Help Me Howard: Loan Modification

WSVN -- If you think this has been a bad year for you, compare notes with Ruth Torres.

Ruth Torres: "I literally went from making almost a hundred grand a year to very very little. You're talking 80 percent cut."

Ruth lost her job in human resources, but this full time single mom has three children to raise and can't slow down to moan and groan.

Ruth Torres: "You build resiliency, and you know you're going to be fine. You just have to put a little more water in the soup and cut the sandwich up one more time."

Ruth pays for the watered down soup with unemployment checks and an occasional part time teaching job. The hard times have made her an expert in cutting corners, but she can't seem to figure out another field -- banking.

Ruth Torres: "I just want banks to treat their customers like they're customers they want to keep."

When Ruth couldn't make her $800 monthly mortgage payment, she tried to get a loan modification -- and tried and tried.

Ruth Torres: "You've got to send in a big packet, bank statements, taxes and everything."

Ruth would send in the paperwork, but she says the bank would lose it.

Ruth Torres: "I've sent in four packages, at least three in the last six months."

Ruth couldn't get the bank to focus on her loan modification, but they did pay attention to the mortgage she wasn't paying.

Ruth Torres: "The house went into foreclosure."

Finally, after nearly a year, the bank offered to lower her monthly mortgage from $800 to $750, and just temporarily -- for three months. This is not what she needs.

Ruth Torres: "I don't want a temporary solution. I want a long term one. I felt it was a game."

Ruth says she understands she owes a debt and is willing to make payments because she doesn't want to lose her home, but she says getting help under President Barack Obama's modification program has been a waste of time.

Ruth Torres: "It's not really trying to do what I thought the legislation was about, which was helping families keep their homes."

The Obama plan was supposed to get banks to rework monthly mortgages to allow people to save their homes, but I can't tell you how many people have told us this year that the banks aren't working with them at all. So Howard, what can people like Ruth do?

Howard Finkelstein: "Here is the simple problem. Legally, the Obama bill has no teeth. The banks get money from Uncle Sam for every loan they modify, but if they refuse to modify a loan, there is no punishment and no help for the customer."

When we contacted Chase, a representative told us Ruth did not qualify for Obama's Home Affordable Modification Plan, or HAMP, and that with unemployment and her part time teaching job she makes too much money. When we asked why they didn't tell her she didn't qualify for Obama's modification, they claim they did in October. Ruth says no one told her that.

The news got worse. As we started asking questions, we found out Chase is charging Ruth $16,000 for interest and fees on her loan sinking Ruth into a bigger hole. Howard says do not give up.

Howard Finkelstein: "First of all, keep battling your bank. Be the squeaky wheel. At the same time, contact your congressperson or U.S. senator. Let them know the bill passed to help you is not helping at all. If enough complain, maybe they will pass a law that has teeth in it."

Ruth says she hopes her story will show homeowners who want help aren't getting helped by the banks and the federal government.

Ruth Torres: "People that are in foreclosure are not just the people who are trying to take advantage of a system and just milk it and stay some place as long as possible. There's a lot of people who are trying to stay in their house that are responsible and trying to do the right thing."

The bank did tell Ruth they are trying to find another loan modification program for her. We are also hearing from lawyers who tell us they are having success stalling foreclosures for months -- even a year or two.

But most people are like Ruth. They don't want to stall the inevitable; they want to find a way to afford a mortgage to save their home.

Home sweet home turned into a house of headaches? Ready to modify your situation? Bank on us. It's a foregone conclusion. We won't forget you and will try to foreclose on your problem.