I recently complained about my inability to refinance my home loan, despite being reassured that I was approved, despite paying non-refundable fees to get the process underway, despite having perfect credit, verifiable income, no debt and no history of non-payment.
But now I’ve learned it could have been so much worse.
Dave Johnson writes at Alternet about the struggles of homeowners Norman and Oriane Rousseau, solicited to refinance their house, only to have the deal go bad when the mortgager, Wells Fargo, faked their signatures, their income, and even the interest rate and loan type they believed they were applying for.† After issues of “lost payments” that the Rousseaus could confirm and the bank denied, hidden fees, late fees and notices of foreclosures that went on and off for months, a series of harassing phone calls and a notice of eviction eventually lead Norman to shoot himself four days ago.
“In May 2009 the bank claimed the couple had missed their April payment. They proved they had made a payment in person at the bank, using a cashierís check and that the check had been cashed by the bank. The bank then claimed they had ordered a stop payment on the check, even though a cashierís check payment cannot be stopped,” writes Johnson. “The runaround began. The bank began harassing them for payment, sometimes as many as six-eight calls per day, sometimes even late at night. On August 3, 2009 the bank claimed the Rousseaus hadnít paid June or Julyís payments either, demanding $3,406.50. But then on August 8 the bank assured them they were current on payments. Then the bank again claimed it had not been paid and that the bank had been trying to contact them without success, and that they now owed $3,478,25.”
The Rousseaus soon learned that the loan they believed they were paying was entirely different from what they received — a loan loaded with prepayment penalties, unnecessary fees, and one that had them paying less than the amount of interest on the loan, making it reset and actually add to the cost of their debt.† The longer they continued to make minimum payments, the further they fell behind, and with the “lost” check they fell into a cycle they were unable to ever get out of.
The story is a reminder of the worst of predatory lending.† But what is most shocking is that it is still occurring without any oversight, despite knowledge that this has been going on for years, and that banks are continuing to refuse to admit error or change practices, no matter the circumstances.
Norman Rousseau killed himself prior to being evicted, giving up all hope.
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