ConsumerWatch: Loan Modification Takes Years For East Bay Woman
BRENTWOOD (CBS 5) -- While foreclosures are on the decline in California, getting a loan modification is still a challenge. For an East Bay woman, no one seemed to pay attention to her case until she turned to CBS 5 ConsumerWatch.
For Julie Reichenbach, building an animal rescue business was a dream come true. But keeping it turned into a nightmare.
"I've always been good with my bills, paying on time, I've never had problems financially," she said.
That's because Reichenbach's animal rescue is funded by her successful pampered pet boarding business. Unfortunately, the property was funded by an interest-only loan.
"I was very adamant that I wanted your standard 30-year fixed rate mortgage," Reichenbach recalled. "And I don't know what possessed me to agree with her. I got roped into it and learned my lesson the hard way."
Like many homeowners, when her payments ballooned, she applied for a loan modification. Reichenbach sent in the requested documents, month after month.
But while she waited, her health deteriorated. And that's when her story takes a tragic turn.
"I had my leg amputated. And there was a message on my cell phone that my home was in foreclosure," Reichenbach said.
When she returned home from the hospital, she found a note on the door, leaving her and her dogs with only three days to find a new home.
"I think her case is in many ways all too typical, even though her own circumstances are quite extreme," said housing advocate Lisa Sitkin. She points out Reichenbach has a steady income and a medical hardship, both of which makes her the perfect candidate for a loan modification.
But even though she did everything the bank asked, like many, her modification fell through the bureaucratic cracks.
"They were telling her 'You know, send in your documents, we're considering you' and it looks like someone may even qualified her for something. And yet the foreclosure, once the train leaves the station and runs on the tracks and you don't get it stopped," Sitkin said.
But facing eviction meant a likely death sentence for her rescued dogs, something Reichenbach just couldn't accept.
She turned to CBS 5 ConsumerWatch, and on the very next day they contacted Reichenbach. "Wells Fargo called and they said we're sorry we made a mistake. We had a loan modification for you two-and-a-half years ago. It was never sent to you and we don't know why." she said. "So I have my loan modification, and the dogs have a roof over their head."
If you are facing mortgage troubles, you can find housing counselors through the Department of Housing and Urban Development (HUD) or Housing and Economic Rights Advocates (HERA). Homeowners are advised not to pay anyone to save your home from foreclosure.
(Copyright 2011 by CBS San Francisco. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)
