Woman Loses Home While in Talks on Loan Changes

Post by Ken Grech, a top Simi Valley real estate agent. Search Simi Valley real estate listings. Boston Herald, By Thomas Grillo and Jerry Kroneneberg

Roberta Frugoli thought she had a deal to modify her mortgage and avoid foreclosure, but the Carver woman claims Wells Fargo auctioned off her home anyway.
 
Frugoli is one of four Massachusetts homeowners suing Wells Fargo or Bank of America over lenders' alleged failure to comply with the federal Home Affordable Modification Program. Under HAMP, most banks have agreed to "modify" financially strapped consumers' mortgages instead of foreclosing.
 
Lenders will cut qualified customers' mortgage bills to no more than 31 percent of income, typically tacking the difference onto the end of a 30-year loan. However, only about 12 percent of applicants have actually gotten permanent help. Frugoli, who owns a cleaning company, thought she worked out a pact to reduce her mortgage bill by $1,000 to $1,400 a month.
 
But even though lawyer Josef Culik says he submitted all paperwork, Wells Fargo reclaimed title to the woman's home last month via a foreclosure auction. "Something went terribly wrong," said Culik, who plans to sue the bank today to block his client's eviction. "When someone is being evaluated for (HAMP), foreclosure activity is supposed to be suspended."
 
Boston lawyer Gary Klein filed a separate lawsuit yesterday against Wells Fargo on behalf of two other Hub homeowners. Klein, who also sued Bank of America on behalf of a Salem homeowner, claims the lenders gave his clients three-month "trial" modifications, but failed to make changes permanent.
 
Wells Fargo said that, while it's still reviewing the plaintiffs' cases, "when we find mistakes are inadvertently made, we work to fix them as quickly as possible." The bank added that not all people who get trial modifications qualify for permanent help.
 
Frugoli, who bought her home in 1996 for $165,000 but later did some "cash-out" refinancings, got into money trouble following a divorce. Later, surgery for an injured back left her out of work for months. Frugoli says she stopped paying her loan so she could afford $1,350-a-month health insurance. Now, Frugoli just wants Wells Fargo to OK her $1,400-a-month modification.