Foreclosure Prevention
— David Jenkins,* Homeowner, Bedford-Stuyvesant
In early 2008, Bridge Street’s Tami Aikens began counseling David Jenkins,* who owns a two-family brownstone in Bedford-Stuyvesant. When they met, Mr. Jenkins had been paying his home mortgage for more than 10 years and working for the city for more than 20. In 2007, he had decided to refinance—for the second time—and he arranged the refinancing through a friend, a mortgage broker.
Mr. Jenkins received about $30,000, which he used to make some home improvements and to pay off a car loan. His friend told Mr. Jenkins he only had to stay in the new mortgage for a year, and then he could go into something with a more affordable monthly payment.
“What his friend did not tell him,” says Ms. Aikens, “was that the refinancing was for an adjustable rate mortgage.” On his old mortgage, Mr. Jenkins paid roughly $1,500 a month. With the new mortgage, he began paying $2,500 a month. At the time, he was working a lot of overtime, so he had additional income. But his overtime stopped about six months later—around the same time his mortgage adjusted to $4,500 a month. When he tried to renegotiate the mortgage, his friend told him he couldn’t get out of the program yet.
That’s when he came to Bridge Street. “He was about a month behind on the mortgage,” says Ms. Aikens, “and he had no idea of the type of mortgage he had.” The contract was clear, and his mortgage broker had done nothing illegal. But one reason Mr. Jenkins didn’t understand his mortgage is that his lender had not explained all the things he was getting into. Worse, “They told him he didn’t need his own lawyer at the closing,” Ms. Aikens says. “They said, ‘We’ll have a lawyer there.’” And Mr. Jenkins signed what they advised him to sign.
“This is a typical maneuver by a mortgage broker,” says Ms. Aikens. (See sidebar, “Improve your credit.”) And although the contract was legal, the mortgage was the wrong type of mortgage for Mr. Jenkins. Once the mortgage adjusted, the monthly payment was much too high for him to handle.
Together, Ms. Aikens and Mr. Jenkins tried many approaches to the lender, repeatedly asking to join a special forbearance program. “Finally, they put us into a forbearance program, and we complied with all their payment terms for five months and were supposed to get a modification after six months,” Mr. Jenkins says. “But they said we hadn’t complied—even though we had certified receipts for all the payments. We sent them again, and they eventually found the missing one, and they still backed out of the loan modification.”
“They said, ‘We understand that you did it correctly, but there is nothing we can do,’” Ms. Aikens says. She even sent inquiries to everyone she knew in the Center for NYC Neighborhoods, a non-profit legal group created to coordinate and expand services to New York City residents at risk of losing their homes to foreclosure. But she couldn’t get anywhere. “Two years of work. And each time I think we’ve crossed the bridge and done everything we need to do to get things turned around, my mortgage broker has refused to renegotiate the loan,” says Mr. Jenkins.
Everything stopped, according to Ms. Aikens, until February 2009, when Mr. Jenkins’s lender signed up to participate in the new federal hasp program (makinghomesaffordable.org) that was scheduled to go into effect in early March. Finally, Mr. Jenkins and Ms. Aikens could move forward. “At the end of February, we had to submit a hardship letter, two years of tax returns, and the last three months of pay stubs for him,” she says. His account is now under review.
Every other week, he comes into the office, and they call the lender together. “I’ve authorized Ms. Aikens to speak for me, because they’re often very nasty and very rude,” says Mr. Jenkins, “and they try to upset you. I was quick to lose patience with them. Now, I just say, ‘Speak with my counselor.’”
His lender recently sold Mr. Jenkins’s mortgage to a group of investors. So he and Ms. Aikens are waiting to learn if the group is willing to renegotiate. “If they are, then for the first six months, they’ll charge him a lower amount,” says Ms. Aikens. “If everything works well, the rate will go up maybe half a percentage point.”
Eventually, if Mr. Jenkins qualifies for the federal hasp program, then after five years, he can apply to refinance his mortgage at a lower rate. That is his ultimate goal: to refinance with a bank. “My lender refused to help me until the President came out with these new programs, which they get money to be part of,” says Mr. Jenkins. “I’m looking forward to refinancing with a bank, because I want to leave this lender behind. Eventually, with Bridge Street’s help, I’m going to do just that.”
If you have more questions visit http://www.knowthefactsbedstuy.org/
* Not his real name. Since his loan refinancing is still in progress, Mr. Jenkins prefers to remain anonymous.
