Loan Modification Helps Family Stay In Home
by admin ~ March 15th, 2009.A Brentwood family who bought their home at the top of the market gets a loan modification, thanks to a persistent ConsumerWatch volunteer, who helped them through the process. Carolyn Flanery and her husband Bill bought their dream home in Brentwood back in 2005 for $605,000, when the real estate market was booming. They put down 20% of the purchase price, and to start, got a 5-year interest only mortgage, with a payment of about $3,300 a month. Affordable at first, but those mortgage payments became a problem late last year, when Bill, a plumber, was out of work for four months because of a knee problem, and Carolyn’s freelance work dried up. “January, I couldn’t pay the mortgage until the the 25th of the month,” Carolyn said.
To top it off, the value of the Flanery’s home was plunging. A similar home in their development was listed for $319,000, about half of what the Flanery’s paid. But, one thing went right. The Flanery’s got in touch with Gerald, a CBS 5 Consumer Watch volunteer, with a background in consumer law. Gerald called a representative at Citibank, the company that now owns the Flanery’s mortgage, and asked for a home loan modification. A few weeks later, the bank came back with an offer. The Flanery’s say Citibank offered to reduce their interest rate to 4.625%, but only for two years. “When you calculate it all out, it was only going to save us $200 a month,” Carolyn Flanery said. The Flanery’s turned it down.
Next, Gerald went straight to the top. He called Citibank’s corporate headquarters in New York, and laid out the Flanery’s case to a company vice president. “I told her the reason Citibank had received billions from the federal government was to assist people like this,” he said.
About a week later, Citibank came back with a better offer. According to the Flanery’s, the new deal reduces their interest rate to 1% for a year, then gradually raises it to 5.1% over five years. All in all, it’s a 40 year deal that covers both principal and interest. This time, the Flanery’s said yes. They’re also saying thanks, to Gerald and ConsumerWatch. “I don’t think this would have happened without him. It’s great, and I’m so thankful,” said Carolyn Flanery.
So, why did this request for a loan modification work? Gerald said he presented a clear and factual case to the bank, something homeowners in distress often find difficult because emotions are running high. Citibank wouldn’t comment on the Flanery’s case, citing privacy concerns. But the bank did provide a step-by-step guide for distressed homeowners.
Category: Featured Articles, Foreclosure news, Mortgage News, foreclosure prevention | Tags: Consumer Watch, home loan modification