Family’s Loan Modification Troubles End in Success, For Now

In March we told you about Bevin Beckage, a mother of three who spent nine months wrestling with Wells Fargo over whether she qualifies for a mortgage loan modification. The bank repeatedly lost her paperwork, broke promises to stay in communication, and ultimately denied her a modification based on incorrect information.

After Credit.com’s investigation, Beckage’s case was referred to the executive office at Wells. After just three weeks that office gave Beckage the news: She qualifies. The modification will save Beckage $600 a month.

“I’m just so happy!” Beckage told Credit.com.

Wells gave Beckage a temporary modification under the federal Home Affordable Modification Program (HAMP). Beckage’s interest rate will drop from the original 6.5% down to 3.5% for the first five years. From there it will increase to 3.75%, and after seven years it will lock in at a new rate of 4%.

[Related article: One Family’s 9-Month Trip Through the Loan Mod Twilight Zone]

Beckage plans to use the money she’ll save every month to pay down some debt. After that, it will mostly go toward day-to-day living expenses.

“We want to take the kids to the zoo,” says Beckage, who has a five-year-old daughter and three-year-old twins. “It’ll just help us live comfortably for the month, pay off some debt and save for the kids.”

Her first time through the modification process, Beckage went through a 1-800 number at Wells Fargo. It was a nightmare. She would mail and fax forms to the bank, which regularly claimed never to have received them. Her application bounced between multiple departments, often getting lost somewhere between, she says. Bank mistakes resulted in her case getting thrown out three times, which meant she had to start back at square one.

Her experience with the executive office was completely different. People in the office never lost her paperwork. They called her back when they said they would. They were nice.

“It was the easiest, least stressful experience I’ve had with them. It was pleasant, actually,” Beckage says. “I would have been OK being denied because at least I was getting attention and it felt like they knew what they were doing.”

[Related article: HAMP grants fewer Home Loan Modifications in February]

Wells gave her a trial modification, and told Beckage it should become permanent in July. “So I guess that means it’ll be permanent, and everything will be fine,” Beckage says.

Actually, the reality could be a bit more complicated. As we reported here, 27% of trial modifications under HAMP fail to become permanent. Many homeowners whose trials fail to continue are stuck with interest payments that immediately rebound to their original rates, plus they have to repay any of the money they saved on interest while they were in the trial.

In a perverse twist, then, a program that was intended to rescue people from foreclosure winds up pushing some of them right into foreclosure.

“Oh really? I didn’t know that,” Beckage says.

We’ll stay in touch with Beckage, and see what happens in July. If she wins a permanent modification, or for some reason is denied, we’ll let you know.

Image: striatic, via Flickr