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The chase continues for a Wamu/Chase loan modification

April 13, 2010, 8:40 am: I sent Olga Danilova an e-mail and copied Doris at CCCSDV, indicating all paperwork was received by Chase, my residency was no longer an issue, an appraisal had been submitted and I needed answers.

April 13, 2010, 9:15 am: Olga called in response to my e-mail. I asked if she was getting the numerous phone messages I’d left; she said she was behind and e-mail was better. Olga agreed to send an escalated e-mail to the underwriting department and see what was happening. She didn’t see any request for additional information. She alluded to a “drive-by” appraisal; I corrected her and said an interior appraisal had been conducted on 4/1/10. She seemed surprised and then said yes, she did see in the file that an interior appraisal had been requested but as of 4/10/10, it had not been received. I said I was very concerned about timing as these delays resulted in repeated requests for updated financial information and it was costly for me to copy and fax stuff again and again. Olga said she would call or e-mail me back with an update.

JP Morgan Chase email protocol but no answers…

April 13, 2010, 8:17 am: I called the Chase Home Lending Executive Office to confirm Olga Danilova really was my contact person; she was and I was dialing the correct number (888) 310-7995 ext. 2260. I got her e-mail address (Olga.x.Danilova@chase.com) and realized the e-mail protocol for JP Morgan Chase was first name, period, initial, period, last name, and if the employee did not have a middle initial the letter “x” was used. This was interesting information to be filed for future use but I needed answers now. Why was Chase perpetuating the predatory lending practices devised by Washington Mutual? Why wouldn’t Chase want to make this right and move on?

Hey Chase, should we burn the house down?

My home is priceless to me, but as of 1/31/10 the assessed value of my modest two-bedroom, one bath house is $159,800. I designed and built the all-wood, metal roof home and it is unique. Unique, however, does not mean saleable, or even rentable, as my realtor friend had made abundantly clear.   

In an all-wood home the possibility of loss by fire is a concern, especially after a raging fire destroyed 39 Avalon, NJ condos in December 2003. Coupled with an article I read about the importance of insuring properly for “replacement value”, I’d kept a close eye on my property insurance.  

By January 2006 I worried I might be under-insured and took a closer look at my policy. The replacement value seemed low and I feared that if my home burned to the ground I wouldn’t be able to replace it. I requested an increase to a dollar amount I thought was more realistic, only to get push-back from the insurer.  I pressed the point so Selective Insurance Company sent out an appraiser who set the replacement value at $285,000. This was still low in my mind, but in mid-February 2006 we compromised at a value of $425,000. 

I escrow my insurance and property taxes. Once comfortable with the replacement value on my home, I moved on, until I pulled the policy for review in December 2009.  I was stunned to find my home insured for $905,000, more than double the figure I’d reached with Selective. Of course the payee was Chase, and as I followed the paper trail I saw the folks at Washington Mutual had upped the value of my home on me. So now Chase thinks I’m living in a $905,000 house. Hey Chase, I love my home but in Avalon parlance, it’s a “tear-down”. Is that why you won’t work with me on a loan modification? Do you think I’m living large in some big house? I’m not. I’m living very small in my tiny home on the bay.

Chase Home Lending – thirteen months in a bad relationship

March 24, 2010: Today marks thirteen months since the day Chase/WaMu first received my request for a loan modification. Back in February 2009 I wanted to get in front of my financial situation. Having suffered a 50% salary reduction in May 2008, I was still employed and supplementing my income with a freelance job; by using savings I could make ends meet, but unless something changed, my savings would be depleted by February 2010. 

The responsible thing to do was to speak with my lender and renegotiate the terms of the loan. No reduction in principal, just a reduction in interest rate so I could ride this out until my salary increased. Since I had no other debt of any kind, was not underwater and the Chase/WaMu loan was my primary and only mortgage (no home equity loan or second mortgage), this seemed like a reasonable request. 

Reason, however, seems to have flown out the window at JP Morgan Chase. Although JP Morgan Chase employs over 200,000 people, not one of them including Chase Bank’s Mortgage Unit CEO, David B. Lowman can provide a straight answer or a loan modification. After thirteen months I’ve drained my savings, devastated my once decent credit rating and spent countless hours chasing answers, yet I can’t get anyone at Chase to meet face-to-face to resolve a loan work-out. It’s a predatory loan and a bad relationship. The resolution to a bad relationship is to walk away and put it behind you, but I can’t. This is my home, and I just can’t walk away.

Chase, what’s the problem with equity?

March 3, 2010, 8:45 pm:  Keisha Hackney phoned looking for payment. She told me I was denied because I had “the equity” and that I should list my home for sale; a modification was not available for me. I should liquidate my assets and pay up; consider a short sale. I will receive a denial letter and a letter with intent to foreclose. I was denied because I have “the equity” and I “should have refinanced or pulled all the equity out.”

Ms. Hackney had the unique ability to make having equity sound like I had the clap.

I asked if Chase merely serviced the loan and she said no, “this is an asset loan in the portfolio” (interesting, because I strongly suspected this particularly predatory Washington Mutual loan had been sliced, diced, repackaged as a mortgage-backed security and sold down the river.) I said I was going to make a payment March 5 but had been told it would not be applied if it was a partial payment; she confirmed this. I said I could commit to a full payment with late fees by April 5, 2010. She told me she would note in the file I “was not able to make a commitment at this time”. I said I was making a commitment but she would not hear of it. I ended the call.

Learning Curve

Throughout August, September, October and November I went to large banks and small banks, banks I’d done business with in the past (Wachovia, Citizen’s & Sturdy Savings Bank) as well as banks I’d only driven by (1st Bank of Sea Isle City & 1st Colonial National Bank), meeting with residential loan officers to explore any and every possible way to refinance. Could my parents co-sign? Could a friend? Could I do something with home equity against a house I owned? Maybe a reverse mortgage? I also met with mortgage brokers who promised the moon, only to be shot down or not even called back.

I went to my investment advisor to look at raiding my retirement savings and he directed me to his mortgage guy. This guy helped him out when he was going through a divorce and his wife had destroyed his credit – he was a miracle worker. The guy was sharp and professional but there were no miracles for me. His response:  “Yes, you have equity, yes you have assets, but the banks want to see income, it’s all about income and cash flow. You need to cut your losses and move on; there will be other houses.” 

A friend in Florida told me I had to talk to her mortgage guy, he was the best. He took all my information on November 13, 2009 and called back four days later. He said there was absolutely no one who would touch a loan of this size without a comparable salary; did I have any wealthy relatives or stand to inherit any money soon? His advice: “Stop paying your mortgage, now. Write your senator; write your congressmen, there’s going to be a revolution. Mail in your house keys and walk away.” I patiently explained to him that perhaps he wasn’t hearing me correctly. I was not underwater in the loan. I had equity, enough equity that I’d been denied a loan modification, I had assets; my credit rating was decent (701 Equifax, 706 TransUnion, 732 Experian) and I’d never missed a loan payment or even been late. I could drain my retirement savings and hang on, ride this thing out until things turned around and I got a good job again. His reply: “As long as you pay, they won’t play. Stop paying now. So what if there’s a tax lien. That will get their attention. They only address the squeaky wheel. You are not a problem so they won’t work with you, they won’t talk to you, and they’ll just string you along because you are a performing loan. They will bleed you dry and take every penny you have. They just want their money. Stop making payments now.”

But I couldn’t stop paying the mortgage. I had an obligation. Only bad people didn’t pay. Plus I’d ruin my credit rating and never be able to get a loan again. It should have occurred to me that despite my good credit rating, I couldn’t get a loan now, and besides, what did I need a loan for other than a mortgage? I didn’t finance new cars, boats or anything else. I didn’t buy anything new, and I wasn’t about to start. Credit cards weren’t important – I didn’t carry a balance with American Express and used it only for work; the only other card I had was my debit card. 

I met with more loan officers, mortgage brokers, neighbors and friends of friends. I asked anyone I knew to hook me up with a senior loan officer, bank CEO or board member, any introduction where I could meet face to face and work out a way to re-finance. I talked to a lot of people but I didn’t get a loan.

In all that time, from July to November, no letter from Chase/WaMu regarding a loan modification application, review or denial ever arrived. The only thing that arrived with resolute punctuality was the monthly mortgage statement and payment coupon.

Time Marches On

Phoned WaMu on March 6, 2009 at 9:00 am and spoke with Juan C. Per Juan, “WaMu is hiring and training people. They are getting about 150 requests a day. As of today’s date it has not yet been assigned.”  Juan estimated it would be reviewed by Friday 3/13/09 and suggested I call back then.

Phoned WaMu on March 13, 2009 at 9:20 am and spoke with Margie. Per Margie, it’s “going to be a 97-day turnaround from when the negotiator gets it” and it “should have been assigned.” Margie confirmed that nothing appeared to be missing and could not understand why it hadn’t been assigned; she then gave me a priority number to fax in my 34-page packet, even though it had been received already. When I asked her what a reasonable time frame was to follow-up, she said they would contact me within 48 hours and reconfirmed my cell phone number.

Faxed WaMu on March 13, 2009 the 34-page packet.

48 hours elapsed with no calls from WaMu.

Phoned WaMu on March 13, 2009 at 8:50 am and spoke with Kathy. The paperwork had been received on March 16, 2009 and forwarded to an “opener”. It goes to an opener first and is then assigned to a negotiator; that can take up to seven days (3/26/09). I pressed Kathy on what happened to my original submission, the one I mailed in, because we were losing time and each day counted; she said she would open up a Work Order for the original submission and indicated that once the Work Order was opened, they would contact me within 48 hours. Kathy said the whole process should take 30 to 60 days and that they were averaging 66 days.

48 hours elapsed with no calls from WaMu.

Phoned WaMu March 20, 2009 at 10:00 am and spoke with Kristen. Per Kristen, “on March 16, 2009, the packet was forwarded to C. H.” (an opener) for research and to be assigned. “Escalation is looking into what happened to the 2/24/09 submission.” I will either get a phone call or a letter in the mail regarding more info needed or that they are working on it. Kristen suggested calling in 3/31/09 to follow-up.

March ended with no calls from WaMu.

Inside The Box

Please explain:

In May 2008 my salary was reduced by 50%. I have supplemented my income with freelance work but am unable to obtain full-time employment at my original salary or supplement enough to reach my original salary and honor my mortgage obligation.

I continue to seek full-time employment at my old salary without success.

I am only able to make payments by using savings; those savings will soon be depleted.

I seek a reduction in interest and a modification to a fixed 30-year mortgage. This will enable me time to obtain higher-paying employment and allow my savings to last longer to meet my mortgage obligation. I have no desire to sell my home.  

I moved on to Number 10. “Would you prefer to keep your home or sell it?” I checked Keep my home.  Number 12. “Do you have any other loans on the home?” I checked No. I completed the remainder of the form, painting the best possible picture about how much my home was worth, how little I owed relative to its value and how frugally I lived. Then I gathered the requisite paperwork (a full 34 pages) and headed out to make copies and send my application by Certified Mail to WaMu Home Preservation. It was February 18, 2009.

On February 24, 2009 I phoned WaMu. The packet had been received. A file would be created, reviewed and checked for missing items. Then, a processor would be assigned. I was advised to call back in 7-10 days.

WaMu Cares

Searching here, searching there, searching almost everywhere – four long months of searching for another job, any job and on the eve of 2009, an actionable New Year’s resolution to redouble my employment search efforts – my current income (50% salary reduction) had put me back to what I earned in 1989. Sherman, time to re-set the wayback machine. An aside – the effects of underemployment are not just financial but psychological. It’s very depressing. That said, in the world at large unemployment was rampant and the fact I still had a job, even at a dramatically reduced salary, was something to be happy about. Put up and shut up. I worked as many freelance hours as I could but it became apparent that using my savings to supplement the mortgage payments was going to be a much longer term remedy than I’d envisioned. I needed a way to stretch my savings as long as possible so I could continue to meet my mortgage obligation while seeking more rewarding work. The solution: apply for a mortgage modification.

Washington Mutual had a web site with a Borrower Assistance Form and the notation “We’re in this with you. We offer options for resolving your home loan issues.” They offered a two page form that was easy to download and complete. The tone was upbeat and helpful, with phrases like “Thank you for taking steps to resolve your home loan issues!” and “We’ll contact you soon!” Even the mail drop was designed to ensure confidence and optimism: WaMu Home Ownership Preservation; yes – this was the solution I’d been seeking. Home preservation help was within my reach.

Numbers 1-8 on the form were the standard address, phone and account number sort of queries, while Number 9 asked: “Why are you having trouble with your home loan payments? Select all that apply:” The answer was simple; only one box applied to me: Reduced Income. The multiple choice section was followed by an empty white box titled: “Please explain:”    

So I did.

Chase the WaMu Bait & Switch

Even as I signed the modification with Washington Mutual I felt niggling questions…why was the payment so high? Over $6600.00 a month is an awful lot of money, but I guess that’s what I needed to pay to clean-up the negative amortization and improve my credit rating.

And we all know your credit rating is almost as precious as your virginity – it must be kept intact.

So pay I did. I paid the February and March payment not only on time, but added in extra money towards the principal. I was making decent money in my new job and aside from this mortgage, my expenses were minimal. I could actually see the loan amount getting smaller. This was a good thing. Of course all good things come to an end, although the end was more abrupt than anything I could have imagined. On March 25, 2008, my new employers informed me they had radically underestimated the operating expenses for the business and they simply could not afford to pay me, the sole employee other than a part-time clerical person, the salary I’d been promised. Effective immediately they needed to implement a 50% salary reduction. I’d been paid for March and had thirty vacation days, so I could get paid another month at full salary but after that, as of May 2008, my salary was cut in half. Not a wage freeze or a 10% or 20% reduction, but a 50% salary reduction.

With only six months in the job I knew if I started a full-on job search people would think I’d done something wrong and that I was a job-hopper or a problem employee. Not good. I had to suck it up, at least until September 2008, when, with a full year on my resume, it wouldn’t look so bad to seek a new job. I had some non-retirement savings, about $60,000, having sold a second home, so what I could do each month was supplement my reduced earnings by dipping into the savings, thus keeping the mortgage current, continuing to reduce the principal and improving my credit rating. And it actually worked, for a while. I took on more freelance work and in order to keep everything going, rented my home again for a summer month and even took in guests while I was in residence.

In September 2008 my official job search began, and I joined the ranks of countless 50+ year-old baby boomers seeking a senior-level, high-paying job. Something else happened in September 2008:

WaMu Assets Sold to JPMorgan in Record Bank Failure  

Sept. 26, 2008 (Bloomberg) — Washington Mutual Inc. was seized by government regulators and its branches and assets sold to JPMorgan Chase & Co. in the biggest U.S. bank failure in history.

WaMu became “unsound” after customers withdrew $16.7 billion since Sept. 16, the Office of Thrift Supervision said yesterday. Branches are open today and depositors have full access to their accounts, Sheila Bair, chairman of the Federal Deposit Insurance Corp., said.

The failure of WaMu, which has $188 billion in Deposits, ratchets up pressure on lawmakers to piece together a rescue package for the nation’s financial system. The government’s inability yesterday to reach agreement on a bailout and the seizure of the biggest savings and loan sparked a sell-off of bank stocks, led by a 27 percent tumble in Wachovia Corp…