SALT LAKE CITY (ABC 4 News) – Are you one of the millions of Americans who’ve watched the banks and the automakers take billions of dollars in government money and wondered: “Where’s MY bailout?!?”
A Park City family may have found an answer.
ABC 4 News viewers and ABC4.com visitors may recognize the Weldon family. More than a month ago, Clay and Julie agreed to be a part of an ambitious project. ABC 4 committed to work with the Weldons, recruiting as many people in the community as we could to help them end their layoff-forced unemployment, get out of the bad mortgage loan they could no longer afford and save the home they’d bought years ago and where they’d planned on raising their four children.
After weeks of blood, sweat, tears and work Clay is reemployed as Marketing and Sales Director for a park City company called Slant Media Group. Owner and Founder Glenn Cogan watched the profile this reporter aired on ABC 4 News and decided immediately Clay was the right man for the job.
“I saw the attention to detail in his approach to his job search – customizing every resume’ to fit each prospective employer and meticulous follow-up with every one of them – and I decided this is the guy we need to create the image and help set the direction of this new company,” he raved. The day after our story on Weldon’s job search aired, Cogan found him and called him. The day after that, Cogan offered him the job.
“After all that waiting and working and wondering,” said Weldon -- referring to his 5 month-long job search ordeal, after having been suddenly and unceremoniously cut out of the roster by a company called Fiskars, the scissors maker out of Madison, Wisconsin -- “it (reemployment) happened so fast it was hard to believe.”
Having won the first half of the battle, the Weldons are now loading their weapons to stage one more fight - to convince their mortgage lender, Wells Fargo, doing business as American Servicing Company, to modify the adjustable rate loan they sold the Weldons at the height of the sub-prime lending craze. The loan, which now carries a ballooned interest rate of 10.5%, has inflated the Weldons’ monthly mortgage payment to nearly $5,000. Having drained their savings to preserve their perfect payment history, the Weldons were desperate. After being told numerous times by several customer service representatives – a term used very loosely in this report – the bank wouldn’t even talk to them about a loan modification until they were at least two months behind on their payments, the Weldons opted, for the first time in their lives, to withhold the March payment.
All the while, unbeknownst to this family on the brink, the government has been cobbling together an emergency program to assist millions of Americans just like them.
“If lenders and homebuyers work together and the lender agrees to offer rates that the borrower can afford, we’ll make up the gap between what the old payments were and what the new payments will be.”
That was President Obama’s declaration during a speech on February 19 in Mesa, Arizona. For the first time, beleaguered homeowners had a glimmer of hope – a government sponsored program that mandates banks to work with customers who can no longer afford to pay back the loans they took to buy their homes. The President outlined the criteria:
Families whose incomes had diminished or dried up because of the economic recession would qualify. Families whose mortgage loans had increased because their banks had adjusted their rates would qualify. In short, families who couldn’t get their banks to listen now had someone speaking for them – the United States Treasury Department, on orders from the President of the United States.
Three and a half months later, the applause has died, seemingly forgotten.
"Frankly, it seemed too good to be true,” said Mike Barnes. This Park City home builder and real estate developer has made it his quest to learn about the government’s new program and to help as many of his desperate neighbors – and there are plenty of them – to take advantage of it.
“I became obsessed with it,” he said, explaining why he has set aside his work and devoted most of his time and energy to spreading the word about what is called the “Making Home Affordable” program. “I decided to go back and study it.”
Ask Barnes any question about “Making Home Affordable” and he’ll answer without blinking an eye. It’s fairly clear; this guy knows this stuff backward and forward.
“I’ve lived in this town and loved it,” Barnes said, gong on about why he’s on his crusade, “and I’m glad to be able to help people understand the program and get them involved.”
He’s teaching it to his newest student, a skeptical Clay Weldon.
“We’re ridiculously skeptical,” said Clay, referring to him and his wife Julie. “We’ve been working for about a year to get our bank to help us with a loan modification program and so it’s just too good to be true.”
Barnes is undeterred and unflappable. For him, the proof is in the program, and in the victories of eight Park City homeowners who’ve saved their homes by leveraging the “Making Home Affordable” loan modification process. And Barnes says there are a couple dozen more on their way to doing the same thing.
“The key principle of this program,” Barnes explains with the zeal of a minister, “is that the government has set the threshold at 31%. No qualifying borrower will pay any more or any less than 31% of their gross monthly income. The government guarantees it.”
"You seem certain of that,” I observe.
“I am,” Barnes shoots back. “And as I say, they are a classic case of having this program apply to them,” he says, looking at Clay.
If it does, the Weldons will soon see their monthly mortgage payment drop from $4,900 per month to less than $1,700.
On paper, they appear to be the perfect candidates for the “Making Home Affordable” loan modification program. They meet all five of the criteria:
- The Weldons’ home is their primary residence.
- Their mortgage is less than $729,750.
- Loss of income or inflation of their mortgage (in the Weldons’ case, both) has created a hardship that makes it extremely difficult to make their mortgage payments.
- They bought their mortgage before January1, 2009. (Thus they're not late-comers who are trying to buy a distressed property use the government program to “flip” their mortgage to a lower payment.)
- The Weldons’ payment is more than 31% of their gross monthly income. (Even with Clay’s new job, their payment is a little more than 55% of his monthly income.)
Answering the criteria questions has proven easy for the Weldons, compared to breaking through the layers of bureaucratic defenses their bank has laid in front of them like a mine field. The couple have spent hours on the phone, mostly on hold, trying to get someone on the line who can instruct them on how to officially apply for their bank's version of the government’s “Making Home Affordable” Loan Modification Program. Most of the so-called customer service agents know little to nothing about the program. Many of them are newly hired functionaries who are either newly trained or not trained at all. None of them seems to know anything about the Treasury Department’s program, let alone how to help a customer navigate it. The Weldons are back to the mind numbing grind they found themselves in last year – trying to convince a non decision maker to make a decision and, at least, type their name and vital stats into a computerized file where a minimally-authorized supervisor can take it and record it in a file for qualified applicants.
What the Weldons, like millions of desperate American homeowners, are finding is that not even the President of the United States has the power to fix the nation’s banking system, rotted by decades of greed and corruption, buried under tons of bureaucracy, and nearly bankrupt by the economic spiral the banks themselves set into motion.
The Weldon family now finds itself on two brinks:
Failure and foreclosure on their home.
Hope they may finally be on the verge of rescue.
