Foreclosure Stories: The gotcha game

Anonymous
Mar 15, 2012

 

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 which makes it profitable to foreclose. The names used have been changed for privacy purposes. This is the Kohl's Tale.

Due to extraordinary expenses, in September 2010 the Kohls fell one month behind on the mortgage on the home they built years earlier next to Mr. Kohl’s parents. Not wanting to take the slightest chance on losing the home Mrs. Kohl had laid the first brick to, and the only home their young daughter had ever known, the Kohls remained in close contact with their bank, GMAG and resumed making their regularly monthly payments in October.

    However, the Kohls struggled with their $1,400 monthly payment. Thus, it was in early 2011 when the Kohls reached out to GMAG for a loan modification believing, as millions of American homeowners do, that their bank, (who in reality is just a loan servicer) actually wanted to work with them in order to help them succeed in paying off their mortgage. Doing as they were told, the Kohls compiled all the financial information requested by GMAG as part of the loan modification process, only to be informed in June, 2011 that they did not qualify for a modification.

    Disappointed but not deterred, the Kohls continued to make the regular monthly payments, never once being told that they must make up the one payment they remained behind on, or face foreclosure. Then in October, 2011, the Kohls contacted GMAG to let it know that they were going to be a little late with their payment. In response, GMAG told them they would need to make two payments by the end of November; otherwise further payments would not be accepted. Again the Kohls did as they were instructed and made a double payment on November 30, 2011. Again, as with all their prior payments, GMAG accepted this payment without incident. The Kohls made yet another payment in early January, 2012.

    Then, for the first time in the history of their mortgage, a real threat of foreclosure surfaced. This came in the form of a letter from GMAG in mid-January, 2012, demanding that the Kohls pay approximately $5,500 to “reinstate” their mortgage, otherwise face foreclosure. Not only were the Kohls taken aback by the fact that the threat came without warning, but also by the fact that the amount demanded appeared to be almost double what they truly owed.

     Not having the reinstatement amount, the Kohls decided to simply stay the course  and continue making their regular monthly payment which they did in early February, 2012. Just several days later, the Kohls received a very nasty letter from GMAG, stating that, despite repeated attempts by it to collect payments from the Kohls, they had refused to pay. Of course, this was completely untrue as GMAG had not even indicated there was a problem, and the Kohls were making regular payments, the last one being only days before the letter.

    Frantic, the Kohls called GMAG the day after receiving the letter to find out what they needed to do to avoid foreclosure. At that point, they were informed that their case had been referred to an attorney for foreclosure. Again, they were offered the option of paying a reinstatement fee. When asked how much that would be however, the GMAG representative could not answer, only indicating the Kohls would get that information by way of a letter. Then, in late February the Kohls received a letter from GMAG’s attorneys stating that it would cost them almost $12,000 to reinstate their loan. This amount was double the amount quoted just a month and a half earlier, with that earlier quoted amount appearing to be double that which was truly owed.

     It was then that the Kohls contacted McGookey Law Offices. Seizing on the fact that we now had the name of GMAG’s attorneys, just last week we sent a detailed letter pointing out the background facts of the case and how those facts strongly evidenced violations of the Kohls’ legal rights. Because the attorneys have now been advised of the facts, I am extremely confident that this matter will be resolved to the Kohls’ great satisfaction without a foreclosure ever being filed. One big reason for this is that it is quite possible for the attorneys themselves to be held liable to the Kohls, should they proceed with foreclosure knowing that there are good defenses to it. The lesson in this story is this: At even slightest hint of trouble with your mortgage, use a proactive approach. Document everything, and believe nothing from the mouth of your servicer. Remember, because it is profitable to foreclose, oftentimes servicers play “the gotcha game,” looking for any excuse to foreclose.

   

Next week: The story of Trisha, whose government-owned loan was foreclosed on, in violation of the government’s own rules, rules which are regularly ignored with the government’s consent.

Copyright 2012 Daniel L. McGookey