When John Degroot refinanced his Lake Stevens home, it was so he could afford to fix the place up.
A few years later, the hardwood floors have been installed. The yard is like a page out of Better Homes and Gardens.
And the mortgage payments are unaffordable.
A loss of income put the monthly payments out of reach for Degroot, a disabled structural engineer who is not yet old enough to receive full retirement benefits.
Now, he’s trying to modify his Bank of America loan, applying for help under the federally-backed Making Home Affordable program.
Like many other homeowners across the country, he’s frustrated. He’s been told he qualifies, but he can’t get answers about when — or if — he’ll see relief.
“If I qualify for the program, what’s the hang up?” he said one afternoon last week, shifting through loan documents at his dining room table.
He estimates that more than 55 percent of his monthly income goes to paying for his home loan. Even before his income dropped, things were tight.
“They should never have given me that loan,” he said.
Degroot hasn’t missed a payment yet.
Others aren’t so lucky.
Missing a payment is the first step on the path to foreclosure. The federal loan-modification program aims to help homeowners avoid foreclosure, but some say there’s a disconnect between intention and reality.
A lawyer with the firm Hagens Berman filed a lawsuit against Bank of America on behalf of Washington homeowners in March, alleging the bank is “intentionally withholding government funds intended to save homeowners from foreclosure.”
The Seattle-based firm filed a similar suit on behalf of California homeowners last month.
Foreclosures are on the rise in Snohomish County, according to data from the auditor’s office. Before a bank repossesses a property, it must file a notice of trustee sale, acknowledging the property will be foreclosed on in 90 days.
The notices are a fairly reliable indicator of how many homeowners are in trouble. And lately, the number of notices issued indicates the trouble isn’t over.
About 590 homeowners received notices in May, roughly twice as many as in the same month two years ago.
County records show 640 households received the warning notices in April, compared with 450 in January.
It’s a trend Degroot is trying to avoid.
“We put a lot of money in the house, and we’re not going to walk away from the house,” he said.
For now, he’s being told to be patient, that a loan modification takes time.
“How many more times am I going to hear 45 days?” he said.
Read Amy Rolph’s small-business blog at www.heraldnet.com/TheStorefront. Contact her at 425-339-3029 or arolph@heraldnet.com.
Talk to us
> Give us your news tips.
> Send us a letter to the editor.
> More Herald contact information.
