For two years, Barry Lancett's effort to get a loan modification from Wachovia, then Wells Fargo, has consumed him.
The 55-year-old father of two physically shakes when he discusses his case and says the effort has distracted him when he should be focused on his job. In his crusade, he has accumulated mounds of paperwork and saved numerous recordings of his conversations with bank representatives.
His ordeal, which follows the arc of the housing boom, shows how complicated modification efforts can become - and how they can be trumped by foreclosure proceedings.
In 2006, as a Wachovia mortgage loan officer in Florida, he transferred with the company to Charlotte. Thinking he was on a successful track, he and his wife, Jenny, bought a $439,000 home in Waxhaw, using a Wachovia interest-only loan that did not require income information to qualify.
The family's finances began a downward spiral in late 2007, when, he says, he was fired by Wachovia for not selling the required amount of Pick-A-Payment mortgages. These were the adjustable-rate loans that later hemorrhaged losses for the Charlotte bank. He says he was soon burning through his 401(k) to keep up with mortgage payments and other debts. He took jobs at other mortgage companies, but he wasn't able to make up lost income working only on commission amid the recession.
In fall 2008, before he had missed any payments, Lancett says he wrote Wachovia asking for a restructuring of his mortgage and that the bank turned him down.
He said that in late 2009, he tried again after he started missing payments. He received a modification offer dated Dec. 21, 2009, that lowered the interest rate on his $320,000 loan to a fixed 2.75 percent, according to a letter sent to him by the bank. After a delay in receiving the paperwork, he signed that agreement Feb. 5 and returned it.
But Wells soon sent him a second modification offer. This one had a "step-up rate" that would lower the rate to 2.75 percent but raise it in later years.
When he called to ask about the second offer, Lancett said a representative told him the first one was a mistake, and he had to sign the new agreement or start the process again. He signed that one on March 17 but made monthly payments under the initial offer for March, April and May.
Lancett said he noticed that his payments weren't being applied to his balance, and in June he received a letter saying he was in default. He owed Wells $8,724.97. "That's when I started to lose it," he said.
He called the bank but says he had trouble getting anyone to answer questions about his modification. Eventually, he said he was told that he didn't properly date a page in the second modification. He didn't send in his next payment because he wanted to get things straightened out first.
In August, he got a foreclosure notice, which set a hearing for Nov. 3. Lancett told the Observer about his situation, and the paper contacted Wells. The bank's "Office of the President" then called Lancett, and an executive mortgage specialist, Dawn Nelson, agreed to the original modification Lancett signed Feb. 5, according to a letter the bank sent him.
The foreclosure hearing was canceled.
He has started making monthly payments of $1,728.19, including taxes and insurance - down about $200 from his original payment. A new snag came last month when Wells sent him a letter saying he owed over $1,000 in foreclosure-related fees, which he says are unjustified.
When he called about the fees, a customer servicer representative told Lancett that he needed to send a written complaint to another department. He then reached Nelson in the Office of the President and had a contentious conversation that he taped. Nelson told him that he never should have been offered the modification he ultimately received and hinted the bank could still "undo" it. "We're not going to talk anymore," she told Lancett.
On Monday, Lancett was surprised to get a call from Nelson. The bank would take care of the foreclosure fees, fix his escrow account and make repairs to his credit report, she said. He still wants the foreclosure notice expunged from the public record but was told he needs to talk to the attorney who handled the proceeding.
"It's moving in the right direction, but it's still not over," Lancett said. He said it's impossible to understand the stress he's been through over the past two years. If the Observer hadn't contacted Wells, he said he believes the bank would have foreclosed on him.
Vickee Adams, a Wells Fargo spokeswoman, said the bank has "great empathy" for Lancett's situation and has given him "very comprehensive service."
Continuation Article About Barry Lancett's & others problems at The Observer: