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Turning a lemon into lemonade

Anonymous • Oct 18, 2012 at 11:04 AM

Fred and Sue’s story is one of the most compelling examples of turning a bank’s unfair and illegal treatment of the homeowners into a well-deserved fantastic loan modification for them, saving them tens of thousands of dollars over the life of the mortgage. The controversy began when Fred and Sue missed one payment on their mortgage in June, 2010. Being conscientious of their responsibility to make timely payments, they immediately called their loan servicer, GMAP, offering to make the payment up and get back on track with their loan.

Not surprising in a world where it is profitable to foreclose, GMAP offered no solace to Fred and Sue when they called, instead telling them that they should not bother to send in the payment, or any more payments for that matter, as they would be returned, and it was going to file foreclosure. At that time, Fred and Sue’s loan balance was about $118,000, and their monthly payment, including escrowed taxes and insurance, was in excess of $1,000. Despite their willingness to pay on their loan, GMAP was true to its word and wasted no time in filing a foreclosure complaint against Fred and Sue, only months after the one missed payment. Unfortunately for it, it picked on the wrong people in Fred and Sue.

After two years of litigation, apparently growing weary of the fight, GMAP capitulated in its effort to take Fred and Sue’s home away, instead offering them a deal which will keep Fred and Sue safely in their home for good. That deal is nothing short of amazing. After not making a payment on their mortgage for almost 3 ½ years (approx. $42,000 in missed payments) Fred and Sue have been given a complete do-over with a new loan balance of $106,000 (reduced by $12,000) and forgiveness of over $22,000 in interest and late charges. Better yet, with an interest rate fixed at 3 ½%, Fred and Sue’s monthly payment has been cut almost in half, from $1,028, to $668. The net result is that Fred and Sue will save thousands of dollars on their mortgage but, more importantly, their home. Now that’s what you call turning the lemon handed them by the bank into lemonade for Fred and Sue. Can you do the same?

Note from the author: If you have questions or comments regarding this or any Foreclosure Story article, please visit www.mcgookeylaw.com.

Next week: The story of Alissa, whose successful foreclosure fight resulted in a reduction in her interest rate from 11% to 2 %, with a resulting reduction in her monthly payment from $2,650, to $1,036.

Copyright 2012 Daniel L. McGookey 

This is a weekly column by Sandusky attorney Dan McGookey, devoted to telling true stories of homeowners who have been victimized by a lending system that makes it profitable to foreclose. The names used have been changed for privacy purposes.

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