Because we all know banks never make mistakes...
For the past 30 days, Kendra and Todd Parker have been trying to figure out what to tell their four children, fearing that they, like millions of other Americans facing foreclosure, could be tossed out of their home.
But unlike the vast majority of homeowners in their predicament, Kendra Parker says she can prove she and her husband have not missed a single mortgage payment.
The Parkers' mortgage began like any other that might have emerged from the housing boom: the neighborhood bank that originally issued their mortgage sold the loan, and it eventually landed in the hands of one of the nation's largest mortgage companies. In industry parlance, the loan was "securitized," or sliced into parts and combined with hundreds, possibly thousands of other mortgages, then sold piecemeal to investors. The complex reality of the modern mortgage system was supposed to have very little effect on the Parkers -- they would simply mail their monthly payment to a mortgage servicer, which would handle the payment on behalf of the investors holding the mortgage securities.
But, along the way, that machinery broke down. No one, the Parkers say, told them their loan had been sold. With no word from the new servicer, New Jersey-based PHH Mortgage, the Parkers sent their first payment to the original bank, which mailed the check to PHH, according to documents the Parkers provided to The Huffington Post. But that check went missing. The Parkers say that despite the fact that they made every other payment, that missing check led to foreclosure proceedings, and a wrecked Kendra Parker's credit rating.
Soon, the mortgage company informed the Parkers that they were three months past due and owed over $3,000.
In the past three months, Kendra Parker and her husband, Todd, said they have spent countless hours on the phone trying to straighten things out. When that went nowhere, they sent registered letters to everyone from the CEO of PHH to their state attorney general's office. They finally secured the help of a lawyer who oversees foreclosures on behalf of the U.S. Department of Housing and Urban Development. But more than a month after they were informed of the foreclosure proceedings, nothing has changed.
Once the Parkers' first payment was missing for 90 days, their account was considered delinquent, and the mortgage company automatically stopped accepting their payments. This is how even homeowners who appear to have made every single payment find themselves threatened with foreclosure.
The Parkers signed the deed on June 30 of 2010, and were told to expect a statement. The first payment was due on Aug. 1, but the day came and went without that statement. When Kendra finally got in touch with the original lender, Metropolitan National Bank, she was told that her mortgage had been sold, and she should hold that first check until she got the first statement from her new mortgage servicer. On Aug. 27, Kendra got a letter from PHH Mortgage explaining that PHH would now be servicing their mortgage.
PHH Mortgage of Mount Laurel, N.J., is ranked eighth among America's top 10 mortgage servicers by volume of loans serviced, according to a list compiled by Mortgage Servicing News. Bank of America and Wells Fargo top that list.
In an interview with Housing Wire last year, PHH President Luke Hayden said despite being relatively small, the company could compete by being efficient. "There are opportunities for lenders who are willing to rethink traditional approaches to originating, servicing and investing mortgage products," he told Housing Wire. "We are currently embarked on a yearlong initiative to drive efficiency and take more than $100 million out of our cost structure on a run-rate basis."
The letter Kendra Parker got from PHH Mortgage on Aug. 27, which was reviewed by The Huffington Post, listed two addresses, under which the letter instructs Parker, "Please do not send your mortgage payments to this address." By September, she said, there was still no word on where they should send their payment. The Parkers got in touch with their original bank, and were advised to send the first payment as originally intended. Metropolitan National Bank, they were told, would forward the payment to the PHH, they said.
The Parkers sent a check for $1,111.86 to Metropolitan National Bank on Sept. 8. Documents from Metropolitan National Bank provided by Kendra Parker show the bank sent the check by registered mail via UPS to a "Mortgage Servicing Center" in Chicago and that it arrived on Sept. 9. Someone in the firm's mailroom would have had to have signed for it. It appears that that check went missing, and that payment was never applied.
"It looks like one payment got misplaced and that started the domino effect," said lawyer Greg Nelson, who works for law firm Michaelson, Connor & Boul. The law firm examines all foreclosures stemming from loans by lenders approved by the Federal Housing Administration. When an FHA approved loan is foreclosed on, the firm can help some homeowners to stay in their homes. After hearing the story, and seeing the proof Kendra had to offer, he too forwarded the details to PHH.
When the Parkers made their second payment, on Sept. 17, it was applied as their first payment, and from that point, they were considered in arrears. The clock started ticking.
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