Later, the lender told her the tiny error wasn't actually the issue, that her low income disqualified her from the program. She called the bank trying to get to the bottom of it all, but she got no answers and feared there was nothing to head off foreclosure, which had been scheduled for today.
After an inquiry by The Associated Press, the bank, America's Servicing Co., a division of Wells Fargo & Co., finally returned her call this week to apologize for the 7-cent error and say the foreclosure sale had been put on hold for now.
Though her story is striking, Gooch is far from alone in her problems with the Obama administration's loan modification program, which provides federal subsidies to encourage lenders to renegotiate rather than foreclose on certain borrowers. Seven months in, many qualified applicants are being rejected, often through bank errors, with no avenue of appeal. Until this month, lenders didn't even have to tell them why.
"If the servicer messes up, even by accident, there is no meaningful way to complain, no real appeals process, no viable ombudsman to consider," said Kevin Stein, associate director of the California Reinvestment Coalition in San Francisco. "Most importantly, there are no consequences to the banks for failure to do what they have promised to do."
Gooch, who lost her job as a recruiter earlier this year, said she had been thrilled last month when the bank notified her that her monthly payment would be cut in half, to $938. Gooch agreed to the payment and even logged on to the White House Web site to post a public comment personally thanking President Barack Obama.
"I was so confident in this that I didn't make a plan B or C," she said from her town home in Upper Marlboro, Md.
(2 of 3)Washington Report: Preserving Homes and Communities Act$650,000 in grants to help fund affordable housing in Middle TN
