Posted: Feb 15, 2013 7:49 AM PST
6 On Your Side Consumer Investigator
WATE, Knoxville, Tennessee
OLIVER SPRINGS (WATE) - Every day thousands of hopeful homeowners who are in financial trouble are stunned to discover their loan modification plan has a problem. They're told either the plan has been delayed again or the loan has been declined by their mortgage lender. This experience is happening to people of all ages.
A weary homeowner from Oliver Springs hopes that others benefit from his experience.
As he repairs fixtures in bathroom, Gerald Brown considers himself a pretty good handyman.
The Vietnam-era veteran has owned the house that he helped build in Oliver Springs since the early 1980s. He took out an equity loan on it some 16 years ago. Then in the summer of 2010, while teaching high school in Georgia, he lost his job as hundreds of teachers were laid off. He moved back to Oliver Springs, but was unable to make payments and fell behind on his loan. "I'm 66 years old. I don't want to have to move somewhere else," Brown said.
In the winter of 2010, Brown started getting warning letters. His lender, JP Morgan Chase, wanted its money. He asked Chase to hold off for a few months until he was eligible for retirement benefits so he could resume his mortgage payments.
"I asked them to take the five months I was behind and put it to the end of the loan," he said.
But the representative told them they didn't do that.
In 2011, he started applying for a loan modification through the federal government's Making Home Affordable program (MHA), which is designed to help struggling homeowners avoid foreclosure.
"They finally put it into a loan modification," Brown said.
It's a three-month trial period and Brown started affordable monthly payments of $631 beginning in November of 2012.
But this month, he says his lender needed new information.
"They said the problem with the paperwork is, you put a letter in there that you were not happy," Brown said.
They referring to a line in which he wrote, "I'm writing this letter in protest."
In a letter written to Chase last month, Brown not only accepted the modification agreement, he also criticized it in an attached letter.
"The length of the loan modification is 40 years," Brown said. That means he will be 106 when the loan is paid off.
JP Morgan Chase tells 6 On Your Side, "MHAP rules say the, "agreement must come back signed without comments or attached letter."
Federal rules state modification agreements must come back signed without an any comments or attached letter. Brown didn't do that.
Chase says, however, Brown will receive another copy of his agreement which he can choose to sign.
Chase also says for customers like Mr. Brown, the 40-year loan is the only way he could qualify for mortgage modification. Gerald is going to accept the deal.
"At this point, I can't purchase another home," he said.
Loan modification has not been easy for many struggling homeowners, however Chase says it's prevented 945,000 foreclosures, including 522,000 loan modifications that kept the family in their home.
One thing you don't want to do when you're applying for one is to add a comment or an attached letter to any agreement.