Modifications for loan payments are very hard to obtain these days. Real Estate Tips

Modifications for loan payments are very hard to obtain these days.

Apr 10, 2011 Mortgage Information

The nation’s lingering housing foreclosure mess is too often about folks with McMansion-size aspirations and duplex paychecks, granite counter appetites and laminate budgets.

And when we hear that one of the nation’s hot spots for foreclosures is Prince William County, we nod knowingly, thinking of the vast tracts of huge new homes and the dreamers who drowned in them.

But the other day, I met some of the folks who lost their homes or are fighting with banks to try to keep them. And McMansion isn’t what comes to mind.

“We still have the ’80s carpet in the house; we never refinanced and remodeled. We really saved, and we were careful,” said Susan Reed, who is trying to figure out whether to pay her health insurance premium or the mortgage on her family’s Manassas home this month.It’s been like this every month, lately.

The Reeds — mom, dad and four kids — upgraded from a 1,150-square-foot home to a 2,200-square-foot home in 1994. They never missed a mortgage payment

But recently, her husband was laid off from his food-service job. Then he was laid off again. And then again. As the economy crumbled and he grew older, fewer places wanted to hire him.

Even with his wife’s earnings as a store manager, the couple’s income dropped by 73 percent.

They put off one son’s college expenses. They cut their cable, stopped eating out, stopped doing anything that cost money. They tried to modify their mortgage with Bank of America to fit their new income. Not pay less, just pay longer.

That involved months of paperwork and ping-ponging between all kinds of different offices and departments. You know the scenario: voice mails, phone trees, “press ‘1’ for the loan officer. . . .”

Last month, they got their denial letter. “We were denied because we never missed a payment,” Reed said.

“You are not eligible,” the letter said, “because you’re not in danger of default.”

Punished for doing the right thing. And here’s what’s really awful about it. This is the same bank that got a $45 billion bailout from taxpayers when it was in trouble.

“Our tax dollars bailed them out. When my family needs a little help, why can’t they help us out?” Reed demanded as we walked through her neighborhood, Georgetown South, where 30 percent of the tiny brick townhouses have been foreclosed on and the value of homes has plunged from $200,00 to just $40,000.

Leslie Jones remembers when more than 60 percent of the townhouses there were owned by small families like hers. She has lived there since the 1980s and bought her home in 1991.

“Now, it’s just a lot of renters. And those landlords don’t care who they bring in. It’s just money to them,” Jones said.

Jones, Reed and about 200 others who belong to VOICE (Virginians Organized for Interfaith Community Engagement) for Justice, marched through Georgetown South on Sunday, planting signs on the lawns of foreclosed and empty homes.

They don’t want loans forgiven. They simply want the banks to help modify family’s loan payments, something many banks do reluctantly and rarely.

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