn't happen much. Surprisingly, it does.

Here's some of that possible evidence.

Jill is clearly experienced at her job; she knows what she's doing. Believe me, I can tell. Remember that at first, she estimated I'd need *$1000 or so, perhaps more...*

She'd also clearly read my file before she talked to me the first time on the phone. She had the factual background memorized, as any professional should. That means she knew certain things already. She surely knew what the outstanding late fees were, for instance.

Why would she estimate a $1000 down payment if the late fees alone were almost $900?

The most likely reason I can think of is because it's NOT standard practice for her to demand 100% of the late fees as part of the down payment.

Same goes for the legal fees. The difference there is, she may not have picked up a modification request file that was already in foreclosure before. Perhaps she didn't know the full legal fees would be demanded.

Or...again, that may not be standard practice. Demanded not of everyone, but this time, demanded of me.

If I'm right in guessing there may be animosity in her chain of command, there's usually one of two reasons for that. One is CYA. The other truly is personal. One comes from fear, the other from spite. In business, when I see someone take a sudden new interest in crossing their t's and dotting their i's, I look at those two angles - fear and spite.

Since Chase clearly did some things they shouldn't have done, they could be pressing for everything they can get in order to pad the file with righteous behavior. At job review time - or in court - they could say, --WELL! Workout Person #1 really screwed up and said *don't make payments and don't call in.* Good thing we transferred her! But ME?? I made sure Jill didn't cut them any slack! No, we did it RIGHT, we did.-

In other words, having someone do you wrong does NOT mean they'll be more willing to work with you to remedy that. It's quite often the other way around.

It's also part of human nature to be more angry at someone, even spiteful or hateful, BECAUSE you've done them wrong.

I know that sounds counterintuitive. Shouldn't the victim feel angry instead of the *doer?*

But how often do we see the opposite happen in marriages, in families, in the workplace? Say a manager unfairly passes over a more competent employee, in order to give the manager's less competent relative a promotion. Forever after, that unfair manager may say or do nasty things to the person who was unjustly passed over for the promotion. They add on the injuries, because it feels to them like it makes their initial misdeed seem justified. They make the innocent employee seem like a Bad Guy, in order to protect themselves from the consequences, or the guilt, of their own wrongdoing.

So if what I'm looking at here really is personal spite, it may be from that: because the spiteful person at Chase knows I wasn't really dealt with fairly.

It could also be because I'm disabled and on Social Security, and I said so. I had to. Explaining one's financial situation is required when applying for a loan, or for a loan modification. No way around it.

You might be horrified at how often finding out I'm on disability means people decide I must therefore be lazy, a cheater, a liar, an idiot, a manipulator of the system; or, how often folks are simply jealous at what they perceive as k getting a free ride, an easy life. I even tell them sometimes, right out loud, that they don't want to pay the price I paid to get here. No indeed. I almost never wish this on anybody - except sometimes, on people who think like that. I wish them one day or one week living in this body. Let the punishment fit the crime.

Last but not least, through a long series of events, this whole thing grew out of the hurricanes that damaged our house in 2005. The eyes of Katrina and Wilma passed over my house; I was live-blogging Wilma as two trees were coming down on the roof. I finally had to sign off. Five minutes later I was nearly decapitated by flying glass, as the window on the other wall of my home office blew out and the hurricane came inside the house. We took a great deal of damage.

There are those - you can read them in blogland any day you like - who feel some deep grievances toward anyone who took a beating from those hurricanes. They assume, again, that we got all sorts of great special things we did not merit. So it's possible that someone in Jill's chain of command has an antipathy for hurricane folks - and through no doing of my own, I happen to be one of them.

So. Let's hope spite isn't at work here. But I'll certainly keep all these possibilities in mind every time I communicate with Chase, by phone or in writing. Knowing where they're truly coming from could make the difference in doing this modification, or not being able to do it at all.


Pretty Lady said...

Wow. Praying for you, over here.

The insight about spite toward people we've wronged is dead on. Projection of Guilt is an ugly, ugly thing. This is why I am so firmly anti-guilt.

Rio Vista Boy said...

You have my prayers as well. Life is what it is and you have what it takes to perservere.

Northwoods Woman said...

All good points, plus, they are probably intimidated by you. They know you are a former bank buster, I've heard you talk to them. People like that hate intelligent people, especially women!

Good luck hun.

Kenny said...

What can you say? This is a bad deal all the way around. I hope and pray thgis all works out

Joyce Ellen Davis said...

Maybe you should think of becoming a true and literal bank BUSTER -- or a bank ROBBER.... (just kidding. I think.)

Jean said...

wow... just reading this makes my head spin.
Good luck with all!

k said...

Thank you all for your good wishes. This was not an easy day, and those good wishes helped me stay strong and not hurt as bad as I would have without them.

miss assassin, you slay me! I didn't think it was possible for me to laugh today. You just cracked me up, woman.

Actually, it's an enticing prospect. Hey. I wonder if they have a Chase branch around here?...No no no.

Bank One.

Put it right where it belongs.


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