Loan modification nightmare
Tired of inflating rents and disinterested landlords who didn’t fix broken things, Don and Andrea Gaines took the plunge into homeownership three years ago.
In a buyer-friendly, first-time-home-buyer deal orchestrated through the Colorado Housing and Finance Authority, the couple put no money down to get into a 900-square-foot, double-wide mobile home on Peach Street in Clifton. The sellers picked up the closing costs. For more than a year, the Gaineses paid their $855 monthly mortgage without a problem.
They also went about fixing up their property, pruning and rejuvenating the rosebushes, hacking the dead branches out of the massive globe willow tree in their front yard and laying new tile one square at a time as they could afford it.
Then Don Gaines lost his job. He quickly found another, but he worked only two days a week at the outset, which led to him and his wife falling behind on their mortgage payments.
The couple now faces eviction, despite what they claim were initial assurances from the Colorado Housing and Finance Authority that they wouldn’t lose their home, despite their making two payments last summer as a gesture of good faith, and despite their stowing money away in a savings account they say they immediately can put toward their mortgage.
And when Don, 48, and Andrea, 47, sought help to stave off repossession and renegotiate their loan, they unwittingly turned to a California law firm currently operating under an F rating from the Better Business Bureau. The Gaineses claim the company took their $2,000 and vanished.
Leaning on a white picket fence in their front yard last week, they vowed to fight to stay in their home — a place that technically doesn’t belong to them anymore.
“They’re going to have to dig my dead carcass out of here before I lose this place,” Andrea Gaines said.
Won’t ‘lose home’
Bolstered by his $14.25-an-hour, overtime-rich job delivering medical supplies, Gaines and his wife ended their two-year search for a home on a modest residential street that backs up to F Road. They bought the house in August 2007 for $114,300.
When Gaines was laid off in October 2008, they recounted, they immediately contacted the Colorado Housing and Finance Authority, as they had been counseled to do in their homebuyer education class.
They say their caseworker, Claire Fagan, assured them she would work with them to keep their home and outlined a plan under which their missed payments would be tacked onto the end of their 30-year loan.
“She said, ‘I’m not going to let you lose your home,’ ” Andrea Gaines said.
Her husband found a job with a security company, but it wasn’t until early 2009 that he was working close to full time, making $12.50 an hour. In May and June of that year, they made two full mortgage payments, hoping CHFA would take them as an act of good faith.
Instead, the Gaineses claim, a new caseworker, Ann Lowery, instructed them to pay their outstanding balance or put their house up for sale. Later, they say, she told them it didn’t matter how much money they sent, that CHFA would take their house.
Desperate for help, the Gaineses in July 2009 contacted Home Legal Source, a Carlsbad, Calif.-based law firm that claimed it assisted clients with loan modifications. They gave Home Legal Source $2,000 upfront, spreading the payment out in three installments.
At first, they say, Home Legal Source appeared to make headway with CHFA. The company blocked the foreclosure and auction of their house, and a Home Legal Source attorney informed the Gaineses in February that CHFA had agreed to a loan modification that would reduce their mortgage to around $575 a month. They say the attorney told them she still was working out the details and to not resume making payments until they received paperwork with the official renegotiated mortgage amount.
The Gaineses say they never received the paperwork. They haven’t heard from anyone with Home Legal Source in five months. Their calls to the company have gone unanswered or been met with recordings indicating the number has been disconnected.
Home Legal Source didn’t return any of the three phone messages left by The Daily Sentinel.
The couple claims they received no communication from CHFA between March and June, when Don Gaines called a third caseworker and learned that CHFA had repossessed the house in a May 12 foreclosure sale.
Tom Hemmings, chief financial officer for CHFA, told the Sentinel he could not comment specifically about the Gaineses’ case because of privacy guidelines. He said CHFA features a number of programs to either help borrowers stay in their homes or mitigate the foreclosure process and make the transition out of their home as easy as possible.
“Our efforts are really to do all we can to help borrowers,” he said.
In a June 24 letter to U.S. Rep. John Salazar, D-Colo., prompted by the Gaineses’ appealing to Salazar for help, Hemmings called the foreclosure “a last resort following numerous attempts to pursue an alternative ...” He said CHFA postponed an auction four times to allow the Gaineses’ time to either modify their loan or short-sell their house, a process in which the borrower sells the home for less than what they owe on it.
Hemmings also noted in the letter that CHFA modified the Gaineses’ loan in January, dropping their monthly payment to $762.07. He said CHFA left a message with Home Legal Source and attempted to contact Don Gaines with the new figure.
Message not returned
The Gaineses say they never heard about CHFA’s loan modification until they read Hemmings’ letter. Gaines said when CHFA called him, apparently to let him know about it, he couldn’t talk because he was at work. He said called CHFA back and left a message but never heard anything further.
The couple says they have the money to resume their payments, claiming they socked $600 away in a savings account months ago. They say they didn’t make further payments after the two in May and June of 2009 because Home Legal Source instructed them not to. They also say they thought it would be pointless to continue to send money after Lowery, the caseworker, told them CHFA was going to seize their home.
“I figured if they’re going to take my house, they’re not going to take my money, too,” Andrea said.
The Gaineses learned last week they’ll soon receive an eviction notice. They initially resolved to battle to stay in their home but now wonder how feasible that is, given the fact it no longer belongs to them. They say they likely will begin looking for a two-bedroom rental, hoping to find one in the $500 to $600-a-month range.
The experience with CHFA and Home Legal Source has left them with a bitter taste.
“We feel like we’ve been treated like a commodity rather than people,” Don said.