The Treasury Department reported last week that only 12 percent of eligible homeowners have struck new deals on their mortgages via the federal Home Affordable Modification Program, which is supposed to help troubled borrowers with loan modification plans.
The Criscione family wasn’t part of that 12 percent. Getting a modification on their second mortgage was a mass of red tape, unanswered queries and questionable responses from their lender, CitiMortgage.
John Criscione lost his job as a residential property manager in January. He started to hunt for work immediately and the family slashed expenses, but it wasn’t enough.
”We aggressively cut wherever possible and considered sale of all assets,” said Criscione, who lives in Somerset. ”Unfortunately, lack of equity in our home and vehicles eliminated that option. Payments on everything fell behind.”
The family of four relied on Sharon Criscione’s salary and John’s unemployment benefits while he searched for a job. Still, there wasn’t enough money to go around.
The family contacted CitiMortgage in early February in an effort to modify their $147,000, 9.75 percent loan.
”We spoke with loss mitigation specialists and sent in financial worksheets. We never received return calls or communications,” Criscione said. ”We remained persistent with our calls and at one point in April, we are able to defer two payments to the end of the loan.”
After researching mortgage modification guidelines on the federal website MakingHomeAffordable.gov, Criscione was sure the family qualified. Still, CitiMortgage wasn’t responding to the couple’s efforts.
Then things got worse. In early June, their 18-year-old son fell ill, seemingly overnight, and doctors said it was cancer. He was rushed to emergency surgery to treat a bleeding brain tumor. It was successful, but further tests found more masses around his body.
For two weeks, John and Sharon Criscione spent day and night in the hospital with their son. Everything else was pushed aside. They received a few collection calls from lenders, but the lenders gave the family some space when they explained their son’s health.
Then, a cell phone rang. It was a CitiMortgage rep.
”Barely able to speak, Sharon advised him that she was in the hospital with her son who has just been diagnosed with cancer, was receiving chemotherapy at the moment and that she had not been home in 12 days,” John Criscione said. ”She stated that she would send a payment in as soon as she returned home.”
Criscione said the rep insisted on a phone payment right then and there, said he’d call every day until they made a payment arrangement.
”We had been contacting CitiMortgage regularly at least every 14 days, but never received any tangible type of response,” Criscione said.
That’s when they contacted Bamboozled.
We contacted CitiMortgage and asked for a review of the Crisciones’ loan.
The next day, Criscione received a call from CitiMortgage. The company required more paperwork, but the rep gave Criscione hope that something could be done about the interest rate on the loan.
It took the entire summer, but CitiMortgage came back with a deal: a 23-year graduated rate loan with a balloon payment at the end. For the first five years, the interest rate would be 3 percent. The rate would then rise yearly through the eighth year, at which time the rate would be capped at 5.29 percent. After 23 years, in 2032, a balloon payment of more than $50,000 would be due.
“We are pleased to have arrived at a solution for this family’s situation, although we cannot comment on specifics due to privacy concerns,” said CitiMortgage spokesman Mark Rodgers.
Criscione said the deal lowered their monthly payment from $1,268 to $518 a month,
”Short-term, we just need to keep payments on time and keep food on the table. This modification definitely helps that goal,” Criscione said.
But they need to watch the long-term, too. The family will have a balloon payment of $50,000 in 2023, but they hope it never gets to that point. As their son’s health improves, John Criscione plans to get back into the job market. In time, as the family’s finances recover, they can refinance to a loan that doesn’t involve a balloon payment.
Criscione is still sending resumes out and trying to network, and he says he’ll find a job.
”In the meantime, I’m helping my son beat cancer. He needs me 24/7, and we expect to prevail,” he said.
CitiMortgage customers aren’t the only ones who have experienced delays like the Crisciones.
When loan modification programs were first announced, homeowners flocked to get help but many loan servicers were not yet equipped to handle the caseloads. Rodgers said Citi, along with the rest of the industry, experienced quickly escalating and unprecedented levels of borrowers needing assistance, especially in the first part of 2009.
While he couldn’t comment specifically on the Crisciones’ situation, that could be a reasonable explanation for the delays (though it doesn’t excuse the phone reps behavior when the Crisciones were in the hospital).
The process should go more smoothly today, now that lenders have had time to hire and train additional staff to handle modification requests.
If you’re having trouble with your mortgage, start at the MakingHomeAffordable.gov website. Use the self-assessment tools to see if you qualify for one of the many legitimate programs available to modify mortgages.
Also keep your guard up. If you see or hear an ad from “mortgage experts” who promise to help you with your mortgage, be suspicious. Not all offers are scams, but plenty are.
Beware of anyone who charges a hefty up-front fee for counseling (HUD-approved housing counselors are free), run from mortgage experts who pressure you to sign papers right away and start screaming if anyone suggests you sign your home/deed over to them as part of a program to prevent foreclosure.
Before you turn to an outside company, contact your lender and see what it can offer. Be persistent. Hopefully your lender will be more responsive than CitiMortgage was to the Crisciones’ initial requests for help. If not, let me know.