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Mortgage nightmares, one tale at a time

To paraphrase from words often attributed to Josef Stalin -- a million bank foreclosures is a statistic, but a single family losing its home is a tragedy.

So Richard Zombeck has set out help people tell those stories -- one at a time -- at a Web site named

There's Diane Casella from Florida, who says she can pay a considerable amount towards her mortgage, but needs a break because of sinking income and property value.

"I have never asked for mortgage help in my life, but now that I just need a mortgage that is 31 percent of my gross income, the bank acts like I do not even exist," she writes on the site. "It was so easy to reach them five years ago, but now they have turned a deaf ear to my family's plight."

And there's Mike Dillon from Manchester, New Hampshire:

"No one can live in a situation like this, for this long without breaking down. Because of being in legal limbo for all this time, my fiancée and I have postponed our wedding and been unable to start the family we both want," he says. "This has ruined me financially... I can't even refinance away from them. I go through large bottle of antacid like you wouldn't believe. I am stuck in limbo, I can't sell the house without taking a huge loss, I couldn't buy a new house because they destroyed my credit."

Zombeck's raw Web site, which encourages consumers to name names and be as specific as possible about their mortgage woes, has quickly garnered attention around the ranks of frustrated homeowners.  He's also gotten at least some attention from Congress, and Zombeck is now part of the lobbying effort by consumer groups this week who are advocating for the controversial financial reform legislation currently being considered by the U.S. Senate.

On Tuesday, the Massachusetts resident is meeting with staff from Sen. John Kerry's office to share his own story and stories from as part of a visit by The Massachusetts Public Interest Research Group (PIRG). He's also trying to personally deliver his package of first-person tales to his state's other senator, newly-elected Republican Scott Brown. But PIRG attorney Elizabeth Weyant, who is arranging the meetings, says Brown's office has yet to reply to requests.

"Richard has done a really good job of making himself an expert on the issue," she said. "It's really personal for him. He gives a face to the need for financial reform."

Weyant said one compelling element of Zombeck's site, in addition to the number of struggling homeowners who tell their tales, is the similarity of their sagas.

"Even if we're talking about different banks, it's the same story, again and again," she said.  Collectively, the tales show how badly the mortgage modification process is working, she said.  "To a bank, a mortgage looks like a pile of money. To a person, that's their home."

Among the sagas with similar storylines is the tale of Angie Burke, of Reading, Penn., who first contacted her bank about a possible mortgage modification in December 2008.

"I was fully unprepared for the duration and insanity this process can bring," she writes in her story. After a year of filling out paperwork and waiting for bank response, she received this dismal proposal concerning one of the two loans on her home:

"The best they could do for us was lower the interest rate from 6.75% fixed to 6% fixed, saving us a whole whopping $90 a month!  How is that going to help?!  Our income is half of what it used to be."

While the site invites complaints from any consumer who is frustrated with any bank lending practices, nearly every story Zombeck has collected so far deals with the paperwork madness that has engulfed participants in the Making Home Affordable program.  When announced last year, the program was designed to help up to 4 million struggling borrowers, but currently only 230,000 mortgages have been permanently modified.

The complains have led to a series of revisions in the program, including sweeping changes announced by the Obama administration last month -- still, another 900,000 foreclosure notices were received in the first three months of 2010, according to RealtyTrac.'s John Schoen has been chronicling the woes of the Help for Homeowners program (HAMP) for months. In January, I wrote about a woman named Deb Franklin, whose three-month trial modification had turned into a 10 month waiting game that included a foreclosure notice.

But Zombeck's Web site shows that Franklin's Kafka-esque nightmare is hardly an exception.

"Those stories are not unique," he says. "It is depressing and goes further...300,000 foreclosures a month further," he added referring to the estimated number of homes that will receive a foreclosure notice this month.

Virginia W., from Morgan Hill Calif, didn't want to share her last name. She's also at wit's end after being rejected, again, for a modification based on something called a "gross eligibility."

"After calling for the past two weeks to find someone at the bank who knows what 'failed gross eligibility' means and spending hours on the phone I am now being told they are going to review my package again since everyone I have talked to cannot see why we were denied," she says. "Back at square one 8 months later all the while getting no help and slowly racking up credit card bills the whole time just trying to stay afloat and not wanting to walk away."

Zombeck has his own tale of mortgage modification "hell." He bought his house in a Boston suburb at the market's peak in September 2006. It was his first home purchase, and he followed the advice of a realtor and purchased it with no down payment, thanks to two adjustable-rate mortgages that started out at around 8 percent would climb towards 12 percent. He was promised that refinancing would be easy. It wasn't. And when his wife lost her job at Harvard University, their world began crumbling.

Two years later, he's still working on the details of his loan modification with Florida-based Ocwen Financial Corp., which is servicing his loan. During the saga, he began writing an unpaid column about his situation for The Huffington Post called the "Eyes and Ears Mortgage Specialist."  He thinks that column has helped push his mortgage modification process forward.

"I think the banks are intentionally stalling, hoping the market will turn around, so they can then kick everybody out of their homes, sell them, and turn a profit," he said

Paul Koches, Executive vice president and general counsel at Ocwen, said he couldn't talk specifically about Zombeck's loan, citing privacy concerns. While he acknowledged some general frustration with the loan review process among all loan servicers, he said his firm has been aggressively arranging modifications for its customers. Of 400,000 loans it services, Ocwen voluntarily modified 90,000 even before the Help for Homeowners program was announced in March 2009.  Koches did not offer a specific of number of modifications since then, but said the pace had "proceeded at the same pace."

"We're very proud of our leadership not only in HAMP but in loss mitigation in general," he said. "We believe that keeping people in their homes is better for the homeowner and better for the owner of the loan, too." is Zombeck's attempt to share the harsh spotlight of social media on banks and motivate them to aid other struggling homeowners.

Zombeck, a free-lance journalist and former help desk technician for software firm Adobe, has used the social media megaphone before with great success. For three years, he has run a popular Web site named SH** (name intentionally obscured). It chronicles the actions of misbehaving companies and offers social criticisms.  It also gives frustrated readers a place "to rant."  The site also has nearly 10,000 Twitter followers.

Last year, Zombeck was involved in a dispute with AT&T over an $800 deposit the firm insisted on when he and his wife tried to save money by combining their iPhones into a discounted family plan. The deposit was required because Zombeck's  credit score had plummeted, even though he'd been an AT&T customers for more than 10 years. After months of frustrating back-and-forth discussion, Zombeck tweeted about the dispute to his SH**HEADERY followers.

"Wonder if Apple knows that AT&T charges an $800 deposit to merge to a family plan," he wrote in a November 2009 Tweet, and signed the note with a profanity. Only 52 minutes later, a woman representing AT&T wrote to him and offered to help. Within a few days, the issue was resolved.

"It had taken two months, but I bypassed about 15 unreasonable people," Zombeck said.   "She was very nice. Once I got to that level of customer support, (AT&T) was great."

Zombeck is hoping might offer similar short-cuts to "reasonable people" inside banks who are working on mortgage modifications," he said.

"I've gone from unpaid journalist, to accidental activist, to unintentional lobbyist in a matter of months," he said. Now, he hopes to collect enough tales of frustration that they will spur change in Washington.  "(The) stories will serve as irrefutable evidence that Congress needs to reform the way Wall Street has been doing business."

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