Three times, Thomas and Tracy Barboza found a path out of foreclosure. Three times, their lender failed to help them.Unable to afford their mortgage, the Barbozas are trying to sell their home. They have received three offers since last summer. But because the offers - between $220,000 and $225,000 - are less than their $320,000 mortgage, their loan company, Countrywide Home Loans, would have to sign off on the deal and accept a loss. Countrywide has either rejected or ignored the offers and foreclosure seems imminent.
"It's like they want things to go sour," Tracy Barboza said, sitting at the kitchen table of their home, stripped bare of other furniture after they moved into an apartment in anticipation of a sale.
The Barbozas are among the hundreds of thousands of homeowners seeking help from mortgage companies to withdraw from loans they cannot afford. Some want lower loan rates to reduce their monthly payments. Others simply want to cut their losses and sell.
But the loan companies are proving ill-equipped to handle record foreclosures, particularly requests involving sales that would require lenders to accept losses on the loans, so-called short sales. The mortgage companies turn down offers - even though it may be more costly to seize the house in foreclosure - or they take so long to respond that the buyers move on, or don't respond at all.
Homeowners, real estate brokers, and others who have tried to crack the system describe it as akin to a black hole. Automated phone systems are impossible to penetrate, and people describe waiting on hold for an hour or more. Messages go unanswered. Paperwork is lost or gathers dust in piles. Those inside the loan companies with authority to make decisions are not consulted.
Andrew Kaplan, whose firm Agencybid.com auctions distressed properties, has devised tactics to get a loan company employee on the phone. "I say, 'Look, these people are in trouble. They need help.' They just say, 'I can't do anything about it,' " he said.
The companies say they are trying. The American Securitization Forum, whose members include mortgage holders and loan-servicing companies, said in a statement they "are working diligently to address all these requests but each loan needs to be evaluated on a case-by-case basis."
Vicki Vidal, senior director of government affairs for the Mortgage Bankers Association, said some lenders have set up online applications so borrowers can work out their problems. She said short sales are particularly difficult. If Countrywide approved the Barbozas' sale, it would mean forgiving the amount the couple owes in excess of the sale price, about $100,000. Also, many short sales involve a primary and a second mortgage, further complicating matters.
