Climbing out of a mortgage mess

MYRTLE BEACH, SC (WMBF) - For the first time ever, an Attorney General is suing HSBC and is getting ready to sue two other mortgage titans, Bank of America and Wells Fargo.

HSBC Holdings, founded by the Hong Kong and Shanghai Banking Corporation, is a British multinational banking organization headquartered in London. They're accused of breaching the terms of a multi-billion dollar settlement intended to end foreclosure issues across the nation.

WMBF News met a Pee Dee couple at wits end. A life threatening medical condition tarnished their previously perfect payment record and are now at risk of becoming homeless.

October 31, 2008 started out like any other work day for Rebecca Faile. She was at McLeod Hospital working like she had done day in and day out for 22 years.

"I had a tremendous headache so I asked them to take my blood pressure, and it was extremely high," says Rebecca Faile Huffman.

She's thankful she can't remember what happened next.

"I had just gotten off the phone from saying I beat you home, I'm in the driveway. And my phone rang back and within that short period of time, she had the brain aneurysm," Tom Huffman tearfully explains.

While Rebecca found herself fighting for her life, her then boyfriend, Tom Huffman, was fighting to hold onto their home.

Tom tells us, "We got behind on our house payments waiting on her disability and the social security to come."

It took 15 months to get a check and their previous track record of never missing a payment in more than four years, went out the window.

While Rebecca focused on limiting stress and improving her health, Tom took over as Power of Attorney. He quickly found himself playing cat and mouse with Wells Fargo.

"Four and a half years and how many calls later, and you've never really had communication with them?" asks WMBF News Anchor Heather Biance.

Tom responds, "To my knowledge I've never discussed this loan modification with any person that had any authority to make any 'yes' or 'no' answers. It was always take and compile the information on the computer, and they would get back to us, but nobody ever called us back. Nobody has ever called us to this day about the loan modification. Four and a half years later."

Tom says one of the many problems is that Wells Fargo would request updated financial records dozens of times.

"After faxing it to them, they would call and say that they didn't receive such and such. And so you would have to re-fax it, sometimes two and three times. They would deny getting it," says Tom.

Heather continues, "And you had the receipt?

Tom answers, "I had the receipts from Office Depot for the documentation of the receipts."

When we spoke to Wells Fargo on the phone they wouldn't talk specifically about the Huffman's situation, but they did explain that all documents have a shelf life. So if everything that's required isn't turned in all at once within a set period of time, the documents "expire"' so to speak and the process starts over.

We've also learned that Wells Fargo offered the Huffman's two loan modifications, but the first was $88 more than what they were paying on their mortgage each month and the second shaved off only $56.

"I truly thought it was a mistake," exclaims Tom.

At that point, Tom's frustration with the company's take it or leave it approach was becoming unbearable.

Gary Finklea is now representing the Huffmans and says their frustration is just. "You know they were still getting foreclosure notices the same day they were getting letters saying we can modify a loan," says Finklea.

Finklea says this "dual track" process is a direct violation of the order put in place by South Carolina's Chief Justice Toal. It clearly states that foreclosure hearings and sales can't move forward until an intervention process is completed, which makes sure that homeowners have plenty of time and opportunity to reach an agreement.

Gary tells us, "I've seen first-hand cases prosecuted by the bank's lawyers, even though those lawyers know that the borrowers are still receiving communication regarding the modification process, and they proceed with foreclosure. That violates the Chief Justice's order and in my opinion is an unfair trade practice."

Four and a half years and a staggering $25,000 in attorney fees later, Tom says he feels like David going up against Goliath. However, with more than half the mortgage paid and only 10 years left, he won't back down until he can get a day in court.

"I don't think we're the only ones, by no means are we the only ones. I haven't even talked to Wells Fargo, and they're going to take my house. I don't think that's right. I don't think that's fair," says Tom.

As far as legal action when it comes to the Huffman's case, Wells Fargo tells WMBF News there is no foreclosure sale pending on this home at this time. And legally, they are in a holding pattern.

Back on May 6, the legal team for Wells Fargo filed a motion asking a judge to hear this case without the presence of a jury. The judge can either agree or deny the motion. At this point it's going to be even more waiting to see what the judge decides to do.

Now there's an important lesson to be learned here. The reality is that by the time you reach the age of 40, there's a 43 percent chance of becoming disabled for 90 days or more. And the question is, would you be prepared financially?

For most of us that answer is "no." The Huffmans looked into disability insurance but never purchased a policy, something in hindsight they are regretting. Disability insurance can cost as little as $65 a month and will help fill the financial gap for six months to two years depending on the policy you get.

Timothy Harlow at Allstate Financial Services in Myrtle Beach gave us a quote based on the "average" person. You can contact him for more information specific to your needs at 843-293-4444.

If you find yourself in financial distress and are on the verge of losing your home, Wells Fargo and several other banks offer what's called "home preservation workshops" where you can get one-on-one counseling with a specialist about your specific situation.

Wells Fargo has held more than 50 across the country over the past three years, but according to the bank's website there are only two scheduled, and they aren't being held in the Carolinas.

You can expect a phone call and a letter in the mail letting you know ahead of time of when one will be coming to the area.

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