Why Haven’t You Paid Your Mortgage?


By Sherry Hernandez, Author and Member of Occupy San Pedro

An Excerpt of the is was originally published in Random Lengths News, Jan. 26, 2012

I sat in the lawyer’s office in the chair across from his massive desk as he asked me “that” question. “Are you behind on your mortgage now?”

“Yes,” I answered.

He raised a disapproving eyebrow as he looked down at the papers on his desk and shuffled them around.

I’m used to this response. People who didn’t buy a home during these years don’t understand.

In the past, these stories had been about lost jobs and poor planning, but today most of the stories involve some dishonesty on behalf of the lenders. And, because lenders have established a reputation over the years of operating with integrity, people have a hard time believing that they are capable of this degree of duplicity.

“You signed the 50 page mortgage contract. No one forced you.”

The contract was actually 375 pages, (yes, I counted). We were already working under an escrow extension. There were no brokers, real estate agents or escrow officer present, only a notary. We had a reasonable expectation that the loan we were signing was the same one we had spent a month discussing on the telephone with the loan company.
We worked long hours. We didn’t have the time for real estate school, also. We had to be able to trust the professionals who have a fiduciary duty to disclose all the risks and responsibilities.

We were unfamiliar with that type of loan, which was why we specified that we wanted no prepayment penalty, but our agreement was not honored. Hidden within the 375-page documents was a 3-year prepayment addendum.

We called the sales manager and reminded him of our agreement to waive a prepayment penalty. He informed us that we needed to add a prepayment penalty. Couldn’t we at least agree to one year?  He asked us to “go ahead and sign it” we will honor it as one year. He was the sales manager for two Countrywide offices, we believed his word, but we made the notations on the contract, nonetheless, to reflect what we had discussed. We changed the 3-year paragraph to 1-year and made a notation at the bottom naming the sales manager of Countrywide who authorized the change.

One month after the loan was secured Countrywide raised the interest on our first loan from 7.4 to 8.5 percent and on the second loan from 7.5 to 13 percent. Our monthly payment increased by more than $600. The mortgage company had told us we didn’t qualify for a 30 year fixed at 7.5 percent, yet after they set the standards, they raised us to 8.5 percent on the option adjusted rate mortgage that was supposedly a better loan than the conventional loans.  It didn’t make sense.

Today banks are going to court with fraudulent documents to take people’s homes and instead of prosecuting them for their previous fraudulent actions, our government and courts are still letting them proceed with this, making countless families homeless and causing immeasurable damage to people’s lives.

Still, the home buyers are supposed to be acting in integrity. We are not supposed to be influenced by the fact that these top line executives are making million dollar bonuses for their fraudulent behavior and we are the ones footing the bill.

The lending institutions want us to feel “shame” at our situation and yet they have the hubris to feel no shame for leading our nation into financial ruin.

In April 2006, the Department of Corporations wrote a memo to all Corporations tagging prepayment penalties as fraudulent and predatory lending practices. Even then, Countrywide held us to a 3-year prepayment penalty to which we we did not agree.

We refinanced in 2008, the refinance cost us $75,000 more than the original loan because of the problem with the prepayment penalty. We knew the new loan was only temporary. We needed something to get out from under the 8.5 percent and 13 percent interest rates given to us by Countrywide. Our intention was to pay off the second and roll everything over into the first.

Countrywide profited from their little “error” and we paid for their “error.”  We filed a lawsuit in hopes of retrieving the money they had stolen from us. That was more than four years ago, we are still waiting.

So, why is our mortgage payment behind?  That is the initial question, the question those who do not know always ask. Why?

In 2008, Countrywide Home Loans made an $8.6 billion settlement for mortgage fraud nationwide with $3.5 billion going to California borrowers. Case #LC083076. But borrowers have yet to get  relief.

In spite of the numerous settlements by lenders, the bankers were still instilling us with the propaganda that it was the irresponsible home buyers who got us into this mess.

We refinanced with Best Rate Financial, they sold our loan to CitiMortgage.

In December of 2009, CitiMortgage called us and asked us if we would benefit from a modification. Our property value had dropped more than  $150,000 and we could not sell. We had already been waiting for our day in court for over 2 years, so hope of recouping our losses were a distant possibility.

We agreed to participate in the modification program and we hired a law firm to supervise the process.

We had already heard the horror stories about others who had been deceived in the modification process and we wanted guidance along the way. We hired American Law Firm to be our modification counselors at a cost of $2,500.
Four years after having been cheated, our house payments were still being paid on time. Four years later, we still have not made it to court.

In April of 2010, in a 3-way conversation with CitiMortgage and American Law Firm and myself, they informed us that we initially qualified and that our modification should be completed in about 30 to 60 days. Help was on the way!
By August of 2010, we still did not have the modification.

So the question on the table is “Why are you behind on your mortgage payments?”  When what the question should be is “Why are these bankster allowed to get away with breaking the laws?” or “Why don’t the banks have to keep their word?”

In November 2010, they assured us they were just days away from an answer regarding our modification. We told them of our pending trail date and that we would be late with December’s payment.

CitiMortgage told us that they would not have an answer for us until the January regarding our modification.

Then on January 28th they sent us a letter telling us that they were going to give us a temporary 3-month modification while they reviewed our case again.  Halleluiah!  We were saved!  We immediately sent in the first modification payment as laid out in their letter.

Yes, we had been late on our payment, but now we could pay on time with a clear conscience. We had hope again. Everything was going to work out. We did not yet know the attorney had run out on us, we did not yet know that Citimortgage was lying.

“Why are you not paying your mortgage?”  “Do you think that it’s fair that you don’t pay?”

They ask us this while the news is inundated with documentation of fraud and excess spending on behalf of the corporations. They ask us this with allegations of bribery and corruption flooding the news.

We paid our modification payments on time for two months. We didn’t stop paying because we wanted to, we stopped paying because CitiMortgage sold our loan (for pennies on the dollar) to PennyMac before the three months was up. After our second payment we received a letter from CitiMortgage informing us that our loan had been sold to PennyMac. We were to make no more payments to CitiMortgage and to wait until we heard from PennyMac. We have this in writing.

When PennyMac contacted us, they informed us that they were not going to honor the temporary modification issued to us by CitiMortgage, nor did they count the temporary modification payments as “payments.” They informed us that we were now in arrears on our mortgage.

This is why we, and so many other honest hardworking Americans are behind in their mortgages. We have been duped by Mortgage companies that consider us,“securities,” and not people.

As recently as December 21, 2011, Countrywide settled a lawsuit with the government regarding mortgage fraud. They were accused of targeting minorities and rather than be found guilty in a court of law, they settled for $335 million. What does that mean to the home buyers who are being led into the foreclosure mill?

These corporations have not JUST robbed us of our homes, but they have robbed us of our credit rating, our dignity and our ability to move freely within the public market to conduct business and support our families. They have robbed us of our trust.

And they are allowed to get away with it.

The question was, “Why are we behind on our mortgage?”  The question should be, “Why aren’t these banksters in jail?”


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