Loan Mod Profiles: In Trial Limbo

Last fall, Wells Fargo told Michael and Concetta Acevedo that after a three-month trial, they could get a permanent mortgage modification that would allow them to keep their Staten Island townhouse.

Instead, 10 months later, the Acevedos are still making trial payments and fighting to save their home. The delays have dragged on even though a judge penalized Wells Fargo for errors processing their case. The Acevedos' trust in the bank -- and the modification process -- has run dry.

"I wonder if they have a little cube, and they throw it up in the air to see what decision they are going to make," said Michael Acevedo.

More than 1.3 million homeowners like the Acevedos have started trial modifications under the government's foreclosure relief program. Qualified homeowners are supposed to make trial payments for three months, but the vast majority of trials have lasted far longer [3], delaying both approvals and denials.

Despite pledges by banks and other mortgage servicers to reduce backlogs, 118,000 households have been in trials for at least six months [3]. Although Treasury Department officials have said [3] extended trials benefit people by providing temporary relief, homeowners and their advocates say long trials can hurt borrowers [4] by increasing the amount they owe, lowering their credit scores and leaving them with less money saved in case they lose their homes.

The Acevedos say they've done everything they can to make their house payments, even wiping out their savings. Michael lost his longtime job as an exterminator in early 2009. He eventually found work, but makes less money. Concetta continues to work as a home health care aide. Their 19-year-old son works at a 7-Eleven while going to college full time.

Since April, a Richmond County court judge has presided over monthly state-mandated foreclosure settlement conferences between the Acevedos and Wells Fargo. The judge has penalized [5] Wells Fargo for improperly denying them a final modification and not providing the written reasons for the denial as previously ordered by the court, according to Joseph Sant, their attorney from Staten Island Legal Services.....

http://www.propublica.org/article/loan-mod-profiles-in-trial-limbo

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