Michigan homeowners still facing foreclosure two-step

LANSING — As state officials begin a probe into the foreclosure activities of several top national lenders, a Lansing family has been waging a battle with JP Morgan Chase in an attempt to straighten out what they call faulty billings.

Melody and Tom Stratton, who spoke to Michigan Messenger a year ago about their battle to save their home from foreclosure, say that while they received a loan modification agreement with JPMorgan Chase, they continue to receive collection notices, phones calls and on Saturday an in-person visit by a Chase representative.

The agreement came only after the intervention of Lansing Mayor Virg Bernero. Bernero connected Stratton with the office of Attorney General Mike Cox, and that led to a face to face meeting with the lender. Bernero, a Democrat, is vying for the governor’s office against Republican Rick Snyder.

The couple says they have made every payment due under the loan modification on time. And in each payment they included a letter — each one becoming increasingly frantic about getting their finalized loan modification agreement from the lender as well as an accurate accounting of what is due to the company.

Tammy Ferguson, an attorney and special projects director at the Lansing Franklin Street Community Housing Corporation, has been working with the Strattons for just over a year now. She says the Strattons are not the only homeowners dealing with this, she has several other clients in the same boat.

“There are some fees that [the lender] didn’t capitalize in the modification,” Farnum says of the cases she is dealing with. “As a result, the collections department and the loss mitigation departments are talking, and it takes months for these situations to reconcile and for the loan modification to be fully entered in the system.”

Farnum says the Strattons are the only clients she has dealing with the loan modification issue who are dealing with JP Morgan Chase. But on Wednesday, WLNS a Lansing CBS affiliate reported about an Iraq war vet who has missed no payments on his mortgage, but has received notification of foreclosure proceedings.

The money the lenders and servicers are seeking could be legal and other fees that mounted up while the person with the loan underwent the loan modifcation process. Those fees include title searches, legal fees and fees to send people to the home to verify that it is still inhabited. Those fees add up, says Farnum, but they should be included in the final agreement — not attached to the account after the agreement because the servicer failed to get final billing to capitalize those fees within the modifcation.

Gov. Jennifer Granholm issued the following statement about the Stratton’s loan woes.

“The situation Thomas and Melody Stratton are currently experiencing is one of the many reasons why I have sought in writing not only Chase’s suspension of foreclosures in Michigan, but Chase’s demonstrated compliance with Michigan foreclosure law. In a recent letter dated October 13, I called on James Dimon Chairman, President and CEO of JP Morgan Chase, to immediately suspend all foreclosures, all sales of properties previously foreclosed upon and all evictions of persons residing in previously foreclosed upon properties pending an investigation by state officials. While I recognize that Chase already participates in one of the three Hardest Hit programs providing payment assistance to currently unemployed homeowners, I would like to see them fully participate in the Helping Hardest Hit Homeowners Fund to help homeowners seeking assistance in preventing the foreclosure of their homes and to help homeowners who have fallen behind on their mortgage payments or taxes due to a medical emergency or lower income status.”

The letter Granholm references informed JP Morgan Chase that the state was undertaking an investigation of its foreclosure processes, and that the governor was prepared to file legal action to force the company to cease foreclosure in the state until the investigation was complete.

JP Morgan Chase spokesman Tom Kelly declined to discuss the letter or the investigation when reached by Michigan Messenger. “Chase does not comment about its communications with government agencies,” Kelly said.

And Mary Kay Bean, the Michigan spokesperson for JPMorgan Chase, said the company “was looking into the account of the Strattons.” She declined to provide any more information.

Granholm spokesperson Mitchell Rivard says the governor’s office has not received a reply from JP Morgan.

“JP has responded neither in word nor deed,” said Rivard.

How serious is the Michigan government investigation? According to Rivard it includes the state Attorney General, Republican Mike Cox, as well as various agencies and entities of the executive branch.

“In letters dated October 13, 2010, the Governor called on the nation’s top lending institutions that service mortgages in Michigan to suspend all foreclosures pending investigation of possibly fraudulent foreclosure filings. In those letters, the Governor also asked the lenders to demonstrate their compliance with Michigan foreclosure law by providing, among other things, detailed information regarding the lenders’ use of ‘robosigners,’” said Rivard. “All information provided to the Governor by these lenders will be forwarded to the Office of Financial and Insurance Regulation for review, investigation, and where appropriate, referral to the Attorney General to take legal action.”

Asked if the growing evidence of issues with JPMorgan Chase and other lenders would prompt Granholm to take immediate legal steps to stop the foreclosures, Rivard said it would would be “premature to comment on what, if any, legal action might ultimately be taken with respect to JPMorgan Chase.”

Meanwhile, the Strattons continue their battle to save their home and stop the collection letters and phone calls. They are also still waiting for an executed loan modification agreement.

“That’s very common,” says Farnum. “I don’t know any homeowner that has received a signed copy for their records. That gives the banks a lot of power. They can say we didn’t agree to it and there’s no signed agreement.”