Stone Mountain, Ga., resident Kimberly Smith couldn't believe her eyes when she saw how much she was saving on her mortgage under a loan modification with Bank of America. That's not to say that it was a generous amount: Her monthly payments went down by a grand total of $1.61.
"It has to be a Halloween joke," Smith told WXIA-TV in Atlanta. "They have got to be kidding.... I mean, they wasted more on postage and FedEx [sending the notification] than what I am getting as a reduction."
Smith was trying to reduce her mortgage's interest rate through the federal government's Making Home Affordable program, which determines reductions based on a fixed percentage of income. But while her modification was being processed, her income took a steep dive.
"My job was on the line, and I had to either take a pay cut or probably would not have a job," she said.
Bank of America told WXIA that Smith's drop in pay was factored into determining her reduction, which is why it ended up so low. But after Smith's story aired on the TV news, the bank said that it would look into a way to get Smith a more substantial reduction.
A little more than a week later, the bank came through. Smith's new loan modification dropped her interest rate from 7.87 percent to 4 percent –- a much heftier savings of $262 a month.
"I cried. I was excited," Smith told WXIA after the new modification came through. "I was just happy. It was a blessing because without you all, I would not be able to get what I have now."
While this story had a happy ending, there have been a number of others involving Georgia homeowners tangling with banks that haven't come to such an amicable end. Two cases in Atlanta were particularly heart-wrenching: In one, a woman lost her home after Bank of America foreclosed on the property, claiming that she wasn't paying her mortgage. But it turned out that another institution owned the woman's loan -- which she had been current on -- and because of a paperwork foul-up BofA falsely believed it should have been receiving her payments. And another homeowner nearly lost her home after county officials placed a lien on her property and sold it to recover the debt on a tax bill that wasn't even hers.
If you're looking for help getting a loan modification, find out how to qualify, and learn how a loan mod can help you avoid foreclosure and why you should be seeking help now. For more information on loan mods, visit AOL Real Estate's Refinance Mortgage Center, and check out the federal Making Home Affordable program and the Home Affordable Modification Program.
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