The Bank Tried to Take My Home!

How a city’s clerical error led one family to the brink of homelessness.

On June 8, Archer Mapp’s mortgage payment doubled. Wachovia, his bank, took twice what they had regularly debited from his bank account. It wasn’t because his adjustable-rate mortgage reset. Mapp, who lives in Washington, has steady, full-time employment. For 13 years, he and his family have lived in a Capitol Hill row house. Before June, they had never been late on a mortgage payment.

Now they’re facing foreclosure.

This is Mapp’s story, in his words, as told to Marianne Scott.

Suddenly an enormous payment was taken from our bank account. What was going on? Why did this happen? For weeks I kept getting referred to loan counseling for assistance, but no one would explain why my mortgage payment doubled. I applied twice for assistance, providing personal expense information in extensive detail, pay stubs and W2s. Both times I was denied because I was not behind in my mortgage and my debt-to-income ratio was too high. Well, of course it was with doubled payments!

In early August 2009, I walked into a bank branch and had the manager call the bank’s escrow department. He found out the mortgage payment was inflated to recover an increase in my 2008 property taxes—from $1,961 in 2007 to $21,832 in 2008—that the bank had paid.

Just before Christmas 2008, I received a note from Washington, D.C.’s Department of Consumer and Regulatory Affairs mistakenly classifying my property as vacant. I e-mailed them a copy of my water bill to show it was very much in use.

I thought that took care of that.

Not so. I didn’t know the misclassification also had property tax implications.

As soon as the bank branch manager told me about the jump in property taxes, I went back to the city and received documentation saying the $21,832 tax assessment and tax collection was done in error. My bank could now claim the 2008 tax overpayment.

But even with this documentation my bank refused to re-adjust my payments, claim the tax credit, or accept “partial payment.” I tried to pay just the amount I knew was due on time while they claimed the tax refund, but the branch would not accept any mortgage payment less than the doubled payment the escrow department said I owed.

Last month, I took off from work and went to the city’s tax office. One of the officials there spent an hour and a half on the phone with my bank trying to convince them to write a letter or e-mail to claim the tax credit. The bank said they needed to do more research in order to claim.

On Sept. 12, the “Notice of Intent to Foreclose” arrived from my bank.

Each day we fear when a bank envelope comes through the mail slot. A few weeks ago a friend recommended a lawyer, but I couldn’t afford him.

My bank recently sent me an application for a loan modification. Why are they doing this when all they need to do is claim the tax credit and adjust my payment back?

I think my “Pick a Pay” loan (also known as an Option ARM mortgage) must be labeled as one of their toxic assets. One loan at a time, they are trying to purge this type of mortgage from their system and under the Home Affordable Modification bailout plan, collect taxpayer funds for each modification. The tax error gave them an excuse to push me toward foreclosure or force me into loan modification even though my loan was in good standing until the tax mistake.

So why not just allow them to modify my loan? I would have to agree that I am behind in payments. I am not going to ruin my credit so that they can get paid to “help” me. Since June 8, this bank has collected a little more from me than they would have if there had been no tax error. I don’t consider that behind.

I filed a complaint with D.C.’s Department of Insurance, Securities and Banking. They recently told me that my bank got the tax refund credit and would adjust my mortgage downward. But my payment is still higher than it was before June 8.

The bank still claims my loan is significantly in arrears because I only paid every other doubled payment charged to me over the past five months. The doubling of the payment was due to a mistake. I have paid the amount I owed. The city fully repaid the bank the excess tax the bank outlaid. How is this a loan in default?

This is not rocket science. This wickedness can’t go on. My bank is benefiting from a property tax mistake. To then be so abusive to a customer and taxpayer when they have received public money is just wrong.

Marianne Scott is a freelance writer who lives in Washington, D.C.