Where do we begin? Last month marked two years of attempting to work out some type of loan modification with Capital One, NA. We are one of thousands of homeowners who are now dealing with them by default since they acquired our loan from Chevy Chase Bank for pennies on the dollar when Chevy Chase Bank went under. We bought our home (a very dated fixer-upper) in Cave Creek Arizona six years ago with a cash down payment of just over $100,000. It was every penny we had because this was to be the last home we ever bought; we've had no intentions of ever moving again. Purchase price was $499,000 and financing the other $399,000 was more than affordable with our income at the time. In fact, our income at the time was on the modest side. The market here didn't peak til two years later, with values of similar properties going upwards of 700k. We thought it was ridiculous then and were so relieved we bought 'at a good time.' While we did ultimately borrow against an amount less than our cash down payment (so we have a HELOC), we never even considered taking advantage of what we thought were inflated values the first two years. All we cared about was fixing our place up.
The garage was/is unfinished, the kitchen is ripped out (has been for five years) – the cabinets were moldy. We ripped out the nasty carpeting that made the entire place reek. The roof still needs to be replaced (it leaks); the entire lot needs more fill as it floods when it rains. We had to replace the 20 year old inefficient AC unit, as anyone who has ever lived in or visited Phoenix in the Summer knows it's like trying to breathe in a 400 degree oven. The water heater imploded and flooded our living room (which used to be the garage), it was not to code when we bought (and no, we did not know this). We've spent a small fortune on plumbing and electrical work, but most of our fixing and updating thus far has been our own sweat equity. Cleaning til our fingers bled. Still needs a lot of work but it's clean, doesn't smell, and is very comfortable for us, even with our college dorm style kitchen. We are and have always been very simple people.
We are in our early 40's, college-educated, hard working professionals and seasoned homeowners who have always maintained a lifetime of flawless credit. Outside of our first mortgage payment to Capital One, we continue to maintain flawless credit. We have always been current on our HELOC, we have only two credit cards that are almost paid off, we own our vehicles outright (of course one has 200k miles and the other has almost 400k miles and they are not the most gas efficient, but they are safe and well maintained). Both American made – GMC and Ford! We don't spend money on traveling, clothes or going out to eat (except the occasional Papa Murphy's take out – and that is only when we have a coupon), our cell phones we've had for over four years now (much to the dismay of our teenager who just started high school). Like most kids today, they are learning Economics 101 through baptism by fire. We know the 'flawless credit outside of first mortgage payment' is pervading America and it tells a very different story about one's sense of responsibility and credit worthiness. That really should have its own new credit rating! Keeping food, water, and electricity going above all else is called survival.
Even though our income didn't allow it, we stayed current with Capital One through most of 2009 by depleting our reserves and even borrowing against some of that cash down payment (this is with a different bank by the way - USAA, one of the few in this country that is not corrupt). When there was no more, we stopped making payments to Capital One, and have refused to use credit cards (yes we still have credit lines) to reinstate the loan or for anything else. Looking back at those conversations, I guess it's no surprise a bank known for credit cards was pushing us to use them.
When we stopped making payments they started being more responsive. Mind you, we went from February 2009 to October 2009 pleading for help but staying current, and telling them over and over again our income was greatly reduced. Starting in January 2010 we were on one of those 'extend and pretend' HAMP trials and made payments until we were declined in April 2010. It has been a battle ever since, most of our attempts to work something out being ignored or like everyone says, just going nowhere.
Our 'file' is now about five inches thick. We have very dutifully documented the last two years of phone calls, emails, faxes and FedEx packages of paperwork submitted and resubmitted numerous times with six months of bank statements and tax returns each time. Will it ever end? It's been another full time job just to manage this process, and like everyone else, we are tired of it.
We knew to be suspicious late last year when Capital One had a sudden seeming willingness to work something out. The result of that was an individual modification with a new forty-year term and a payment amount equal to nearly 37% of our monthly gross income of the last two years. Not only were they asking us to pay out over $818,000 over the life of this new loan, they attached two outrageous conditions over this new 40 year term. One, getting permission from them to ever sell in the future (why this unless they're up to something?) and two, if we signed we were knowingly acknowledging Capital One's right to still foreclose on us at anytime in the future.
Our current property value today in March 2011 is about $240,000 and it still needs about 100k in work. Between the down-payment and payments we've actually paid out over $230,000 in six years. Even if we agreed to the new payment (hoping/praying our income is going up a little and stabilizing) and a new forty year term, there's no way we would have signed on with their two preposterous enslavement conditions. Definitely not the second one, although if they had done something like a principal reduction, perhaps the first one (getting permission from them to sell), may be arguably justified. But it still begs the question of why unless they are up to something.
Well, now we know that everything we described in the immediate two aforementioned paragraphs they were up to something because it amounts to a feigned good faith effort. How do we know this? Because we have been talking to one of their loss mitigation department employees. In our case, everything until that point was clearly demonstrating lack of good faith effort. They had to create documentation and a paper trial to show otherwise, but it was all by design to lead us on the path to short sale, and if we were foolish enough to sign on their offer, it was designed for us to fail so they will ultimately get our house anyway – whether thru a short sale or foreclosure.
Capital One acquired our Chevy Chase Bank home loan (and thousands of other home loans from this and other banks who went under) by default, for pennies on the dollar. They want to flip these homes for cash – today. They do not want to help the homeowner, and they only prefer short sale over foreclosure because it costs them less. All by design to delay, decline, and then 'rescue' the homeowner with a short sale option, since after all, it will be better on your credit. They even incent their employees to get the homeowner to agree to a short sale – holding contests for big screen TV's and Best Buy gift cards.
If they truly wanted to help us (or any other homeowner), they would follow their own payment guidelines and look at all available options for the homeowner. And they certainly wouldn't be attaching preposterous enslavement conditions to a new 40 year loan term.
Thanks to individuals who care about justice and exposing Truth above all else, now we have proof that Capital One actually trains their loss mitigation department employees to feign a good faith effort to work out modifications for homeowners. Not only that, we have learned and are continuing to learn from our own case and others around the country, they are guilty of misrepresentation, forging documents, notary fraud, foreclosing without proper chain of title, erasing homeowner contact records so as to pretend efforts to work with homeowner have gone unanswered, etc. They even hired someone with a criminal background to work in their loss mitigation department. If your 'file' has been in their loss mitigation department during the last couple of years, this person has had access to your (and your spouses) name, address, date of birth, social security number, tax records, etc. How does this happen at a bank? It's outrageous, like who needs to worry about identify theft on top of everything else?!
As we seek legal counsel (we're pleading for Terry Goddard's help – he only stepped down from his AG post to run for Governor), we're pursing a forensic loan audit and uniting forces with other homeowners battling Capital One. We have filed complaints with the OCC (we urge everyone to do the same if they have not already done so) and the Arizona Attorney General's Office. We have other letters drafted and prepared to send to Capital One and intend to cc other interested parties.
We will post updates as we have them and welcome contact and a full vetting from any other homeowner or their attorney who is fighting Capital One.
Thank you for creating this web site so that we may share our story. We wish for everyone to keep fighting the good fight! Have faith, trust and patience, because in the end, we will all persevere one way or another. The great thing about Truth is it always has a way of becoming known.