ConsumerWatch: North Bay Couple Battles For Loan Modification
MARIN COUNTY (CBS 5) – It’s not every day homeowner’s march to their banks demanding a loan modification. But a North Bay family says it’s the only option they have to save their home.
Homeowner Jerome Loston said he and his wife have been trying to get a loan modification for eight years. According to the Loston’s, the battle for a loan modification began in 2004 when they took out a mortgage from World Savings bank.
“We told them we needed a 30-year fixed mortgage including our property tax and insurance,” Jerome Loston said.
But when the Loston’s made their first payment mortgage that’s when they noticed something was wrong.
“I saw that there was no principle reduction,” he said.
Within five years, their mortgage monthly payment jumped from $1,800 to $4,200.
“We knew that this was not what we asked for,” he said.
Like thousands of homeowners, the Loston’s were given a “Pick a Pay” loan from World Savings Bank – a loan associated with predatory lending.
According to housing advocate Elizabeth Letcher, banks such as World Savings and Wachovia often took advantage of these loans by offering homeowners the option to pay low monthly payments. But in reality, Letcher said those payments skyrocketed.
“They targeted these loans at elderly people on fixed incomes and people who really didn’t understand what was,” Letcher said.
The Loston’s loan is now owned by Wells Fargo. But even though their good candidates, they say the bank refuses to modify their loan.
“If I’m in the position to pay and you’re in the position to help me stay in my home why can’t we work together?” Jerome Loston asked.
In a statement, Wells Fargo told CBS 5:
We remain committed to helping the Lostons and other Californians avoid foreclosure whenever possible. To that end, we have postponed the scheduled foreclosure sale to review their loan again to ensure we have explored all viable options.
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