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Boston Globe: Promised relief, many instead deeper in debt

March 7, 2011- Davidson O. Calfee thought a temporary mortgage loan modification was the break he needed to keep his home. It allowed the Sandwich insurance agent to start saving $500 a month in 2009, when his income was down because of the recession.

But instead of being better off, Calfee is now on the edge of a financial abyss.

After CitiMortgage Inc. offered to temporarily lower his mortgage payment in July 2009, Calfee, 33, said, he was instructed by the company to send in documents verifying his income and other data so the change could be made permanent.

The process was supposed to take a few months, but it dragged on for a year. Calfee’s application was ultimately rejected on grounds he failed to submit the proper paperwork, which he disputes.

Overnight, Calfee was in serious trouble. The mortgage payment reverted to its original level, and he was on the hook for 12 months of deferred principal, interest, and fees — a sum that today tops $12,000.

In addition, CitiMortgage reported him to major credit bureaus. The company said that by paying less on his loan, Calfee was technically delinquent on his mortgage, something he found particularly infuriating since he always submitted the amount requested, on time.

“I’m facing all sorts of financial doom, including bankruptcy,’’ he said recently. “If we could put things back the way they were, maybe I would have had some options.’’

Nationwide, 740,240 homeowners have been turned away from the $75 billion federal Home Affordable Modification Program, which is facing mounting criticism from housing specialists and even government officials. Many homeowners are actually in worse financial condition simply because they took up an offer to seek mortgage relief. CitiMortgage officials would not comment on Calfee’s case but said the lender has consistently been a “top performer’’ when it comes to federally sponsored loan modifications.



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