- Detroit Free Press
DETROIT -- Kim Orsi's bank told her she needed to earn more money to qualify for a federal loan modification program. So she started a pet-sitting business, only to be told she made too much to qualify.
Patricia McClain lost her Clawson, Mich., house after her bank offered her loan terms that were actually higher than what she had paid on the home she had lived in for decades.
Sgt. Eric Spalding returned from Iraq with brain injuries only to spend months wrestling with his lender to keep his home - what he calls his safe haven.
Patricia McClain lost her Clawson, Mich., house after her bank offered her loan terms that were actually higher than what she had paid on the home she had lived in for decades.
Sgt. Eric Spalding returned from Iraq with brain injuries only to spend months wrestling with his lender to keep his home - what he calls his safe haven.
They are among tens of thousands of homeowners who have sought - some successfully, many not - to navigate the troubled foreclosure relief programs created by the government to keep people in their homes.
When he introduced the Home Affordable Modification Program, or HAMP, in February 2009, President Barack Obama promised it would help 3 million to 4 million borrowers modify their mortgages. To date, fewer than a million have been given relief. More borrowers were rejected or dropped out of the program.
For many struggling homeowners, like some of the people profiled today, the programs have left them worse off financially than before they applied.
The people in these stories have battled banks and the taxpayer-funded mortgage giant Fannie Mae in a bid to pay their mortgages and save their homes. Some were customers of Bank of America, the nation's largest mortgage servicer.
For 18 months, saving the little house on the slab foundation and her organic garden became Ann Damon's full-time job.
Damon of Lodi Township, near Ann Arbor, Mich., couldn't afford her monthly mortgage payments when the interest rate ballooned and her son with cerebral palsy needed major surgery.
She asked Litton Loan Servicing, a Houston company that services her mortgage, for a loan modification under the Obama administration's Home Affordable Modification Program, or HAMP.
She faxed Litton documents. And more documents. She learned to make duplicates. She kept lists of people she talked to in Texas. Finally, she got a fax machine and copier.
"Litton deliberately makes it complicated," she said. "They would add fees, and the next month, they would say you didn't pay such-and-such, and that went on your credit report. Instead of one late fee a month, they would charge two."
She said she once called Litton after being charged for an appraisal and was told, "We have a right to drive by the house and appraise the house and charge you for it."
She said the fees "sounded like a bunch of mumbo jumbo."
Litton spokeswoman Donna Marie Jendritza would not discuss Damon, citing privacy rules, but said HAMP "requires customers to submit certain documents in a complete and accurate manner within a specific time frame in order to be evaluated for a trial modification."
Kurt Eggert, a law professor at Chapman University in California who has testified before Congress about mortgage issues, said such fees are troubling, but not unusual.
He said it is very profitable for mortgage servicers to pile up fees from borrowers. "The sweet spot for servicers is for borrowers to pay late fees all the time," Eggert said.
After four months of faxing documents and paying late fees, Damon got a three-month trial modification for her home in Lodi, Mich., which she describes as a "little bit of heaven."
But she said when she asked for a permanent modification, Litton said it hadn't received her documents.
Worried she would lose her home, Damon turned to a loan counselor at the Washtenaw County Treasurer's Office. She sent all her documents again and got another three-month trial modification.
Finally, Litton agreed to a permanent modification that lowered her monthly payments from $1,100 to $395.
Damon, a part-time teacher, said it took her 18 months in all.
"Had I not been persistent and personable ... I don't think it would have happened," she said. "I love this house. It's a cross between a cabin and being in the city."
Scott Lawrence had just finished graduate school to become a surgical physician's assistant when he bought the colonial on Big Timber Drive in Grand Rapids, Mich., in 2006.
His plan: Live in the 3,000-square-foot home for a few years with roommates, who would help him with his mortgage payments. He then planned to sell the home and use the money to repay student loans.
Lawrence installed hardwood floors, new appliances and fresh paint, "hoping to make a wise investment."
Then the economy collapsed and the house he bought for $312,000 lost nearly a third of its value. His roommates left, and he asked Bank of America for a lower interest rate.
Lawrence said he kept making payments but was told by the bank he could not get interest relief if he continued.
"Every time I would call, they would ask, 'How many payments have you missed?' Well, here I'm trying to do the right thing and not miss a payment, and they tell me that unless you miss a payment there's nothing we can do. That was mentioned every time I called."
Under the federal government's Home Affordable Modification Program, or HAMP, borrowers do not have to miss a payment to be helped.
His lawyer, Paul Doroh of Sterling Heights, Mich., said Lawrence's experience illustrates how banks frequently give borrowers bad information when they apply for HAMP, a finding that has been corroborated by government studies of the troubled relief program.
The banks, Doroh said, "know if we run these people through the system, they'll give up, they'll move on, they'll stop fighting. And the rare occasion that they don't - that's the cost of doing business."
Although banks have been roundly criticized for misinformation during the foreclosure crisis, not everyone agrees that HAMP was intended to help borrowers like Lawrence, people who stretched what they could afford on a mortgage to cash in on the housing bubble.
"They thought that real estate would be a quick way to get rich," Kim Luu, editor of Money and Risk and principal in a financial management firm, blogged on people who invested in homes before the real estate market collapsed. "These include many people who were brain-washed into thinking that owning a home is the pinnacle of success in America."
In May 2009, three months after the Obama administration launched HAMP, Lawrence stopped making payments on his Fannie Mae loan and sought a modification.
But the modification Bank of America offered lowered his monthly payments by just $200 - from $2,450 to $2,250. He said that was not enough.
With the threat of a foreclosure sale looming, he said, a company affiliated with Bank of America approached him last August with a better option: a deed in lieu of foreclosure. That would allow him to walk away from the house, losing only what he had put into it.
Lawrence said he agreed.
"That gave him even more confidence that the system was working for him, that he had finally found the right avenue," said Doroh, his attorney.
But the next month the house was sold at auction.
Bank spokeswoman Jumana Bauwens said the home was sold because the bank did not receive all the correct paperwork to complete the deed.
Lawrence and his wife moved out before Fannie Mae could evict them in March.
He and Doroh said they could never get the bank to explain why the deed in lieu didn't go through. And he said he fears that Fannie Mae will try to collect the money he still owes on the mortgage.
"All I was asking was for them to lower the interest rate to make it more affordable, that was the bottom line. I'm a taxpaying citizen. I've never been in trouble. I had a pristine credit score. I wanted to do the right thing, and I just met roadblock after roadblock," he said.
Lawrence took a new job in May in Sarasota, Fla., where he said he rents an apartment.
But his home in Michigan is gone. "It just left me in shambles," he said.
Critics of the Home Affordable Modification Program say it has cost some people the very homes it was meant to protect.
Patricia McClain says she is one of them.
The disabled grandmother had fallen behind on her loan in 2009, but said she had repaid the money when she got a letter that November from Bank of America offering to modify the loan on the Clawson home she had owned for 34 years.
McClain, 59, who lives on $1,000 a month from Social Security, said a bank employee told her that, under the federal program, known as HAMP, the bank could reduce her payments from $535 a month to less than $500.
McClain told the bank she would consider its offer on the Fannie Mae loan - but that she wanted to handle taxes and insurance herself because she was negotiating with the city to lower her tax payments.
Despite her request, the bank paid her taxes, raised her insurance and modified her loan payment to $1,908 - nearly four times what she had been paying on her mortgage.
The bank said it made the payments to protect its interest in the property.
After she complained, Bank of America modified her payments to $971 - again, far more than the $535 she was already struggling to pay each month.
Again, McClain complained. This time, she said, a bank employee told her to disregard the offer and send monthly good-faith payments of $431.
While she was making those payments - some of which the bank returned - her loan was referred to the bank's foreclosure department. She said bank employees assured her that this was a formality and not to worry - as long as she was making payments.
On June 22, 2010, her home was sold at a sheriff's auction.
"I did everything they wanted me to do," she said, "and all I know is that, within six months, my house was being sold. To me, it was a three-ring circus, and I was in with the lions."
She sued Bank of America and Fannie Mae. In response, lawyers for the bank said McClain defaulted on her loan when she was late on her 2009 payments and that she declined a loan modification last year. Upon further review, the bank said, she was ineligible for any further modification.
Fannie Mae began eviction proceedings in January. McClain's Southfield, Mich., lawyer, Kenneth Hardin II, got the eviction delayed until July, but his lawsuit against Fannie and Bank of America was dismissed in May.
Hardin said the case was doomed because his client's negotiations with the bank to make the good-faith payments were conducted by phone, and were never put in writing.
"If a mortgage company calls you and says we will promise you X, Y and Z or another benefit to you, if they don't put that in writing, it's not enforceable. The mortgage company doesn't tell you that," he said.
McClain said she feels misled and bereft.
"I'm out of money. I'm out of hope. I'm out of everything. I don't have any money to fight these giants, and I don't have any way to get any money," she said. "They even have the government to bail them out. I don't even have a car."
McClain said she made a final plea to Fannie Mae to allow her to stay and make payments on her home, but was told her case had "gone too far."
McClain once worked in purchasing at Comerica Bank before being infected by West Nile virus in 2002. She said she suffers memory loss, diabetes and arthritis. Sometimes, she can't walk or use her hands.
She grew up two doors from the lot where she built the home in 1977. She paid off that loan, but borrowed against the home to pay for one daughter's college and for the weddings of two other daughters.
Her credit shot, McClain now lives with a daughter in California - "like a ship without a port," she said.
She said she thinks about the Clawson home all the time, going from room to room, if only in her mind. Her grandchildren still live on the street. They were close enough to pop over daily. Now they're more than 2,000 miles apart.
"All I asked was for someone to hear me out," she said. "But nobody listened to me."
"They ruined my life."
When Kim Orsi's marriage collapsed and her husband moved out last year, she could no longer afford the mortgage.
But after researching the U.S. government's foreclosure prevention initiatives, Orsi figured she was a good candidate for the Home Affordable Modification Program, or HAMP.
She said she called Bank of America and was told - wrongly, it turns out - she had to stop making payments before getting help.
Reluctantly, in May 2010, she didn't pay her mortgage - a tough decision for a woman who said she prided herself for doing things correctly when she bought the modest ranch in Pittsfield Township, Mich., in 2003.
Orsi, a hairstylist, said Bank of America told her she needed to make more money - and lose her debts. So she started a pet-sitting business and, by mid-2010, had paid off her debts, including her car.
Orsi said she spent roughly 20 hours a week sending records and trying to persuade the bank to modify her loan.
"I met every deadline. I never lost documents," she said.
At a December meeting, a bank representative said she qualified for HAMP.
But later that month, Bank of America denied her modification, telling her she made too much. Yet another letter said she didn't make enough.
Orsi said the rejections were based on incorrect numbers. The bank also wanted a quit-claim deed removing her ex-husband from the home. But he had left the country.
Orsi's attorney, Paul Sher of Legal Services of South Central Michigan, questioned the bank's demand for the deed because Orsi took title to the home during her divorce.
Bank of America spokeswoman Jumana Bauwens said the owner of the loan - Fannie Mae - was responsible for denying the modification.
Orsi sued Bank of America and Fannie Mae in March.
"I don't want people to feel sorry for me," she said. "I want them to be angry because the banks can deny you a modification, even if you qualify."
Sher has persuaded the bank to delay a foreclosure sale while she fights in court.
"If I lose the house, I won't have the 1.5 acres to do the pet-sitting," Orsi said. "I now feel that HAMP was a farce."
"And in following the bank's instructions, my excellent credit is now ruined."
After Sgt. Eric Spalding returned from Iraq with a traumatic brain injury and a Purple Heart, his brick ranch in Ypsilanti, Mich., was his cave, his only haven.
So when his lender, GMAC Mortgage, started foreclosure proceedings, Spalding wasn't going to let the company take the house.
"I didn't have anything else," said Spalding, a gunner who guarded convoys in Iraq for the Michigan National Guard and has a son, Eric. "Where am I going to live? Under a bridge?" he asked.
Like many borrowers seeking a loan modification, Spalding almost lost his home at sheriff's sale while seeking help with his mortgage payments.
He was wounded in 2007. His troubles began when he returned home and failed to pay his 2008 property taxes. His military pay had been cut in half, a job at General Dynamics was outsourced, and he said he didn't know he was eligible for disability until later.
GMAC paid the taxes for him to preserve its interest in the property, then rolled them into his mortgage, raising his payments from $1,100 to more than $2,300 a month.
That put him behind on his payments, said Moonson River Eninsche, a foreclosure prevention counselor with the Washtenaw County Treasurer's Office who intervened to help Spalding.
GMAC and Spalding don't agree on what happened next.
Eninsche said GMAC offered Spalding a three-month trial modification in April, with monthly payments of about $1,430.
According to Spalding, GMAC then offered him a permanent modification. He signed the papers and said he believed his monthly payments would remain $1,430. Yet the next month, he said, GMAC billed $2,300.
Eninsche said it appeared to him that GMAC was processing two conflicting applications at the same time.
According to GMAC spokesman Jim Olecki, Spalding did not qualify for the federal Home Affordable Modification Program, or HAMP, because he earned too much.
GMAC described several efforts to lower Spalding's loan payments under other programs. In each case, Spalding stopped payment or failed to write a check, forcing GMAC to cancel the deals, Olecki said.
In October, Eninsche said, GMAC hired a lawyer and began plans to sell the home at auction.
After repeated calls to GMAC, Eninsche said, GMAC called off the sheriff's sale and in November agreed to a permanent modification that lowered Spalding's monthly payment to around $1,450, including taxes and insurance.
Deb Odom Stern, an Ann Arbor Realtor who also helped Spalding, said she made sure GMAC knew it was dealing with disabled veteran.
Spalding said the experience has resulted in the "total dismantling of my life and credit."
He said he traded one of the most dangerous jobs in Iraq for a yearlong fight with GMAC.
It was a fight worth fighting, he said.
He is home for good.
When he introduced the Home Affordable Modification Program, or HAMP, in February 2009, President Barack Obama promised it would help 3 million to 4 million borrowers modify their mortgages. To date, fewer than a million have been given relief. More borrowers were rejected or dropped out of the program.
For many struggling homeowners, like some of the people profiled today, the programs have left them worse off financially than before they applied.
The people in these stories have battled banks and the taxpayer-funded mortgage giant Fannie Mae in a bid to pay their mortgages and save their homes. Some were customers of Bank of America, the nation's largest mortgage servicer.
For 18 months, saving the little house on the slab foundation and her organic garden became Ann Damon's full-time job.
Damon of Lodi Township, near Ann Arbor, Mich., couldn't afford her monthly mortgage payments when the interest rate ballooned and her son with cerebral palsy needed major surgery.
She asked Litton Loan Servicing, a Houston company that services her mortgage, for a loan modification under the Obama administration's Home Affordable Modification Program, or HAMP.
She faxed Litton documents. And more documents. She learned to make duplicates. She kept lists of people she talked to in Texas. Finally, she got a fax machine and copier.
"Litton deliberately makes it complicated," she said. "They would add fees, and the next month, they would say you didn't pay such-and-such, and that went on your credit report. Instead of one late fee a month, they would charge two."
She said she once called Litton after being charged for an appraisal and was told, "We have a right to drive by the house and appraise the house and charge you for it."
She said the fees "sounded like a bunch of mumbo jumbo."
Litton spokeswoman Donna Marie Jendritza would not discuss Damon, citing privacy rules, but said HAMP "requires customers to submit certain documents in a complete and accurate manner within a specific time frame in order to be evaluated for a trial modification."
Kurt Eggert, a law professor at Chapman University in California who has testified before Congress about mortgage issues, said such fees are troubling, but not unusual.
He said it is very profitable for mortgage servicers to pile up fees from borrowers. "The sweet spot for servicers is for borrowers to pay late fees all the time," Eggert said.
After four months of faxing documents and paying late fees, Damon got a three-month trial modification for her home in Lodi, Mich., which she describes as a "little bit of heaven."
But she said when she asked for a permanent modification, Litton said it hadn't received her documents.
Worried she would lose her home, Damon turned to a loan counselor at the Washtenaw County Treasurer's Office. She sent all her documents again and got another three-month trial modification.
Finally, Litton agreed to a permanent modification that lowered her monthly payments from $1,100 to $395.
Damon, a part-time teacher, said it took her 18 months in all.
"Had I not been persistent and personable ... I don't think it would have happened," she said. "I love this house. It's a cross between a cabin and being in the city."
Scott Lawrence had just finished graduate school to become a surgical physician's assistant when he bought the colonial on Big Timber Drive in Grand Rapids, Mich., in 2006.
His plan: Live in the 3,000-square-foot home for a few years with roommates, who would help him with his mortgage payments. He then planned to sell the home and use the money to repay student loans.
Lawrence installed hardwood floors, new appliances and fresh paint, "hoping to make a wise investment."
Then the economy collapsed and the house he bought for $312,000 lost nearly a third of its value. His roommates left, and he asked Bank of America for a lower interest rate.
Lawrence said he kept making payments but was told by the bank he could not get interest relief if he continued.
"Every time I would call, they would ask, 'How many payments have you missed?' Well, here I'm trying to do the right thing and not miss a payment, and they tell me that unless you miss a payment there's nothing we can do. That was mentioned every time I called."
Under the federal government's Home Affordable Modification Program, or HAMP, borrowers do not have to miss a payment to be helped.
His lawyer, Paul Doroh of Sterling Heights, Mich., said Lawrence's experience illustrates how banks frequently give borrowers bad information when they apply for HAMP, a finding that has been corroborated by government studies of the troubled relief program.
The banks, Doroh said, "know if we run these people through the system, they'll give up, they'll move on, they'll stop fighting. And the rare occasion that they don't - that's the cost of doing business."
Although banks have been roundly criticized for misinformation during the foreclosure crisis, not everyone agrees that HAMP was intended to help borrowers like Lawrence, people who stretched what they could afford on a mortgage to cash in on the housing bubble.
"They thought that real estate would be a quick way to get rich," Kim Luu, editor of Money and Risk and principal in a financial management firm, blogged on people who invested in homes before the real estate market collapsed. "These include many people who were brain-washed into thinking that owning a home is the pinnacle of success in America."
In May 2009, three months after the Obama administration launched HAMP, Lawrence stopped making payments on his Fannie Mae loan and sought a modification.
But the modification Bank of America offered lowered his monthly payments by just $200 - from $2,450 to $2,250. He said that was not enough.
With the threat of a foreclosure sale looming, he said, a company affiliated with Bank of America approached him last August with a better option: a deed in lieu of foreclosure. That would allow him to walk away from the house, losing only what he had put into it.
Lawrence said he agreed.
"That gave him even more confidence that the system was working for him, that he had finally found the right avenue," said Doroh, his attorney.
But the next month the house was sold at auction.
Bank spokeswoman Jumana Bauwens said the home was sold because the bank did not receive all the correct paperwork to complete the deed.
Lawrence and his wife moved out before Fannie Mae could evict them in March.
He and Doroh said they could never get the bank to explain why the deed in lieu didn't go through. And he said he fears that Fannie Mae will try to collect the money he still owes on the mortgage.
"All I was asking was for them to lower the interest rate to make it more affordable, that was the bottom line. I'm a taxpaying citizen. I've never been in trouble. I had a pristine credit score. I wanted to do the right thing, and I just met roadblock after roadblock," he said.
Lawrence took a new job in May in Sarasota, Fla., where he said he rents an apartment.
But his home in Michigan is gone. "It just left me in shambles," he said.
Critics of the Home Affordable Modification Program say it has cost some people the very homes it was meant to protect.
Patricia McClain says she is one of them.
The disabled grandmother had fallen behind on her loan in 2009, but said she had repaid the money when she got a letter that November from Bank of America offering to modify the loan on the Clawson home she had owned for 34 years.
McClain, 59, who lives on $1,000 a month from Social Security, said a bank employee told her that, under the federal program, known as HAMP, the bank could reduce her payments from $535 a month to less than $500.
McClain told the bank she would consider its offer on the Fannie Mae loan - but that she wanted to handle taxes and insurance herself because she was negotiating with the city to lower her tax payments.
Despite her request, the bank paid her taxes, raised her insurance and modified her loan payment to $1,908 - nearly four times what she had been paying on her mortgage.
The bank said it made the payments to protect its interest in the property.
After she complained, Bank of America modified her payments to $971 - again, far more than the $535 she was already struggling to pay each month.
Again, McClain complained. This time, she said, a bank employee told her to disregard the offer and send monthly good-faith payments of $431.
While she was making those payments - some of which the bank returned - her loan was referred to the bank's foreclosure department. She said bank employees assured her that this was a formality and not to worry - as long as she was making payments.
On June 22, 2010, her home was sold at a sheriff's auction.
"I did everything they wanted me to do," she said, "and all I know is that, within six months, my house was being sold. To me, it was a three-ring circus, and I was in with the lions."
She sued Bank of America and Fannie Mae. In response, lawyers for the bank said McClain defaulted on her loan when she was late on her 2009 payments and that she declined a loan modification last year. Upon further review, the bank said, she was ineligible for any further modification.
Fannie Mae began eviction proceedings in January. McClain's Southfield, Mich., lawyer, Kenneth Hardin II, got the eviction delayed until July, but his lawsuit against Fannie and Bank of America was dismissed in May.
Hardin said the case was doomed because his client's negotiations with the bank to make the good-faith payments were conducted by phone, and were never put in writing.
"If a mortgage company calls you and says we will promise you X, Y and Z or another benefit to you, if they don't put that in writing, it's not enforceable. The mortgage company doesn't tell you that," he said.
McClain said she feels misled and bereft.
"I'm out of money. I'm out of hope. I'm out of everything. I don't have any money to fight these giants, and I don't have any way to get any money," she said. "They even have the government to bail them out. I don't even have a car."
McClain said she made a final plea to Fannie Mae to allow her to stay and make payments on her home, but was told her case had "gone too far."
McClain once worked in purchasing at Comerica Bank before being infected by West Nile virus in 2002. She said she suffers memory loss, diabetes and arthritis. Sometimes, she can't walk or use her hands.
She grew up two doors from the lot where she built the home in 1977. She paid off that loan, but borrowed against the home to pay for one daughter's college and for the weddings of two other daughters.
Her credit shot, McClain now lives with a daughter in California - "like a ship without a port," she said.
She said she thinks about the Clawson home all the time, going from room to room, if only in her mind. Her grandchildren still live on the street. They were close enough to pop over daily. Now they're more than 2,000 miles apart.
"All I asked was for someone to hear me out," she said. "But nobody listened to me."
"They ruined my life."
When Kim Orsi's marriage collapsed and her husband moved out last year, she could no longer afford the mortgage.
But after researching the U.S. government's foreclosure prevention initiatives, Orsi figured she was a good candidate for the Home Affordable Modification Program, or HAMP.
She said she called Bank of America and was told - wrongly, it turns out - she had to stop making payments before getting help.
Reluctantly, in May 2010, she didn't pay her mortgage - a tough decision for a woman who said she prided herself for doing things correctly when she bought the modest ranch in Pittsfield Township, Mich., in 2003.
Orsi, a hairstylist, said Bank of America told her she needed to make more money - and lose her debts. So she started a pet-sitting business and, by mid-2010, had paid off her debts, including her car.
Orsi said she spent roughly 20 hours a week sending records and trying to persuade the bank to modify her loan.
"I met every deadline. I never lost documents," she said.
At a December meeting, a bank representative said she qualified for HAMP.
But later that month, Bank of America denied her modification, telling her she made too much. Yet another letter said she didn't make enough.
Orsi said the rejections were based on incorrect numbers. The bank also wanted a quit-claim deed removing her ex-husband from the home. But he had left the country.
Orsi's attorney, Paul Sher of Legal Services of South Central Michigan, questioned the bank's demand for the deed because Orsi took title to the home during her divorce.
Bank of America spokeswoman Jumana Bauwens said the owner of the loan - Fannie Mae - was responsible for denying the modification.
Orsi sued Bank of America and Fannie Mae in March.
"I don't want people to feel sorry for me," she said. "I want them to be angry because the banks can deny you a modification, even if you qualify."
Sher has persuaded the bank to delay a foreclosure sale while she fights in court.
"If I lose the house, I won't have the 1.5 acres to do the pet-sitting," Orsi said. "I now feel that HAMP was a farce."
"And in following the bank's instructions, my excellent credit is now ruined."
After Sgt. Eric Spalding returned from Iraq with a traumatic brain injury and a Purple Heart, his brick ranch in Ypsilanti, Mich., was his cave, his only haven.
So when his lender, GMAC Mortgage, started foreclosure proceedings, Spalding wasn't going to let the company take the house.
"I didn't have anything else," said Spalding, a gunner who guarded convoys in Iraq for the Michigan National Guard and has a son, Eric. "Where am I going to live? Under a bridge?" he asked.
Like many borrowers seeking a loan modification, Spalding almost lost his home at sheriff's sale while seeking help with his mortgage payments.
He was wounded in 2007. His troubles began when he returned home and failed to pay his 2008 property taxes. His military pay had been cut in half, a job at General Dynamics was outsourced, and he said he didn't know he was eligible for disability until later.
GMAC paid the taxes for him to preserve its interest in the property, then rolled them into his mortgage, raising his payments from $1,100 to more than $2,300 a month.
That put him behind on his payments, said Moonson River Eninsche, a foreclosure prevention counselor with the Washtenaw County Treasurer's Office who intervened to help Spalding.
GMAC and Spalding don't agree on what happened next.
Eninsche said GMAC offered Spalding a three-month trial modification in April, with monthly payments of about $1,430.
According to Spalding, GMAC then offered him a permanent modification. He signed the papers and said he believed his monthly payments would remain $1,430. Yet the next month, he said, GMAC billed $2,300.
Eninsche said it appeared to him that GMAC was processing two conflicting applications at the same time.
According to GMAC spokesman Jim Olecki, Spalding did not qualify for the federal Home Affordable Modification Program, or HAMP, because he earned too much.
GMAC described several efforts to lower Spalding's loan payments under other programs. In each case, Spalding stopped payment or failed to write a check, forcing GMAC to cancel the deals, Olecki said.
In October, Eninsche said, GMAC hired a lawyer and began plans to sell the home at auction.
After repeated calls to GMAC, Eninsche said, GMAC called off the sheriff's sale and in November agreed to a permanent modification that lowered Spalding's monthly payment to around $1,450, including taxes and insurance.
Deb Odom Stern, an Ann Arbor Realtor who also helped Spalding, said she made sure GMAC knew it was dealing with disabled veteran.
Spalding said the experience has resulted in the "total dismantling of my life and credit."
He said he traded one of the most dangerous jobs in Iraq for a yearlong fight with GMAC.
It was a fight worth fighting, he said.
He is home for good.
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