In October 2006, 57-year-old Dianna Cobb gave her car back to Nitro Dodge. She needed the car payment money to make her mortgage payments.“It killed me to hand the guy the keys,” she said, “but I’ve got to have a place to live, and I can’t live in my car.”To get to work, she rides a KRT bus from Elk Hills to Charleston and back.Her 401(k) account is nearly empty. She cleaned it out to help pay the mortgage, after her payments jumped from $294 to $436 a month.
She brings home $322 a week from her full-time job.At night, she rides the bus home to her small, red rancher home. She built it after Interstate 79 sliced through her family home near Clendenin in the 1970s. “I like it out here,” she said. “You can see the stars. When you’ve got something on your mind, stars help.”Cobb is a poster person for the kind of mortgage borrower Congress is now urging lenders to help, said Norman Googel, an attorney in the consumer protection division of the state attorney general’s office. “Somebody who has the ability to get back on track, but has been knocked back by unexpected life events.”In 2001, Cobb took out a $35,000 mortgage loan to fix her roof, paint the house and make repairs. While she painted, her mortgage was sold to Wells Fargo Home Mortgage.Then, Wells Fargo Insurance Services — another Wells Fargo subsidiary — bought Acordia, where she worked. “At first, I thought that would be good,” she said. She figured that, if she ever had a mortgage problem, Wells Fargo would treat her well, as an employee. “I’ve never been in trouble or gotten written up,” she said. “I meet my quota. Never been late or missed time without permission.”In 2006, though, “my diabetes, blood pressure and cholesterol all went sky-high at once, and it took three months to get it stabilized,” she said. She was slammed with hundreds of dollars in unexpected medical co-pays per month.“I fell behind on my mortgage payments,” she said. “I admit that, right up front.” So she contacted Wells Fargo Home Mortgage and asked if they could work out a way she could catch up.She did exactly what Treasury Secretary Henry Paulson is now urging distressed borrowers to do. Call your mortgage dealer. See if they can make adjustments to get you past the rough spots.However, Cobbs’ troubles peaked last year, before extensive media coverage of the mortgage crisis began.Wells Fargo Home Mortgage tried to foreclose on Cobb after she requested a catch-up plan. Then they offered her a “forebearance” plan that hiked her mortgage payment 50 percent for 13 weeks and forced her to sell her car.“My employer is trying to make me homeless,” she said.
She is still in limbo. Every day, in her job, she talks with people in places like Texas and Alabama, helping them unsnarl their health insurance problems. “I forget my own troubles, figuring out theirs,” she said.After Wells Fargo tried to foreclose on her, she panicked. “I couldn’t sleep. I couldn’t eat. I couldn’t do anything. My blood pressure went up. Everything messed up.”She called the state attorney general’s office. They referred her to a public-interest firm that takes mortgage cases for low-income people.Mountain State Justice filed suit against Wells Fargo Home Mortgage on her behalf, alleging illegal debt collection, breach of good faith and fair dealing, and illegal return of payment.“So now I’m suing my employer,” she said, “but I didn’t know what else to do.”Wells Fargo Home Mortgage spokeswoman Deborah Bloom said Wells Fargo does not comment on pending litigation.
In September, John Stumpf, Wells Fargo CEO told the San Francisco Chronicle that Wells Fargo investors have a say in whether Wells Fargo grants a loan modification. “Many times, there are four or five investors in a mortgage. These things are cut up and sliced and diced in a variety of ways,” he said. “For an investor, it’s an economic decision. Was it more valuable to keep the customer in the home versus taking it back?”‘Often poorly paid’ workers wield a lot of power
Cobbs’ mortgage is one of at least 15,765 West Virginia subprime mortgage loans, according to the national Mortgage Bankers Association. West Virginia has the second-highest delinquency rate in the country for subprime mortgages, both adjustable and fixed rate, so Cobb has some company.She has a fixed-rate mortgage. “The media focus has been on adjustable-rate subprime mortgages, and that leads people to believe fixed-rate mortgages are totally safe,” Googel said. “That’s not true.”When the borrower asks for a modification or repayment plan, they need to understand that the mortgage company can rewrite the original deal in any way the borrower will agree to, he said. That’s what happened to Cobb.In 2006, after she requested help, Cobb talked with people in Wells Fargo Home Mortgage’s South Carolina and Wisconsin offices. “It wasn’t exactly a family experience,” she said.People who work at mortgage lender call centers have a lot of power and leeway to make decisions about people’s mortgages and futures, observed Kathleen Keest, lead counsel for the Center for Responsible Lending, based in Durham, N.C. “They’re often poorly paid, and there is very high turnover. There may be multiple offices that may or may not communicate well with each other, and sometimes they get a lot of pressure to get results.”The summer after Cobb asked for help, she received a bewildering array of contradictory letters and papers from Wells Fargo Home Mortgage and their associates. She talked with and heard from people in the South Carolina and Wisconsin offices.“It was like the right hand didn’t know what the left was doing,” she said.A sampling:s A June 19 letter from Wells Fargo said it would take 30 days to review her request for a repayment plan.s A June 22 letter from Wells Fargo told her that her file was being referred for foreclosure.s A July 31 letter from Wells Fargo said they were working on a reinstatement plan for her.s An Aug. 4 letter from Riverside Trustee Co. said Wells Fargo directed them to sell her house on Aug. 25.s An Aug. 16 letter from Wells Fargo contained a “forbearance” plan that required her to pay $437.92 payment for 13 months.“By the time I got that August 16 letter, I was so confused and desperate, I felt like I had to sign it,” she said.This is the point where the person with the fixed-rate mortgage needs to be careful, Googel said, but at that point, they are often not in much of a position to negotiate. So they sign questionable agreements.The Gazette-Mail repeatedly tried to contact Wells Fargo Home Mortgage representatives for comment. They did not return calls.Earlier this summer, Wells Fargo Home Mortgage announced that it no longer would buy subprime loans through mortgage brokers. It closed the South Carolina and Wisconsin offices that Dianna Cobb dealt with.In the past six years, Wells Fargo has foreclosed on 493 West Virginia homes, according to a 55-county count by Mountain State Justice. In 2006-07, Wells Fargo Home Mortgage and affiliates foreclosed on more West Virginia homes (139) than any other company.Cobb is still worrying and waiting. “The lawyer told me they can’t foreclose while the lawsuit goes on, and I guess that’s good,” she said. “but I just don’t understand why all this had to happen in the first place.”Last fall, after she made her third payment on the repayment plan her mortgage company gave her, they sent her check back, saying she didn’t qualify by their requirements. “And I called them and said, “You chose me when you bought my loan. I didn’t pick you. If I don’t qualify, why did you pick me?That question is being asked on the national level. Rep. Shelley Moore Capito, R-W.Va., said she will participate Wednesday in markups on a sweeping bill that would give lenders much more responsibility and liability related to the loans they buy.Cobb is glad to hear it, although she figures it will affect only future borrowers. “I’m still worrying from day to day to day, what they’re going to do next,” she said. “Whether I’m going to come home and be locked out. Whether there’s going to be a ‘For Sale’ sign in my yard.”To contact staff writer Kate Long, use e-mail or call 348-1798.