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.

(Copyright 2012 by CBS San Francisco. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)

Comments (5)
  1. Gerard says:

    more to this story and there’s a reason Wells Fargo has declined to modify their loan. pick a payment (option ARM) cannot be the sole reason for the $4200 payment. what was the loan balance? did they take any cash out?
    more in depth reporting required here.

  2. john says:

    On TV, Mrs. Loston stated, “What we need is a fixed rate with a 2% interest [rate]…”

    I’m sure everyone would jump at an opportunity to receive a 2% loan… these simply aren’t realistic expectations. Who is going to make-up the shortfall between 2% and the actual market cost of the money? If that is the highest interest rate the Mr and Mrs Loston can afford, the banks simply cannot provide a loan. There are no 2% loans being offered. So if they are seeking a 2% loan, they won’t get “help” from anyone. That’s like stating no one will help me find a $1M dollar per year job… No kidding!

  3. steve says:

    I got a 2% loan for 5 years with my modification thru wachovia. then it went to 3% on year 6, then 4% on year 7, then would goto whatever fannie mae’s rate was.. I should say i had a loan.. after i made my 3 trial pmts ON TIME, suddenly i couldn’t make a payment to anyone. Coulldn’t get my home specialist to call me back for 15 days, 3 times a day. Finally i think the janitor answered and waited on hold for 45 minutes and he replied they never received my new loan papers. I told them i fed exed in and have proof. Was transferred to someone else who said nope. i asked “why didn’t someone attempt to contact me. she said not their job. I told her it was their job when i was making my 3 trial payments, they would call 3 days before pmt due and everyday til the actual due date.. I finally wrote to the OCC and a VP of wachovia sent letter stating that they actually did receive my new contract but nothing they could do now cause the home affordable program is strict on due dates and can’t go back, but i could reapply. well now wochovia is wells fargo, so i reapplied and 8 days before my ppwk due date which was 2/16/12 they wrote me that they can’t help me and application has been cancelled and to expect past due calls.. they dated the letter 2/9/12 the day before the the big federal settlement for the 5 big banks but didn’t get it til the 13th. Why would they make sure it was dated 2/9/12? does anyone think that is odd? Im now trying to figure something to save my house. this is all a huge joke. the delays, llying, not able to get call back.

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