Public Affairs Journalism Article Two - Personality Profile: Asheville Foreclosures

By Patrick Zarcone

After being married 43 years, giving birth to four children and doting on nine grandchildren, Patricia Gulley has a lifetime worth of experiences.

That’s a good thing, too. The drama that comes along with marriage, children and grandchildren has prepared her well for what JPMorgan Chase has put her and her husband through for more than a year since their mortgage issues arose.

The Gulley’s troubles began in July 2008 when Jerry Gulley was laid off
from his job at Precision Restoration Services, an insurance restoration company based in Weaverville.

“He was terminated from his job on July 29, 2008, because of the economy,” said Patricia Gulley, 59, of Leicester. “The man had eight vans on the road and obviously they didn’t need my husband’s services after completing a $3 million job. They just let him go. No notice, no nothing, just fired him on the spot.”

Due to an injury that left her with two metal plates in her leg and unable to work, Patricia received Social Security Income disability payments from the government. When Jerry lost his job at Precision Restoration, the disability payments were their only source of income for the two months between Jerry’s firing and when he began to receive unemployment.

“When my husband lost his job, we had money to deal with for a month. I had my house payment to make, so I could see on the horizon that we were gonna be in trouble,” she said. “I called my mortgage company and told them, ‘Hey, look, we’ve lost our job and we’re gonna do the best that we can, is there some way you can help us?’”

Chase said they would be willing to help.

“They put me in touch with the homeowners assistance program, which put us under hardship forbearance, which put us then under loan modification because at that time the government was stepping in and doing loan modifications,” she said.

A loan modification, according to the Department of Housing and Urban Development, is “a permanent change in one or more of the terms of a mortgagor's loan, (which) allows the loan to be reinstated, and results in a payment the mortgagor can afford.”

“What happened was, I sent in all the necessary financial statements, income tax papers and proof of not having a job, and I had my payment, but they said in order for us to qualify we have to be three months behind, so I made no payments,” she said. “They said, ‘don’t worry, we will add this to the end of your mortgage,’ which, oh my God, you don’t know how grateful I was (to hear that).”

Things were looking up at the time, according to Gulley.

“It took them from August through December to get all the paperwork done, to get the modification, but they lowered our interest rate from 7 to 4.5 percent and they took away the mortgage insurance. They lowered our payments and by the time they added everything in, our payments were $647,” she said. “We pay our insurance and our taxes along with our house payment, which brought our payments up to $750 and it had been $891, so that helped us a lot.”

The Gulley’s made seven payments to a specific person working with Chase Home Finance in Columbus, Ohio, and then received some startling news: the payments they’d made, more than $5,000 worth, were nowhere to be found.

They’re now receiving help from OnTrack Financial Education & Counseling in their case against Chase.

“My client received a loan modification last year and then the lender supposedly lost all their financial documents, so they were never given a loan modification by Chase,” said Grace Hines, a financial housing counselor at OnTrack. “Because of their error, and my client has proof, all the documents showing she received a loan modification, Chase has put them into a state of foreclosure. They have a hearing date and a sale date, and we’re trying to prevent all of that from happening.”

While Chase more than likely didn’t intentionally lose the documents, they also haven’t tried very hard to make things right, according to both Gulley and Hines.

“When all this got messed up, they had to trace back and find our payments, which they found over $5,000 in payments they had lost. So they did find our payments,” Gulley said. “What they said was, ‘well, we’re going to have to re-modify the loan again,’ and I said, ‘this is bullcrap, just go back like it was.’ Because all they were gonna do is tack more interest and more late fees and wait another three months or so.”

Chase Home Finance tacked on both interest and late fees for the months that they told the Gulley’s not to pay, just as the Gulley’s worried might happen.

“Chase told them not to pay because it wouldn’t help their situation anyway and when they were told by Chase not to pay their mortgage, they didn’t and now they’re being charged all these late fees,” Hines said.

On top of the late fees and interest, Chase asked the Gulley’s to re-do all of their paperwork and send it in again so that they could look at the information and decide if they were going to do another loan modification.

“Basically they’re still telling us that they're willing to stop the sale, but they can’t do it until they receive the documentation from the client, but the client has already faxed the documentation,” Hines said. “Chase is taking 10 days to receive the information, scan it into the system and get it to the bankruptcy department in order to make a decision.”

The Gulley’s sent their documentation to Chase Home Financial on Feb. 4 and called the next day to verify that the documents were received. Chase told them it would be until at least Feb. 12 before they look them over. Their court date is set for Feb. 17.

What led up to this point is mismanagement, confusion and poor communication, according to Gulley.

“They kept saying the payments will be due Nov. 1, then Dec. 1, well the last time I talked to them, ‘well it looks like it’s going to be Jan. 1.’ All these months have gone by, I have not made any payments, I do have some of the money,” she said. “I’ve even got my first August payment that was due that I couldn’t send because they said they lost our loan. Where do you send payments to somebody when they’ve lost your payments before and they can’t even find your loan, would you send them any money?”

The Gulley’s story is becoming more and more common in 2010, Hines said.

“From the (start) of this new year, I’m getting more of these from Wells Fargo, Bank of America and Chase customers. I don’t know if it’s a coincidence but a lot of them paid their bailout money back to the government and now they’re pulling back and not honoring their modifications that they offered their clients and now we’re having to apply all over again,” she said.

This means extra work and time that’s being wasted on re-applying instead of being able to follow up on the work that has already been done, and all of it adds up to anger and frustration, Hines said.

“So everything I did with my clients last year, I’m having to do it all over again and it’s ridiculous. These people cry in my office everyday. You see grown men cry and you see grown ladies cry because of the emotional strife they’re going through is more than they can bear to handle. It’s just tough,” she said.

While dealing with the lost loan payments and having to go through the application process again, the Gulley’s also filed for bankruptcy.

“In November, we went in and we discussed our financial situation (with our attorney) and he said Chapter 7 (bankruptcy) would be what we needed to do so we went ahead and did that to get rid of the hospital bills that we could’ve never paid, there were almost like $10,000 of them, and credit card debt,” Gulley said.

Chapter 7 bankruptcy, according to the U.S. Federal Courts, is part of the bankruptcy code that provides for "liquidation, i.e., the sale of a debtor's nonexempt property and the distribution of the proceeds to creditors.”

The bankruptcy has only added to the stress, Gulley said.
“The stress is just overwhelming,” she said. “I don’t sleep at night. I do, but I don’t, you know? It’s just hanging over our heads constantly. Are we going to have a place to live? What are we going to do?”

Right now, times are tough for the Gulley’s. They’re hoping that the loan modification issues can be worked out with Chase, and quickly since they only have so much money.

“We’re living on unemployment and when they strike the unemployment, I don’t know what we’re going to do. But we’ll make it through, we’ve made it so far and something will come along,” she said. “You know, the way these people have done us, if I wasn’t so mean and so aggressive and persistent, we probably would’ve already lost our house and it wasn’t even really our fault. I was making my payments, I was sending my payments to whom I was told to send them to and it’s just a nightmare.”

As someone who deals with mortgage lenders and their clients on a daily basis, Hines knows just how difficult the mortgage crisis has been on everyone involved, but that doesn’t make how they’re handling the crisis any more acceptable, she said.

“We know that the lenders are all inundated with a lot of applications and they’re struggling, but in the same respect, I’m just not feeling much pity for them,” Hines said.

Gulley said, in the end, persistence and courage are what separate those who keep their homes from those who don’t.

“People are afraid and fear gets into people and they give up and I’m not going to give up,” she said. “For some reason, God’s brought us this far and he’ll take us the rest of the way.”

Gulley also said having a little bit of fight in you helps as well.

“My theory is that the squeaky wheel gets the grease and let me tell you, I can squeak,” she said. “I’ve had to fight for everything and it’s just a way of life. Either you’ve got to fight for it or lose everything you’ve worked for all your life.”