Posted on 01/03/2010 5:49:07 AM PST by Kaslin
Dear Bank of America;
Hi, it’s me, your customer Austin. I’m writing to schedule my mortgage default.
That’s right, I’m ready to schedule my mortgage default. Does that sound strange?
Well, believe me, Bank of America, I had hoped that our relationship wouldn’t come to this. But after months of trying to do business with you, I’ve decided that it’s probably in my best interest to just, you know - “walk away” from my mortgage.
How could it ever be in anyone’s best interest to default on a mortgage? And why would anyone ever want to default on a mortgage?
Well, here’s the deal: I have one of those now-famous “Option ARM” loans on my residence – the interest rate is adjustable, and the loan provides optional payment plans. And yes, Bank of America, you inherited my loan when Countrywide Lending went down the tubes in 2008, and you merged your company with theirs.
And here are some other details about me, Bank of America: I am fortunate to have a great job with a solid income, and I work under a long term employment contract. While my full time occupation is being a daily talk show host, I am also a writer and a public speaker, so I have multiple streams of income. I own real estate in multiple regions of the U.S., and I’m a big believer in real estate as a long term investment. And perhaps most interesting for you, Bank of America, I have a great credit score, and I’m current on all my debt payments.
During the recent real estate “boom,” I took some equity out of my home. Now, in the aftermath of the real estate “bust,” my house is slightly “under water” – not by much, but a little. And the interest rate on my loan won’t begin to move upward for another two years, so I’m not in any crisis right now.
The value of my property has actually begun to move upward a bit in the past few months, but it’s going to be a few years before the value reaches parity with my debt. And that’s why I was thrilled to get that little note you sent me in the mail last summer, Bank of America. Remember? You sent me that nice letter asking if I’d like to have my loan modified to a 30 year, fixed rate mortgage.
I responded quickly to that letter, Bank of America. And I’ve called repeatedly for over half a year. But here’s the sad truth that I’ve discovered about you: you’re not really interested in working with me, because I’m not behind on my payments.
With each and every call, Bank of America, I get the same treatment. Once your customer service representative checks the data base and realizes that I’m current on my payments, they “transfer my call” to “another department” – and from there, I’m left on hold. If another representative picks up, they want to transfer me again. And if I actually have a conversation with anybody, I’m treated to a person reading through a litany of “assessment questions” and surveys and evaluations. And then I’m transferred again.
After repeatedly being told that there is immediate help available to Bank of America customers who are delinquent, I finally started asking, “so will you talk to me about a loan modification if I stop making payments?” And to that question, I’ve repeatedly heard the same answer: “I could never advise you to not make your payments Mr. Hill” the representative will say, “I’m just telling you that if you become delinquent we have help available…”
I’m not the only person who has this disturbing kind of relationship with you, Bank of America. I discussed this on my talk show in Boise, Idaho, and was inundated with calls and email detailing the same sad story. I even addressed this over the holidays on a radio talk show where I was guest hosting in Phoenix, Arizona – one of the most tumultuous real estate markets in the country – and got the same response.
I’ve also talked with lots of personal friends about this, Bank of America. People from Los Angeles to Chicago to Washington, D.C., and from all walks of life. People with high school diplomas and M.D.’s and MBA’s and Ph.D’s and J.D.’s. We’re current on our payments, have great credit, and want to continue our relationships with you. But you’re not taking our calls.
It’s sad to realize that as you focus on your “troubled assets,” and ignore those of us with good credit, you’re likely creating more troubled assets in the process. But that’s the system you’ve put in place, Bank of America. It’s a system that rewards people’s bad behavior, while punishing other people’s good behavior.
So after spending half a year trying to take advantage of the offer you extended to me in the mail, I now understand what your actual system entails. And I’ve calculated the risks of working within the system you’ve put in place.
I’m ready to schedule my default. What would you like to do next?
Banks that took welfare money from us should not be allowed to have any recourse should any of their customers default on any debt payments.
Yep, Austin nails it! I have excellent credit and have never missed a payment, and tried to talk to my mortgage holder about refinancing at a lower rate and was wholly ignored.
Whatever banks low rate offered to defaulters, should also be offered to those current on payments.
During those six months we had no less than three agents at Citi supposedly working with us. We were never informed when one of them left the company and so several weeks would pass. Then we would get a letter saying the current agent needed some information, information which we had already given to the previous agent but was lost in the transformation of agents.
Finally around Decemeber 15 we received another letter saying they needed a copy of our latest 1040 tax return. This would be the third time we faxed the stuff to them. We went ballistic.
Instead of sending them the data again, we requested a payoff statement and paid the mortgage off completely. You can imagine the surprise when the agent (and his manager) called and asked why we had not sent the 1040. YOU PAID IT OFF????
We still chuckle about it. Fortunately we had the resources to do so without any real material damage to our finances. We will take the mortgage payment amount and put it back in the funds we sold to pay it off. It will take about seven years to replenish them and we were not receiving much in the way of dividends from them anyway.
And consider the $$$ hundreds more paid in interest each month by those never missed a payment...
I responded quickly to that letter, Bank of America. And I’ve called repeatedly for over half a year. But here’s the sad truth that I’ve discovered about you: you’re not really interested in working with me, because I’m not behind on my payments.
My experience is not that different, although unlike the author I was not a speculator so I chose a 15 year fixed. I have put extra into my payments (50% extra at the beginning) to try to stay above water. I am trying to work a refi with Citi. If it works out, great. If not, I will keep paying at 6% interest which isn't too bad. I fail to see why either I or the author is entitled to anything.
I was (finally) not ignored, so you should try again. I am not sure they will grant the refi since I am just barely above water (less than 5% equity), but if they do, that will be a nice bonus.
I am working with Citi and so far I have had two agents, but I am still trying.
The problem is these big banks. They don’t give a damn and I won’t have anything to do with them. I have an excellent rep with my local Credit Union which serves a couple counties only. First name basis with the loan department for my home loan, boat, motorcycle, car loans or whatever, I always go through them. They’re very stable, low interest rates and don’t charge outrageous fees on anything.
Same thing with credit cards. If you pay on time and are never late they won’t work with you but will raise interest rates anyway. Banks seem like their own worst enemy.
I think I see the problem. Because there are politicians that mandated free stuff (in this case easier terms) for people who are delinquent or in fact just dead beats, then it isn't fair that those of us who were diligent get nothing.
The problem is that is a very slippery slope and there are a lot of socialist politicians who would like us to be on it.
Mark
They make money up front on refinancing fees. Also find out if they really own your mortgage or are just a servicer.
BoA repaid their TARP which they were strong armed into taking anyway (as well as being suckered into taking over Merrill Lynch)
They should be “allowed” to run their business any way their stockholders and customers agree with. If you want to chime in, buy BoA stock.
You can add Wells Fargo to the ‘only if you’re delinquent’ list.
Don’t get me started on Bank F America(NOT mispelled).
There website is as complicated to navigate as their phone system. Last week, I spent an hour on the phone trying to get somebody to explain how to fix a scheduled payment that they did not enter. Five people - including one supervisor - later, I finallly gave up and fixed the problem myself. But not before, telling the supervisor to sell my mortage to someone who knows what the h$ll they are doing. Bank F America sure doesn’t!
You have made a good point, I was thinking how much more $principle one could pay down if all that extra wasn’t going to bankers as %interest
A lower interest rate puts more money into the economy(you had 155 dollars more to spend) and also doesn’t allow you to deduct as much mortgage interest off of your taxes.(read more money for government) The push for this is coming from the US government.
Should just plan a short sale... keep the paperwork to a minimum and with a lawyer offer the option of shortsale or foreclosure. The lenders are not going to do anything that helps anyone in anyway.
Man up and pay up. Nobody put a gun to your head and told you to go out, get an ARM and then use your house as an ATM.
I wish they would bring back debtors prisons. (not defending BAC here as they, too, should have gone bankrupt and broken up, not given my tax dollars for bonuses to reward failure)
There is such as thing as responsibility. This guy is a looter, no different than a welfare queen in my book.
btt
There’s a couple of possible reasons why they contacted you. First, they may actually still own the mortgage. By refi-ing you out of it, they probably wrote you an FHA or other government backed mortgage, which they would then sell to an investor, as it is “risk-free.” They were able to get your mortgage off their books and free up capital and shift your risk to Uncle Same. Another possibility is that your mortgage was part of a group they purchased in bulk at a discount from a failed institution and they were able to book a profit on the refi. Either way the risk is being shifted to the government and the profit is being taken by the bank. When they sell your mortgage, they hedge it in the market and usually make another 200 basis points, as well as all the fees and points they charged you for refi-ing. Everyone wins except for the government in the event you default.
That’s the advantage of using a small local bank, if you can find one.
We recently refinanced our home and consolidated a couple thousand dollars’ debt with it. Got the term down to 15 years, plus the sum of our payments was actually less than the debt/mortgage payments were before.
We didn’t even have to have an appraisal...just brought in some pictures of our house. Pretty simple.
“If it works out, great. If not, I will keep paying at 6% interest which isn’t too bad. I fail to see why either I or the author is entitled to anything.”
I’m with you...I simply don’t take out STUPID LOANS and then whine when banks won’t bail me out. If adjustable rate mortgages didn’t exist, there would have been no bubble, no bank bailouts, no huge deficit, and probably no Obama.
I’ve had 4 mortgages now (on 4 houses). The first one was at something like 9% interest. Rates came down, but even so, I did not refinance...instead I simply dumped all of my spare cash into the mortgage and had it paid off in 4 years (wasn’t that big of a mortgage).
The reason that I don’t refinance is that I don’t like filling out more forms than necessary and having my personal information bouncing around all these places (and, in some cases, getting thrown into dumpsters). I also don’t like giving these paper-pushers any more of my money than necessary...so when I didn’t like my interest rate, I just paid the damn thing off.
I also get tired of conservatives complaining about banks and credit cards. What are we, a bunch of cry-babies, like the left? If you don’t want to deal with a mortgage either rent or save up to buy a place. If you don’t like credit cards, don’t get them (or get them and pay them off each month, like I do). Life isn’t that hard, providing that you still have a job...but some of us just need the drama, I guess.
Let me guess.
You're a responsible, White (mean-spirited), middle-class male who has worked hard all your life.
You no longer have any rights.
A neighbor of mine got in deep. Bought at the top and was paying a $4,500 per month payment. They actually put the house up for a short sale before the bank would talk to them. Got about a $200,000 reduction in their mortgage.
A neighbor of mine got in deep. Bought at the top and was paying a $4,500 per month payment. They actually put the house up for a short sale before the bank would talk to them. Got about a $200,000 reduction in their mortgage.
Which banks did that? Do you have a list?
“You can add Wells Fargo to the ‘only if you’re delinquent’ list.”
I can agree to that one. I did a short sale with them and it wasn’t until I was two month’s delinquent that they started to move along with the short sale. Thank goodness that’s all done now!
You are awesome - wish I could do that too! Congrats on paying that all off; I’m hammering away at my mortgage and hope to pay off two other small debts early this year asap.
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