Main Street

Why We Need An Investigation: Alissa’s Story

The following is a guest post from Working America Member Alissa Kowal from Pittsburgh, Pennsylvania

I am so happy to see that in just 10 days, over47,000 people participated in Working America’s campaign to hold big banks accountable for their unethical foreclosure practices.

I am a Working America member, a Pittsburgh native, a single mother of three, and a Duquesne University graduate. I have worked in an array of fields, including interior design, real estate, and architectural sales.

A few years ago, one of the companies I worked for went bankrupt due the housing and construction crisis in America. As challenging as that experience was, it is not the worst encounter I have had with unethical bank practices.

In the spring of 2009, just after the federal program to assist homeowners was established by the Obama Administration, my mortgage company sent me a notice saying that I may qualify for home mortgage remodification. I called my bank, and it took them just ten minutes over the phone before they let me know that I qualified for a modification, and they gave me a lower payment.

After following the modification payment plan, to my surprise I received a foreclosure notice in the mail. The bank informed me that my modified payments did not actually apply to my mortgage. I was then “re-modified” several times, each time at a different amount. I again maintained my payment agreements, yet still continued to receive foreclosure notices. None of the payments that I made went to the balance of my mortgage or the interest that I owed, they were applied to “fees” that the bank added to my account for late and missed payments and my tax escrow account.

After receiving my third foreclosure notice I contacted my State Representative who sent me to Community Action Southwest. They assisted me in dealing with the bank to ensure they followed the remodification guidelines they had been ignoring. I was finally refinanced, with no credit check or financial documents.

I am now stuck with a mortgage that is fifteen years longer than it originally was. The bank took all the modification payments I made and, after applying them to escrow, kept the rest as profit. They decided those months were “missed payments” and added that sum to the original mortgage, increasing it by $25,000. My equity is completely gone and my credit is destroyed.

Per Community Action Southwest, I am one of hundreds of homeowners in my area who have been misled by banks like Wells Fargo and Bank of America. I feel lucky that I have experience in business and real estate, because I knew something ethically was wrong. How many other people went through this and simply had no idea what to do in such a complicated financial situation?

Right now, the Obama administration, the Department of Justice, and the banks are discussing what consequences the banks will have to face because of their exploitation of the American taxpayer, the American homeowner, and the federal modification program. Last night, the President has also announced the creation of a special unit to investigate financial crimes.

We need to ensure that any final agreement includes a thorough investigation into bank practices, and sufficient financial assistance to homeowners struggling due to unfair practices.

Tags: foreclosure crisis, foreclosures, Pennsylvania, Pittsburgh