In 1999 I received an unsolicited offer for a mortgage in the amount of $80,000. I contacted the company and they quoted 7.5% interest. I was 100% disabled receiving VA compensation. They required me to submit my disability status and incom verification.
Once they received it, they required my spouse to quit claim the property as a pre-requisite to the loan. Once she was removed, they closed in my house without my spouse present.
They contracted a local Appraiser who appraised the home at $152,000/133,000 FMV. I was granted the loan at 9.5% @ $80,000. Four months after closing, a NEW appraisal was done and the new appraised value was $10,250.
Home Mortgage immediately sold the mortgage to GE Capital Services which upon inquiry to receive the loan documents inclusive of appraisal, informed me that it could not be located. GE Capital Services surrendered its license to lend within six months of receiving the loan.
They sold the mortgage to Wells Fargo, who was also contacted and requested to send copies of the appraisal and loan documents, of which they could not locate, and they too sold the note to Key Home Equity rather than produce the documents.
Key Home Equity DID send me copies of the loan documents and appraisal after three years of servicing the account. The appraisal was a high of $152,000 w/FMV as $133,000. HOWEVER! While the address was correct, the house appraised did not reflect either the condition of my house or the type of house the mortgage was established for.
I tried to refinance with Key Home Equity and was told that there was "no loan to value." I tried to refinance with Wells Fargo and was told "no loan to value." I tried to refinance with GE Capital and was told they no longer loan in the state of Missouri. I requested to negotiate a Deed-in-lieu with Key Home Equity, they were interested however I couldn't even locate a real estate agency that would even consider listing it even at 30% of current mortgage level. When Key Home Equity was notified that I was considering bankruptcy, they sold the mortgage to Select Portfolio Servicing, Inc.
The current market value of the property is set as $16,200. The current appraised value of the house is $16,200. Houses of similar size and condition are being sold within a radius of 1/2 mile for $10,000 - $16,000.
In March I had a credit score of 720 (according to my Credit Union) and of which I would qualify for a refinance at 3.78% [if] the house had been properly appraised. After negotiating for more than a year, I finally filed for Chapter 7 Bankruptcy, pro se. I offered to surrender the property in the bankruptcy.
Since Filing, I have received notices of foreclosure and demand letter-notice of default. Had there been a proper appraisal, I would not have been placed in this situation. A situation in which I have a mortgage outlay that exceeds the value of the property by eight (8) times its value, and at an interest rate that cannot be negotiated down.
Final note: My spouse (now separated) wants to keep the house but cannot gain financing for it. She proposed a settlement at 150% of current appraised value to clear [all] liens, but cannot find a lender to finance her because "no-loan to value" even at $24,300.
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