Homeowners say loan mods led them to foreclosure - FoxNews.com

Homeowners say loan mods led them to foreclosure - FoxNews.com: "the loan modification disputes are a legacy of the federal government's rush to stem the flow of foreclosures before it had adequate plans in place.

'These policymakers said, just go out and do this and don't let us worry about the details,' he said. 'These details are now what are coming to the fore in these modification cases.'

Laurie Maggiano, policy director at the Treasury Department's Homeownership Preservation Office, said banks were encouraged to offer trial modifications based on interviews with borrowers about their incomes and expenses while they sorted out the paperwork to qualify for permanently reduced payments."

"Casco said his monthly mortgage payments to Washington Mutual Inc. went up to $2,765 when he refinanced his home in 2006 to pay for a new a meat counter at his store in the industrial Los Angeles suburb of South Gate.

Chase was in the process of acquiring Washington Mutual in January 2009 when Casco said it sent a note telling him he qualified for a lower forbearance rate. The El Salvador native sent the tax returns and business documents the bank was requesting.

His payment was reduced to $1,250, where it remained for several months until Chase told him to apply for a trial loan modification.

Again, Casco said, he sent Chase the documentation they requested. His payment rose to $2,363 in June, then returned to the forbearance rate in October.

Casco said he continued paying what he was asked until August 2010, when Chase told his family that they were $50,000 behind on their payments and put them into foreclosure."