BofA tests customer’s patience, finances

Last Aug. 28, Bank of America’s mortgage- servicing subsidiary sent Karla Morrison a letter.

“You need someone on your side,” it said, adding that she might be eligible for relief under the Home Affordability Modification Program included in the October 2008 bank bailout bill.

Morrison needed relief.

She was looking at refinancing an adjustable-rate mortgage, but the new payments would be prohibitive. She did not want to move her three children.

Bank of America declared her eligible for a modification, and in October she began making monthly payments representing 31 percent of her income. After three months of these trial payments, Morrison was supposed to receive a modification agreement.

None came, as it has not for thousands of other homeowners with loans serviced by Bank of America, or other lenders, for that matter. Morrison’s neighbors are in much the same fix with Wells Fargo.

BofA has been peppered with class-action lawsuits alleging incompetence or, worse, purposeful foot-dragging that keeps fees flowing and mortgage arrears growing. In April, company officials told a congressional committee it had 16,000 employees working on foreclosure/ modification issues.

Friday, the bank provided a statement saying it has completed more than 70,000 modifications under HAMP, and a total of more than 630,000. But 143,000 loans remain in the trial period, and 400,000 trial periods have been extended.

When Morrison contacted Bank of America after she had her three trial payments, she was told to keep making payments while her paperwork was processed. The agreement would be ready in 30 days. But after 30 days the wait was extended another 30 days, then another 30 days. She was told to be patient, that her documents had been lost, and could she please send new paperwork, which she did – six times.

“I started taking copious notes because so many things were falling through the cracks,” Morrison said.

She started calling biweekly, once finding herself on hold for one hour before being transferred to another extension, and a 30-minute hold.

“You can’t get the same person, or the same answers,” she said.

In May, she had to correct misinformation regarding her monthly expenses. “Good to go,” she was told.

But in June she was told that because her documents had been modified, she would have to start the process all over.

“I said, ‘That’s not acceptable,’ ” Morrison says. She asked to speak with a supervisor, who had a surprising verdict: Her loan had been declined six months ago. And she was $8,000 in arrears on the full mortgage payments you should have been making.

Nothing in a one-inch-thick folder of documents shows any such thing. And, notes Morrison, with every month those arrears accumulate, her future mortgage payments – provided she ever gets her loan modified – could be become less affordable.

Last week, she was told her application had been restarted as of May 13, and that it is now being handled by the legal department because of a complaint she filed with the U.S. Office of the Comptroller of the Currency, one of BofA’s regulators. Also, Sen. Patty Murray’s office has sent a letter to Bank of America inquiring about her case.

Morrison has the good fortune to work for Gallatin Public Affairs, consultants who know where a little pressure can help.

Friday, the bank apologized for the unexpected delays processing modifications. “We hope that in the next few weeks we will be able to provide Ms. Morrison a final decision,” its statement said.

Based on her almost yearlong “trial,” Morrison has become thoroughly skeptical.

“I’m not holding my breath,” she said.