The Wall Street Journal seeks clarification on Chase Loan Modification Answers

May 14, 2020: Two days elapsed before Chase came back to the Wall Street Journal reporter with a revised comment on my situation. In the face of the evidence I provided, Chase had little choice but to modify their intentionally misleading answer.

Per the reporter:

“Below is Chase’s latest statement re your loan. Please let me know your thoughts. Thanks. 

Chase: We modified the homeowners’ mortgage in 2008, reducing the interest rate to 6% and locking in until 2013.  The homeowner applied for another modification in 2009.  

In the summer of 2009, in March of 2010, and in May of 2010, we notified the homeowner that she did not qualify for a second modification.  We determined that modifying the loan would produce less value to the loan’s owner than foreclosing, using analysis based on the Treasury’s model.  There also a question about whether it was her primary residence.”

My hair was on fire over this misleading representation of how I’d been strung along and flat-out lied to for over thirteen months. I wanted to run screaming to the reporter but I composed myself. The Wall Street Journal was a conservative publication and the reporter had an obligation to be objective and hear all sides. I was absolutely livid but I composed a measured response:

Thank you for giving me the opportunity to respond. Regarding the statement: We modified the homeowners’ mortgage in 2008, reducing the interest rate to 6% and locking in until 2013. The Loan originated as a sub-prime pick & pay with Washington Mutual on 2/26/06. Over the next eighteen months I received countless marketing solicitations offering to “modify” my loan to a fixed rate; they all seemed to focus on me paying WaMu some lump sum in order to “fix” my interest rate.

By mid to late 2007 I actually understood my loan and the concept of “negative amortization”. I started paying the full mortgage amount each month (the principal and interest) and even made some headway on reducing the negative amortization. Once I focused on the mortgage it was evident that when the loan adjusted, the interest rate was going to jump and the full amount would increase exponentially.

The Washington Mutual solicitations continued and with each “offer” the lump sum amount to “fix” the interest rate kept dropping. By January 2008 I could see that interest rates were going up and I feared the interest rate reset. In February 2008 I folded and paid Washington Mutual $995.00 for the privilege of locking into a 5/1 LIBOR Interest Only ARM at 6.62%.

To call this streamline refinance which I paid for the privilege of getting a “modification” is disingenuous at best; my “mortgage modification” consisted of nothing more than a five-year fixed rate interest only loan with a new higher (not lower) payment. The interest rate was not reduced, indeed, it increased.

Regarding the statement: The homeowner applied for another modification in 2009. This is correct; I initiated a modification request on 2/24/09 and was denied on 8/25/09 because: “Your property equity exceeds our program guidelines.”

Regarding the statement: In the summer of 2009, in March of 2010, and in May of 2010, we notified the homeowner that she did not qualify for a second modification. We determined that modifying the loan would produce less value to the loan’s owner than foreclosing, using analysis based on the Treasury’s model. I stand by my original comments: That is not correct. I have two written letters from Chase, which I have shared with you.

To reiterate: The first denial, dated August 25, 2009, states in one sentence: “Your property equity exceeds our program guidelines.” There is no reference to the Treasury’s model as a reason for denial; nor is there reference to a residency issue. The way Chase has worded this new response is disingenuous at best.  

The second written communication dated March 5, 2010 states “We are unable to offer you a Home Affordable Modification because we are unable to verify that you do live in the property as your primary residence”. There is no reference to the Treasury’s model as a reason for denial; regarding the residency issue, Chase has three years of Federal Income tax returns at the address (I can provide five years worth) & five years of voting records. Chase confirmed my residency was not an issue and reopened the case (which is why they kept working on it and allegedly generated another denial in May 2010).

Regarding: the May 2010 denial Chase references. As previously noted, I have received no written communication of this and know only from a call I placed yesterday (5/13/10) that, per Rafael in Loss Mitigation at Chase, the modification was denied on 5/4/10. It is again disingenuous at best to state Chase notified the homeowner, as, without your intercession, I would STILL have no knowledge of this denial; I waited again for the mailman today before responding and there is nothing from Chase.

Regarding the statement: We determined that modifying the loan would produce less value to the loan’s owner than foreclosing, using analysis based on the Treasury’s model. This has not been communicated to the homeowner in writing at any time. I am aware of this ONLY through your email asking for a comment on Chase’s initial response and subsequently through the above referenced Springboard conference call of 5/13/10. Also, I am not certain but I believe the Treasury’s model applies to HAMP modifications, and was we know, I have never qualified for a HAMP modification.  

Finally, I stand by my statement submitted 5/14/10: The opaque banking procedures practiced by Chase do not help the homeowner, they help only the investors. 

If I knew back in February 2009, or even August 2009, what I know today — that the investors behind my loan find it more profitable to foreclose (negative net present value) than to work with me on a modification — I could have made an informed decision. I would have taken the hit and drained my IRA to bring the loan down to a smaller amount and refinanced while my credit record was excellent. At this point, my savings are depleted and my credit record is distressed; even if I reduce the loan amount, no lender will refinance.

 

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Chase loan modification denial due to negative net present value

May 12, 2010: Even as I was taking Ms. De Laura’s (214) 626-2671 “courtesy” call from the Chase Home Lending Executive Office, an e-mail from the Wall Street Journal was waiting in my in-box, with a comment from Chase. Per the reporter:

“Here’s the response I got from Chase re your situation:

Chase communicated to the customer in the summer of 2009, in March of 2010, and in May of 2010 that the customer would not qualify for a loan modification because the analysis showed a negative net present value.   

 Is that correct?”

Was this another test? I composed my thoughts and replied:

“That is not correct. I have two written letters from Chase. The first denial, dated August 25, 2009, states in one sentence: “Your property equity exceeds our program guidelines.” 

The second written communication dated March 5, 2010 states “We are unable to offer you a Home Affordable Modification because we are unable to verify that you do live in the property as your primary residence”.

The case was reopened once I provided my voting records and residency was proven. 

There is nothing in May of 2010, indeed Shawnte Trowlsdell told me on 5/10/10 a letter was to have gone out on April 30th but it did not; she could not see the letter and did not know what it said or why it was not sent. My mailman has come and left today and there are no letters from Chase. The phrase “negative net present value” has never been used nor do I really know what it means…

Two minutes ago Chase called to tell me they were composing a written response to my letter to Mr. Lowman.” 

I was beside myself. I now had an answer, whatever “negative net present value” meant, because this was the first time I’d ever seen those four words in a sentence, and the sentence came from Chase via The Wall Street Journal. There was nothing in writing from Chase about this, nor had those four words ever been expressed in any of my hundreds of calls to Chase.

I didn’t know what it meant but I did know that the response from Chase was curiously worded in such a way as to imply I’d been told all this before, which was simply not true. There were really two sentences in the quote, strung together with the word “because”, only the “because” had never been shared with me. 

The Wall Street Journal needed to know this so I faxed the reporter copies of my two denial letters. I also sent a shout-out to my banker and broker friends to learn the meaning of “negative net present value” 

I spoke with my broker and another broker and a banker I knew – all were mystified by the term “negative net present value” and thought there must be some kind of mistake since I was not underwater in the loan, indeed; I had some equity, as evidenced by the August 2009 denial. The banker said she would dig deeper and get back to me. This was the same banker who had helped me prepare my monthly expenses spreadsheet; she was familiar with my situation and eager to offer assistance. 

Finally I sent an email to the Wall Street Journal reporter and expressed my frustration over not knowing what those four words meant and anger at having never seen them before. They seemed like more bank-talk designed to confuse and obscure, why couldn’t the guidelines and the formulas be transparent? 

His reply was chilling: 

What they mean, I believe, is this: It isn’t in the best financial interests of the owner of the loan to give you a modification. I believe they mean this: the net present value formula shows they would be better off either collecting payments from you under the current terms or foreclosing.”

 I hoped he was mistaken but I knew at that very moment that Chase had been playing games for with me for over fourteen months; they had only provided a clear answer when backed against the wall by the Wall Street Journal.

Was this the new American way, or just the Chase way? It seemed to me that Chase was continuing the predatory loan practices devised by Washington Mutual, and they were even better at playing the game.  

Chase Home Lending Vice President calls about letter to David Lowman seeking answers

May 12, 2010: 3:30 pm: Deana DeLaura (214) 626-2671 called from the Chase Home Lending Executive Office, allegedly in response to my asking for a response to my April 19, 2010 letter to David Lowman. I asked if she was Shawnte Trowlsdell’s direct supervisor. Ms. DeLaura said she was not but she was a “manager in the division” and had reached out to help. They were in the process of “composing a response to my letter” and wanted to let me know they were working on it. I found this very hard to swallow.

It seemed more than coincidental that my numerous letters to Jamie Dimon at Chase (dating as far back as December 16, 2009) had been unanswered, my letter to Mr. David Lowman was already in-house for almost a month and yet suddenly a supervisor just took it upon herself to reach out, shortly after a Wall Street Journal reporter called Chase looking for answers. I didn’t buy it for one minute. No one had bothered to acknowledge any of my prior letters (I’d learned they were all placed in my “Hardship Letter” file from Natalia Carrillo [Chase Home Finance ]) so why the sudden about-face?

Perhaps it would take the Wall Street Journal to get answers from Chase about my loan modification – that was just plain wrong.

The Wall Street Journal seeks answers from Chase

May 10, 2010: I went back and forth by e-mail throughout the day with the Wall Street Journal reporter, answering questions about my financial situation, why I was still waiting, why I hadn’t just sold my house, etc. At the end of the day the reporter told me he’d just asked Chase why I hadn’t gotten an answer after almost 15 months. I was stunned.

Would it take the Wall Street Journal to get an answer from Chase about my loan modification? That was crazy! Why couldn’t regular people get straight answers from Chase?

It seemed to me that Chase was continuing the deceptive practices originated by Washington Mutual. I wasn’t the only one who felt that way; Treasury Secretary Timothy Geithner vowed to crack down on shoddy practices…maybe I should write him a letter as well.

Chase Home Lending Executive Office returns a call

May 10, 2010, 4:46 pm: Shawnte Trowlsdell from the Chase Home Lending Executive Office called. She was returning my call about my letter to Mr. David Lowman earlier in the day and the e-mail she’d received from Marissa. Shawnte told me she’d just started her job a week ago Monday (assuming this was 5/3/10); she got my case on Friday (assuming 5/7/10) and that she was taking on Olga Danilova’s entire caseload of about 100 cases – per Shawnte, it was all a “big mess”. I asked her if she was just filling in for Olga since I knew Olga was out of the country for two weeks; Shawnte said she wasn’t really sure about that but Olga would not be coming back; she was “no longer in the department”. Shawnte said she was trying to sort through everything; she did not have a lot to go on and no one had briefed her. Per Shawnte, it really was a mess as Olga had taken no notes and never called anyone back; customers were very upset.

I said that Olga had actually called me twice and e-mailed me three times; Shawnte interrupted to say with surprise and some relief that I was the first person to say anything like that about Olga, no one else could ever get in touch with her. I said that although Olga had occasionally made contact nothing much ever came of it but the purpose of my call was to follow-up on my letter to Mr. David Lowman.

I told Shawnte I was happy she’d called and while I’d like to talk about my loan modification, right now I wanted to find out why I’d not heard back from Mr. Lowman. Shawnte was very nice and said there was an awful lot in my file to go through and she’d quickly looked for the letter…had I sent it in May? I said no, it was dated 4/19/10 and confirmed received 4/21/10; perhaps she should look more in that date range. Shawnte couldn’t find the letter but she did mention that she saw in my file a letter was to have been sent out to me on April 30, 2010, but for some reason it did not go out; perhaps it was in editing? She could not see the actual letter to me nor could she see what the letter might be about. She trailed off and said “something” happened to the letter; it did not go out. That was interesting. So what was the phone call from Olga all about?

Shawnte went on to ask me more about my letter to Mr. Lowman. I explained about his testimony before Congress… and that I’d written regarding same. She said she would need to read up on my file and get back to me, most likely by the end of the week. I asked Shawnte about her schedule and she told me she was in Ohio; her hours were 9 to 5 but because she was so new, she was in training each day from 1 to 5, which was frustrating as it made it difficult to return homeowner’s calls. Her direct phone number was (614) 422-3764 and she was going to speak with her supervisor to see what could be done about getting a response to my letter to Mr. David Lowman.

Mr. David Lowman offered something to the American people when he testified to the House Committee on Financial Services. He said that people who sought answers from Chase about their loan modifications should come to him…where the heck was he and how could anyone reach him?

Mr. David Lowman Chase Home Lending CEO, I need answers!

May 10, 2010, 3:08 pm: It had been thirteen business days since confirmed USPS Certified Mail delivery (April 21, 2010) of my letter to Mr. David Lowman regarding his testimony before the House Committee on Financial Services. It was time to place a follow-up call to the Chase headquarters in Manhattan. I dialed (212) 270-6000 and asked to speak with Mr. David Lowman. I was told to stay on the line; after about a minute on hold Marissa from the Chase Home Lending Executive Office picked up and asked for my loan number!

I told Marissa I was calling regarding a letter to Mr. Lowman dated 4/19/10, mailed to New York and with receipt confirmation dated 4/21/10; was she in New York? Marissa said she was not, she was in northern Louisiana. She asked repeatedly for my loan # which I declined to provide. Instead I asked what happened to the calls and mail directed to the New York office. Marissa said she was an “operator” and operators could be located in OH, LA & FL. She went on to say that any correspondence sent to Mr. Lowman would be tracked, filed and retrievable by loan number; with that, I reluctantly provided my loan number. Marissa asked permission to put me on hold while she pulled the file and read the notes. I agreed and reiterated I was seeking a response or at least an acknowledgement of my letter to Mr. David Lowman, Chase Home Lending CEO.

After a few minutes Marissa came back on the line to report that she could see my letter was received and logged into the system under my case, but she did not see any other notations of any kind. I asked what would happen? Had Mr. Lowman ever actually received the letter, and had he read it? Marissa replied that she was “not saying that he doesn’t read it”, she was just reporting what she could see in my file. I asked if I should fax the letter to him, or mail it again.

Marissa said she could verify the letter had been received and that my case had been assigned to Shawnte Trowlsdell. Marissa said she would send an e-mail to Shawnte and ask her to respond. Marissa was very polite and genuinely trying to be helpful. She confirmed my telephone number and told me she would see to it that Shawnte got back to me. I thanked her and we ended the call.

Can the Wall Street Journal get Chase loan modification answers?

May 10, 2010: A reporter from the Wall Street Journal responded to a copy of my letter to Mr. David Lowman, CEO Chase Home Lending. He wanted to know if I’d heard back from Mr. Lowman and I told him I had not. It had been thirteen business days since confirmed USPS Certified Mail delivery (April 21, 2010) of my letter to Mr. David Lowman regarding his testimony before the House Committee on Financial Services and I’d planned to place a follow-up call later in the day.

With that we spoke about a story the Wall Street Journal was developing about people who were worse off after having applied for a loan modification. I knew that simply applying for a modification resulted in a ding on your credit record and as we spoke it became clear I was much worse off having waited for almost 15 months with no definitive and actionable response from Chase on a loan modification.

I had drained my savings, damaged my credit rating and spent countless hours chasing answers about how I might work something out with Chase to revise the terms of the mortgage. I knew I did not qualify for a HAMP modification but I also knew Chase had an in-house modification program; everything in life is negotiable if you can meet face to face with a decision-maker. I wondered if the Wall Street Journal might be able to get answers when I could not, and decided I had little to lose by participating in the article.