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St. Pete homeowner faces loan modification confusion

Staff photo by PAT BRAMMELL

Tricia Brady is worried that the house she has owned for almost two decades could come under foreclosure.

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By STACIE SCHAIBLE

News Channel 8

Published: October 14, 2009

ST. PETERSBURG - Tricia Brady thought she was one of the fortunate homeowners to have her mortgage modified under the federal government's Making Home Affordable program.

But, it turns out, she isn't so lucky.

Back in March, when the Making Home Affordable plan was announced, Brady contacted her mortgage company, EMC, to check into getting a loan modification.

By June, Brady said, EMC had cut her payments from about $1,000 a month to $496.

"Then on the fourth month, they send me the past due balance and tell me I'm three months overdue and they will foreclose on this property,'' Brady said.

Her mortgage company said she owes a payment of $3,500. A company spokeswoman said Brady was never part of the government program, but had been placed in one of the mortgage lender's repayment programs.

Under the government's loan modification program, Brady's interest rate could have been reduced to as low as 2 percent to provide Brady with a payment she could afford. Brady's current 8.6 percent loan rate was never reduced.

The program can reduce a borrower's interest rate to get the loan payment to equal 31 percent of the homeowner's gross monthly income.

A spokeswoman for J.P. Morgan Chase, the parent company of EMC, said the investor group that owns Brady's loan would not agree to Brady being placed in the Making Home Affordable program. The spokeswoman said she would not identify the investor group because it is a Chase client. EMC only services the loan.

"Some investors will not allow Making Home Affordable modifications because they cut the value of their investments too much — enough so they are losing money on their investment," the spokeswoman said. "Investors don't have to tell us why they decline a modification. It is not in our control."

Now Brady is worried that the house she has owned for almost two decades could come under foreclosure.

Brady said she thought the repayment agreement was part of a loan modification.

"Had I known this, I would have struggled along with the mortgage I had,'' she said. "I love my house. I mean, I've crawled through the ceilings, I've done all my own central heat and air … It hurts because this is where I raised my daughter for 18 years.''

The Chase spokeswoman said the company has apologized for any confusion. She said one of the company's best loan counselors called Brady and was helping her understand her options.

"I'm very just disappointed,'' she said. "This is America. This is the American dream, you work all your life. I'm 50 years old and I've worked all my life and just tried to have a little modest home.''

News Channel 8 reporter Stacie Schaible can be reached at (813) 225-2739.

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