Sorting out the mortgage after the sinkhole disaster

by Michael Mosher on August 8, 2013

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Buddy Wicker moved into his home in 1974. He raised his children, grandchildren and then some of his great-grandchildren.

A sinkhole destroyed that home on February 28 — killing a family friend — but Wicker still hasn’t been able to move on.

“This is reality,” Buddy said, looking at his lot. “It’s gone, there’s nothing here but flat land.”

He got a letter from his mortgage company this week, telling him he needs to pay up before they’ll close his account.

When the county tore down his house, Wicker owed about $135,000 on his mortgage. He refinanced about eight years ago.

For the loss of his home, Wicker got $130,000 from his insurance company. He immediately sent the check to his the mortgage company.

But the company won’t take it as a payoff. In the letter, they told Wicker, they want $4,500 more.

We are not naming Wicker’s mortgage company because Buddy Wicker asked us not to. He is still hoping they reconsider.

But he did tell us on Friday, he got a call from the bank. They asked for a payment.

Charles Gallagher, a St. Petersburg attorney specializing in real estate and foreclosures, says he’s not surprised.

“At the end of the day, the bank is in the best position of all of the parties. So really, the bank is going to defer and ask the homeowner to take the hit even though they have the ability to say we’ll accept this as full payment.”

He says writing off the $4,455.84 would be easy for the mortgage company to do.

“Banks are writing off five times that, writing that off on a daily basis. On modifying mortgages and trying to accommodate homeowners and foreclosures. It’s not like you’re going to break the banking industry off of one loan.”

Gallagher says the loan Buddy Wicker got back in 2005 when he refinanced is the kind that triggered the financial crisis in 2008.

“I don’t think that loan would exist under today’s terms. I think you’d have a banker that would be a little more careful to not write that kind of loan,” Gallagher said.

Gallagher hopes someone higher up in the mortgage company will Google the story or take a minute to listen to Buddy Wicker.

“Hopefully someone on the local end from the bank, a lender, servicer, might be able to make an inspection and truly appreciate how bad things really are, and reconsider their position.”

Full article…here

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