Complaints soar over loan modification misinformation

<p>Traci Figueroa wrapped her arms around her 14-year-old son, said a tearful good-bye, and sent him to live with his grandmother in Eureka this week while she tries to find a new home for her family.</p><p>She and her husband lost their Santa Rosa home to foreclosure over the holiday weekend, following a drawn-out struggle to qualify for one of the home loan modifications touted by the Obama administration and bank executives as a way to ease the foreclosure crisis.</p><p>Figueroa's experience is a heart-wrenching example of the struggle playing out across the North Coast as people fight to retain their homes. Some win, and some lose.</p><p>The one constant is widespread complaints that loan representatives from national banks provide inconsistent and inaccurate information to people trying to modify their loans.</p><p>“One bank rep even told me I was mistaken, I didn't have a loan with Bank of America,” said Wendy Green, a Sonoma County employee who has sent more than 200 documents as she tries to get a loan modification on her Santa Rosa home. “It is maddening. It is like being in a nightmare where you're running so fast, but you can't get anywhere.”</p><p>Others said that like the Figueroas, they were strung along by bank representatives only to suddenly realize they had lost their house.</p><p>“I went through the exact same experience,” said Ally Oxenhandler of Sonoma. “They told me repeatedly on the phone that ‘the numbers look good,' ‘not a problem,' and then one day you're informed your house has been sold. It is heartbreaking.”</p><p>Many people are receiving modifications. Bank of America alone says it has provided more than 630,000 modifications to financially distressed homeowners nationwide since January 2008.</p><p>But questions remain as to why the Figueroas did not qualify for a loan modification.</p><p>On Tuesday, Bank of America spokeswoman Ginny Zoraster said the couple did not submit its loan modification application until after June 20.</p><p>But she did not respond to additional questions Wednesday regarding discrepencies over how the Figueroa's loan was handled leading to the couple losing their home.</p><p>The Figueroas provided documents to The Press Democrat showing they used FedEx to overnight the application to Bank of America on May 26. The bank sent them a denial letter dated June 4, and then on June 9 it moved to have their home sold at foreclosure auction.</p><p>The Figueroas said they called the bank after learning the auction date was set for July 2, but said bank representatives told them not to worry about it because they qualified for a loan modification and their paper work was being processed. They did not learn the auction would not be stopped until last Thursday, they said.</p><p>Fannie Mae, the huge corporation that buys many of the nation's mortgages from the original lender, had acquired their loan from Bank of America and declined at least twice to stop the sale during the final days.</p><p>A Fannie Mae spokeswoman said Wednesday they were researching why the Figueroa's request was denied.</p><p>“We're looking into it,” said spokeswoman Janis Smith.</p><p>The Figueroa's home sold at auction last Friday to divorce attorney and real estate investor Michael Cantarutti, who drove to their home and told them they had three days to get out.</p><p>Cantarutti responded Wednesday to criticism for not giving the family more time.</p><p>“I'm just doing my job. Just like a police officer who goes to a residence to break up a domestic dispute,” he said.</p><p>Cantarutti has been buying auction properties since 2004. His wife Carolyn Cantarutti is a real estate agent and sells the properties.</p><p>He said the Figueroa's are better off having lost their home.</p><p>“If you interview them a year later, they will tell you, if they're being honest, that this was a great time in their life,” he said. “They no longer have any of that debt.”</p><p>Traci Figueroa is now living in a hotel room in Santa Rosa. Her 19-year-old son is staying with friends, and her husband is working in Louisiana where he is helping supervise the oil cleanup effort.</p><p>“The worst part is being here while my wife doesn't have a place to live,” John Figueroa said Wednesday. “No, the worst part is having to hear my wife cry.”</p>