Charlotte's Bank of America and Wells Fargo, which bought Wachovia, are the nation's two largest mortgage servicers, handling more than one of every three home loans. They have hired heavily to handle loan aid requests, but problems persist. Carolyn Jones, was shocked last month to find a foreclosure notice on her front door.
After being laid off from a job of more than 25 years, Carolyn Jones decided to relocate from her native New York City to the less expensive Charlotte area.
She figured the proceeds from selling her house would mean a small mortgage on a new house, with payments affordable at a lower wage. That was two years ago, as jobs and home values evaporated.
Jones wound up with a $200,000 mortgage on the $343,000 Concord house she'd agreed to buy. That was more than double the debt she planned on, before she had to cut nearly $100,000 from the asking price on her N.Y. home.
Jobs were scarce, and pay lower than she had imagined. In December, after being laid off again, she applied to Wells Fargo for reduced payments.
The bank gave her what's called a forbearance, suspending her $1,440 monthly payments through April. Jones recalls asking repeatedly when she would have to repay the money. She says she was assured the unpaid amounts would be added to the end of her mortgage.
In February, Jones landed a job as a customer service rep. Her pay is down about two-thirds from her N.Y. levels.
She would probably need an extreme modification to reduce her payments to an affordable level, based on an Observer review of paycheck stubs she supplied and the basic modification guidelines.
In March, the letters from Wells started, demanding she repay thousands in payments that had been on hold.
Jones can't get an explanation of why the letters started while her payments were suspended, why the unpaid amount isn't being added to her mortgage and why she can't get a modification. She's frustrated that she's sent reams of paperwork, but Wells continues using incorrect income and expense information to calculate her eligibility.
It's unfair, Jones said, to give people a break that leaves them worse off.
"There's no full disclosure," she said. "It's not right."
Last month, she arrived home to a foreclosure notice on her front door. Her house is scheduled to be auctioned on Aug. 31.
Wells Fargo, speaking in general, said in an e-mail: "We work for months to find workable solutions to help our customers and we understand the economic challenges facing many homeowners. We consider foreclosure an action of last resort; unfortunately it is not always preventable."
Stella M. Hopkins