Holy smoke. God bless you Wendy. Where is the end to all this?

Thanks for stepping forward, Wendy, and with Occupy, shining a light on the shameful behavior of the mortgage industry. Foreclosures and evictions negatively impact our whole community! Your courage is an inspiration.

Keep up the good work, Occupy Petaluma! Makes me even more proud to live here. You are doing good things!

I feel for the woman in the article, but where do we eventually draw the line when it involves someone's financial obligations, and their ability to meet them? Is this all leading to a new paradigm where once somebody buys a home, that no matter the circumstances, the bank is obligated to allow the homeowner to stay ? People don't realize that there are a significant amount of lending institutions still staying afloat because of TARP. This isn't going to end well.

Banks don't like to show "non-performing" loans on their books. . . . nor do they like to take a $400,000 loan and turn it into a $300,000 loan. . . . nor do they like to foreclose on a house that was worth $500,000 when they lent money on it only to find it is now worth $300,000. Those are pretty much their choices -- all bad for the balance sheet.

Given those unpleasant choices, I would argue that banks should strain to take the route that is the most humane. Renegotiate loans to let people reduce their payments.

Wendy Booth did not create the problem that she is in. She has far fewer choices than does her lender.

Bill,

While I wholeheartedly agree with what you're saying, especially the "humane" portion, eventually, as the market continues to decline, more and more homes will be worth LESS than what was paid. So, if my home goes underwater, even if I have the same job as when I purchased, shouldn't I be able to renegotiate my loan?Where does the line get drawn? It used to be, prior to WWII, a Home was a depreciating asset, yet folks still bought them. Isn't that what's going on today?

They don't call them banksters without reason.

Exact same situation in central valley. All the flippers and investors have let go of such prooperties, the only people hanging on are the working poor, trying to make payment at high interest rate that can't refi due to no equity and loan needed is more than property value, even after HARP's 125%! These hard working people paid 20% down on their dream home, now struggling with less working hours or unemployed, now banks and lenders and gov HARP can't and won't help them refinance to a lower rate!

serious on going problem with our nation

Agree with some of the sentiments expressed. If the homeowner can demonstrably afford a restructured loan, then it only makes sense to do it, yet the banks are loath to apply common sense, as not only in this humane, it minimizes the loss. That said, if the homeowner really can't afford it, perhaps it's not wise for either party to continue but I have seen precious little effort made by the banks to work with their customers. Over time the equity situation will resolve itself, so, to me, it's a case of making things affordable for now - perhaps even a clause in the agreement to review the loan every few years - if the housing and job sectors recover, then perhaps an adjustment upwards within the same spirit. But since when did common sense matter...

Good for you Wendy!
Suggest that you check out a couple of websites with a lot of information regarding the foreclosure mess that you and others may find helpful. First is a site called livinglies.wordpress.com that is run by an attorney by the name of Neil Garfield. There are usually between two and five new articles published daily on his site, and I found this article on Patch through a link in a story there.
There is another site run by an Arizonan by the name of John Stuart. Now Mr. Stuart’s positions on a lot of things are very different than mine, but he has a very good grasp of the laws regarding foreclosures and has spent a great deal of time researching the subject. He is the one who came up with the notion of using what’s known as “the notary complaint;” and then going after the “trustee” (when you receive the Notice of Default there will be a “substitution of trustee”). You file suit against the “trustee” for a Breach of Fiduciary Duty, because according to the law the “trustee” must be impartial in the matter. How is this possible when the “trustee” is appointed by the bank (or whomever is pretending to have the right to foreclose on your property)? Anyway the site is showmetheloan.net

I tried twice to refi my home under the federal Making Home Affordable program. The first time, they "lost" all my paperwork. The second time, I was told that since I did not carry any consumer debt I did not qualify. I asked the guy if I were to, say, buy a boat and rack up a couple of credit cards would I then qualify and he told me yes! Unbelievable.

Thanks Wendy for sharing your story. If anyone thinks this is limited to Citibank or to Petaluma, please read a story I posted almost a year ago regarding a Guerneville homeowner and Wells Fargo:
http://patch.com/A-dhC2
Almost identical scenario....

I love how many of you blame the banks but give a pass to those who lied to get a loan that could never be paid back! Fraud is fraud!

I purchased my investment property in 2006 for $2.5 million dollars. I tried to negotiate with my lender (CHASE) for a modification. I went round and round with the bank, submitting documents and CHASE denied me for a modification. I couldn’t understand why they wouldn’t modify my loan when it was clear that the economy ham-stringed my ability to service the debt. The only thing that CHASE could tell me was that the investor was the one who declined the modification. I asked who the investor was and they would not tell me. I began to look closer at my original loan and I saw on the Deed of Trust that MERS was listed as the Beneficiary. I decided to talk to an attorney. My attorney had an auditing company called Lighthouse Consulting Group review my documents for both a forensic analysis of my original loan documents as well as a Mortgage Securitization Audit. It turned out that my loan was securitized and in the pooling and servicing agreement, it said specifically that any loan modified would require a buy-back from the servicer. Then, I had the securitization audit show that my loan was never securitized properly and the note and deed were not even with the same party. My attorney drafted a complaint, outlining everything I have mentioned. As soon as the lender was served, they contacted my attorney and settled without going to court. The settlement I got was a principal balance reduction of $400,000; my interest rate was reduced to 4.5% fixed for 30 year

Borrowers should look at their loan documents for the interest disclosures and compare that to how the bank is calculating and appliying the payments. You may find out that what is disclosed and what is actually calculated are two different methods. This is a direct violation of federal truth in lending laws (Regulation Z). The threat of a lawsuit could help stall or elimate a foreclosure.

If you're a homeowner with an adjustable-rate mortgage (ARM), you may choose to lock into a fixed rate if you anticipate rates will be going up soon, thereby stabilizing your monthly payments. I have used 123 Refinance to compare refi rates.

(Florida Statute Title 39, 671.102, 671.207, 671.209, 673. 5011, 673.5021, 673.5031, 673.5051, and UCC 1.102, 1.207, 1.209, 3.5011, 3.5021, 3.5031, AND 3.5051)
You will be required to follow decisions handed down by: Florida 5th DCA 2004, Florida 4TH DCA 1989, and the Florida 1ST DCA 1998, Florida Supreme Court decision of Feb., 11, 2010.
Here in Florida we demand that they validate the debt according to the above laws.
Since they can't prove they ever loaned any real money, they back off. The foreclosure scams and frauds are killing us. You need to learn about the frauds and how they work against us. They are in treason against the American people.
THE RONBOT HUNTER
ALL RIGHTS RESERVED

At a minimum banks could refi homeowners without adjusting the balance! Encouraged by mortgage lenders, many are in loans with 3 or 5 year fixes that are adjusting up to increased payments that they can't afford. Most of them have great credit are paying their bills and had planned to refi to a fixed rate . Even if they put 20% down in 07 08, their houses will no longer appraise for what they purchased it for and the banks are refusing to lower the interest rate and keep the balance the same. This makes no sense accept to the investor who somehow gets a better return on his money if the homeowner short sales or is foreclosed on. The banks received money to help homeowners but they chose to use it for short term investments to make a profit since few restrictions were placed on how they spent it! It is unsettling.

Given the amazing "loans" (at virtually 0% interest) and bailout $Billions given to the banks by our US government in an effort to keep the banks from going underwater, it is breathtakingly astonishing that any bank holding loans from their customers would refuse to refinance loans at a lower interest rate and/or principle balance. Too many of these banks don't care about their customers, individually or collectively. They have been immune to prosecution for fraud, mismanagement, self-dealing and other crimes.
This story in Petaluma is heart-wrenchingly familiar to all too many people in our town, as well as across the nation.
Thank you Karina and Patch for getting this story out clearly and compassionately. Please let us know what happens with Wendy Booth and the other families in our town suffering similar fates.

You must accept partial blame for this. You purchased the home and agreed to repay the loan at 5% fixed rate. When you lost your job, you didn't have a big enough emergency fund to see you through until you found another. You had problems selling your home because you probably paid too much for it in the first place. I'ts not like the bank put you in a ARM that you didn't understand. Did you have a short sale offer that they refused? You have a historically low interest rate. What are you expecting? Forgivness of your principal balance? Don't think that I don't understand or that I am not sympathetic. Both my husband and I lost our jobs within 6 months of each other but we managed to keep our home because we bought less home than we could qualify for. You should not rely on the loan officer to tell you how much you should/ can borrow. You need to understand your financial situation and have a budget that allows you to save at least 15% of your income. Listen to Suze Orman. You need an 8 month emergency fund after you have your 20 percent down payment and closing costs before you become a homeowner.