Back in 2006, my family had a dream. Our dream was to sell our house, buy a boat, and sail around the world. I started a blog about it, which you can read here: http://theexcellentadventure.com/ea/

We moved aboard the boat full time, and got the house ready to be put on the market. As my American readers are painfully aware, this is when the bottom started dropping out of the US real estate market, and my family watched in horror as our home lost $275,000 in value in under a year, the city the house was in wobbled around declaring bankruptcy, and my husband’s home construction business collapsed. Suddenly, we were supporting a mortgage, a boat payment, and five people on one salary. We held it together financially, but as the American Economic Death-Wobble increased, I was laid off from my Technical Editor job at Sun Microsystems, with 5,999 of my friends, and the whole thing was no longer do-able.

Throughout this debacle, we kept making payments on the boat, s/v Excellent Adventure, as she was our home, our primary residence. We had attempted to do a loan modification with Bank of America, the loan holder, early on in the cycle, because continuity and commitment in our dealings with them seemed important. Because it was a boat, and not an on-land home, they refused, although they were quite good about tolerating missed payments, and even set up a three-month deferral for us at one point.

We declared bankruptcy in February 2009.

In order to keep creditors from potentially demanding a sale of our home, we reaffirmed the debt, and again requested loan modification. We included a survey and a letter from a local boat broker, verifying that in the current economic climate, with people walking away from boats, that our boat in its current state of repair (because what fiberglass boat from 1991 doesn’t need some serious work by now?) wouldn’t be sellable.

I contacted B of A in February, to see what was going on with the loan modification. I spoke to Customer Service, who told me that my file had to process their bankruptcy department, and that they couldn’t even see my account until bankruptcy was done with it. I asked when that would happen, and what the status of my loan modification was. I was told to hold tight, and wait for them to contact me with new payment information.

I never heard back from them.

In May, thoroughly worried, I called Customer Service. I was told that my file was still in Bankruptcy, they had not even begun to look at loan modification, and I should hold tight. At that time, I went ahead and gave them a payment of ~$4400, over the phone, to make sure that everything was current, even by the old payment amount unmodified. She accepted my payment, and assured me again that I’d hear from B of A soon.

Friday, September 11, at 12:38 in the afternoon, I received a call from April at Collections, informing me that my account was 107 days overdue, that my home was going to be repossessed, and that the Marina had put a lien on my boat for nonpayment of slip fee. This was the first contact I’d had from B of A since May. No letters, no phone calls, no bill, nothing.

April demanded full payment of ~$5500 immediately, to avoid repossession. I explained that B of A was supposed to be exploring loan modification, and that I’d go ahead and give her half right now over the phone in good faith to call off the repo, and reopen renegotiations on my loan.

She would not take a payment over the phone. I was required to go to my bank, withdraw the full amount in cash (NOT cashiers check or money order, cash), drive to a Bank of America branch, have the Branch Manager contact Collections, and verify receipt of funds.

I told her that I’d have to make sure I had enough funds, and that I could, again, give her two months immediately, which would bring me only a few months overdue. This was, suddenly, unacceptable, so I said I’d see what my options were and contact my attorney. The more I tried to ask questions, the angrier and more absolute April got.

I called my attorney, and left voicemail at each of his offices and on his home phone.

At this point, things got weird. Over a few conversations over the next few hours, first they knew about the bankruptcy, then they had no record of it. First, it was the reason they hadn’t sent me any bills, then, it was me lying. When I offered to fax a copy of the bankruptcy to them, so they’d know that I had certain protection under the law from this threatened repo, April transferred me, without asking or saying she was doing it, to her supervisor, Brian. This, of course, after she’d said I had to deal with her and no one else.

Brian starts off screaming at me.

“I am tired of dealing with people like you.” he yelled. “Do you have a bankruptcy file or not?”

“Of course I do. Here it is” and I gave him the number.

“You have until Monday morning, nine AM your time, to give me my money, or get your shit off my boat. I’m coming to get my boat.”

“You realize this is my home, right? There are children on this boat.”

“I don’t give a shit! Give me my money by Monday or I’m coming to get my boat.”

I tried to ask a few questions, like, how come they felt they could repo with zero prior contact or request for payment, and if payment was so important, why would they not accept partial now and partial Monday when I had it, but was greeted with more screaming. Oh, and this.

“Have a good weekend, Mrs. Hudson.”

I hung up, thoroughly upset. I had never been screamed at like that in my life. In the space of five hours, Bank of America had gone from “don’t call us, you’re in process, we can’t help you” to “we’re repossessing your home.”

I’d also like to point out that 12:30 P.M. on Friday, September 11^th is not the best time to reach people here in the US, because of the memorials and events that go on to mark the anniversary of the World Trade Center attacks. It also meant that I was going to have to spend the weekend stewing on it, with no ability to act, other than to pack belongings should repo show up anyway, and try to prepare to defend my home as best I could.

My friend Angela alerted me to a Bank of America customer service rep on Twitter. I DM’d him immediately. Sadly, “this is a new one” on him. “I’m somewhat limited when it comes to loans, but I’ll see what I can do to help…” To date, I haven’t heard back from him or from Customer Service through him. Certainly, not fast enough to do anything about the threatened repo.

Gerard, my attorney, didn’t return my call that day. As it turns out, he was at the California State Bar Association conference, and as soon as his admin got him the message, he phoned me Saturday night at 9:00 PM.

“OhmygoshLaureenareyouOK?” he shouted into the phone.

We talk, and agree that the best course of action is to give them their money on Monday morning, and pursue legal action once the threat is removed.

Monday Morning

Monday morning, I got up at 6 and started calling Customer Service. They can’t help me. They have no access to my files. They have no idea why I haven’t heard anything from Bank of America before the repossession threat. After half an hour of this complete stonewall, I get a supervisor on the phone, who apologizes, but tells me that I have to deal directly with Collections.

Y’know. The people who were cussing at me and threatening me on Friday? Apparently, they are Loan Modification and Collections all in one. I inform her that I am really uncomfortable talking to them because of the abuse received on Friday, and she agrees to stay on the phone with me while I talk to them.

Eventually, I’m put on the line with Vladimir, who confirms that the cloak and dagger thing with the cash is absolutely required. When pressed, he confirms it is because a wire transfer takes 48 hours to process, but cash is immediate.

We confirm that he will call off the repo when funds are received, and that he will call me before proceeding no matter what.

I bring up the question of loan modification.

Startled, he replies “We don’t ever do loan modifications on bankruptcies.”

“How does that make sense? You received the package stating our case, and the bankruptcy should make it even clearer that the modification is necessary.”

“Well, you got your debt erased, so that should free up all kinds of cash for you, right?”

I was gobsmacked. “What part of “unemployed since January” did you miss?” I asked him.

“Well surely your husband works. Just make the full payments.”

I realized that I can’t explain that “bankrupt” sometimes means cash freed up, but only if it doesn’t come along with “unemployed in the worst job market in California since the Great Depression” to someone whose paycheck depends on not understanding it, so I gave up.

He confirms that as of July 8 they knew I bankrupted. On Aug 27 they reaffirmed the loan and dropped me straight into collections without contact.

Jason headed off to the banks, rather than to the part time retail job he managed to find, because of course this is more important than earning money, right?

Jason called me from the bank, having executed the transfer. I called Vladimir, to confirm that all was well. And he started joking with me. Asking if we really live on the boat. Joking that I don’t like his accent. Acting, for all the world, as if his department hadn’t just threatened my family with homelessness in a few short hours. I confirm the date the payments are due, and that they absolutely will not work with me in any way. Vladimir ends the call with a cheery “have a good day!” and that’s the end.

Sociopaths are the only people I’m aware of who can threaten you one minute, and then pretend to be your friend the next.

Incidentally? Customer service did not stay on the line with me as promised.

The Bottom Line

So here’s where we stand. Bank of America is unwilling to do a loan modification, despite having taken billions of dollars in TARP funding, which was supposed to go towards loan modifications. They would prefer to demand completely unrealistic payments and force repossession/eviction on a family than to adjust to the reality of the American economy, even temporarily. Forcing the eviction and repossession will give them an asset of negligible value, compared to the over-time benefit of the loan modification. They are happy to rely on bullying, scare tactics, and brutality, and seem to feel that they can crush people at will.

My family is going to be pushed to the wall to continue making full payments on this, while also paying the attorney to fight them into doing the right thing. If anything goes wrong, like Jason’s hours get cut or my unemployment is delayed, we’re right back to repossession, and homelessness while we figure out what to do next.

This is what’s wrong with the American economy, and why those of us who do have the resources with which to fight back must fight back in the name of the rest of us, who don’t.

Realizations

Now that the adrenaline is (mostly) out of my system, I’m left with some observations I’d like to share:

• Yes, I should have been pounding on them every single month to make sure they took my money, because you can’t trust an institution that big to handle something simple like the transfer of a file between two departments, and still keep sending bills, right? As a country, we’ve gotten to the point where we don’t trust big organizations to handle simple bookkeeping tasks. Yet, we still give them our money (both personal accounts, and TARP) as if we can trust them. Which is it?
• An institution the size of Bank of America was incapable/unwilling to tolerate a 48 hour float of funds. If that does not scare you, nothing will. Most of us accept that it will take time for funds to clear in transfer. Bank of America is no longer willing (able?) to tolerate that risk.
• Bank of America, as a corporation, does not care that their employee both threatened me, and cussed at me. Apparently, offering immediate payment on a bill that they dropped the ball on is still worthy of that kind of abuse, and there is no institutional accountability for it, other than an offhanded “I’m sorry about that” from customer service.
• Bank of America, as a corporation, was completely unwilling to accept responsibility for their part of the problem, which was the lack of handoff between departments. I am expected, as a loan holder, to absorb 100% of the fault, which includes a penalty of homelessness and seizure of all of my family’s belongings. I don’t recall that in the loan agreement I signed.
• The boat market is completely flooded with boats people have walked away from that are newer, larger, and in better shape, than this boat. I have documentation from a local broker that he couldn’t sell this boat on a bet. This boat is no longer even close to the “asset” it was when we purchased it, both in concrete and in economic terms. Jason’s in the middle of fixing a horrid case of deck rot (typical of balsa-core boats), so the entire aft starboard quarter deck is swiss cheese. It’s not currently seaworthy that way. You can find brand new, glossy, new-boat-smell boats on the block right now for peanuts. Auctioning this boat would be an exercise in clogging up the auction yard and dispossessing us, for no return.
• The thing about the lien on the boat from the marina? Complete fabrication.

The legalities here are complex, and competing. If I am a tenant, because I pay rent to the marina, then I have rights under California law, which is unequivocal about protecting people from eviction without due process. Because this is my primary residence, according to the IRS, then I am protected from eviction under other sets of laws. Under rules from the FTC I am protected from abusive contact. And I’m sure there’s probably stuff I’ve missed. Point being, in moving directly to repossess without notice, Bank of America is in violation of several laws, and in the way they addressed me, they’re in violation of several others.

It didn’t have to be like this. All they had to do was behave like people, call me up and ask for money before it became a crisis (as I’d asked them to do in May), and negotiate the loan as they agreed to do when they accepted TARP funds. It cost them more to threaten, bully, scare, and harass me, and to activate the repo people, than it would have to simply call me and ask for payment. Instead, they behaved like a corporation. So now there are lawyers involved, and rather than focusing on working, contributing to the economy, and raising my family, I am focusing on battling Bank of America, who not only seems to think that a financial contract entitles them to bully people, but also seems to think that little people have no recourse in the face of their monolithic corporation.

The fact here is that their corporation only exists because we let it. They are big because people put their money there, and let them use it, to pay the salaries of people like April and Brian, who spend their days crushing people for the good of the corporation that pays them. What would happen if everyone who has so much as a checking account with Bank of America pulled their account, gave the reason “because of how you treat people”, and moved their funds to a bank that doesn’t employ bullying tactics, a bank that is small, local, and human, like a local credit union, or even one of the lesser-known, still-stable banks?

Another fact that is not widely known at all is that in the State of California, as of October 12^th, it is a felony for an attorney to get payment up front to work on loan modification cases. I can see how, on the one hand, this is to protect people from the unscrupulous. But the net effect will be to prevent attorneys from taking loan modification cases. Banks are known to drag these things out as long as possible, thus making it financially untenable for attorneys, who have their own bills to pay, from taking on cases like mine. And Bank of America has proven that I, as a customer and individual, have no voice and no hope with them, without legal representation. This is backed up by their August 24^th decision to not only scrap arbitration as a means of settling dispute, but also to continue with their ban on customers joining class action lawsuits. This means, effectively, that if you don’t have access to arbitration attorneys and funding for those attorneys, you’re screwed. Against Bank of America, you stand alone. What are they hiding?

If I stop fighting, if you all stop fighting, then they have been rewarded for bullying.

Related posts:

1. Twitter Weekly Updates for 2010-08-29
2. A Close Call
3. Rotten Seamanship
4. Prepping for a Haulout
5. Kayak Maintenance

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