When her 25-year-marriage ended in divorce and the family house was sold in June 2005, Ms. Avery, 47, came away with a few thousand dollars from the sale and began a search for a new place to live.
Unsettled debt incurred during the marriage and the onset of a debilitating illness that left her unable to work and collecting disability made her a credit risk, but she was somehow able to qualify for a mortgage with Chase and purchased a little old farmhouse in August 2005, where she now lives.
Though she wasn't sure she wanted to remain in the area, Ms. Avery said when she first entered the house she knew she was home. It "made me feel loved and nurtured."
Because the interest rate on the $111,000 mortgage loan was high, about 9.5%, she was advised by her mortgage broker not to have the lender automatically include a fee for her taxes and homeowner's insurance in her monthly payment. Instead, she was planning to put some money aside for those costs and pay them herself when they came due.
The strategy recommended by her broker was for her to pay 12 consecutive mortgage payments on time to repair her credit, then refinance at a lower rate and add the tax and insurance payments into the renegotiated payment.
The idea made sense, but when Ms. Avery and her youngest son, then a teenager, moved into the house, any spare money she had went into house repairs.
There were electrical problems--"You couldn't plug in a toaster and a blow dryer at the same time"--and "plumbing issues" and a malfunctioning furnace that had been in the house since 1943.
Though she was able to keep up with her $929 mortgage payments, when the taxes came due, she didn't have the money to pay them. So in 2006 Ms. Avery decided to refinance so she could get the money to pay her taxes and restructure her mortgage payments so the taxes and insurance were included.
The minute she started the process with a check of her credit, her phone started ringing day and night with calls from salespeople peddling loan services. "They offered me an easy way out of my dilemma. They hounded me. They were slick, they had the solution to my life's problems," she said.
It became a game: They'd call, she'd hang up. "I learned not to talk to them."
But the constant barrage wore her down, and one salesman seemed to know that. "He hounded me with his slick talk, saying he was concerned about my well being. He crossed the boundary in his communications with me. He asked me personal questions. I was vulnerable," she said.
She identifies the man as Anthony Reed, who worked for UVantage Home Lending Services, Inc., of Langhorne, Pennsylvania.
Ms. Avery describes UVantage as a "third party loan servicer," though she also calls him "a salesman getting a high commission for selling bad products."
They offered her an interest rate that was better than her credit rating would indicate, "but I ended up paying more in closing costs."
Ms. Avery put the brakes on one attempt to close a deal with UVantage, because the figures did not jibe with the terms she had previously agreed to. She says that only made Mr. Reed intensify the pressure on her to sign a mortgage refinancing agreement, questioning her angrily, demanding to know where she had been, asking her if she was serious and accusing her of taking too long to decide and asking too many questions.
Whatever Mr. Reed said, his tactics eventually paid off for him, because even though Ms. Avery felt "scared, bullied" and even mistrustful of him and UVantage, she faced another year of unpaid taxes and decided to sign when someone bearing the closing documents showed up unannounced at her house one evening in October 2006.
With the new $136,000 loan, her initial mortgage and her back taxes would be paid off, her current taxes would be included in the monthly payment and she would have $11,000 left over, although she had to pay about $9,000 of that in closing costs.
Her new loan payment of about $1,250/month to a firm called New Century was automatically deducted from her checking account. In January 2007 she was notified that New Century had gone bankrupt and her mortgage had been sold to a Texas firm called Avelo Mortgage.
In the coming months, Ms. Avery noticed that Avelo had taken a payment of $1,600 from her account instead of the regular $1,250. When she asked about it, she was informed that her taxes had doubled and the extra amount would be taken monthly to cover the amount the company would have to pay when taxes came due.
Her inquiries revealed that her taxes had not doubled, but her back taxes, which were supposed to have been paid at the closing of the refinanced loan, had not been. Now, that amount plus late fees were included in her mortgage payment.
Around the same time she lost a substantial part of her income when her son graduated from high school and moved out of her house.
Seeking help, Ms. Avery turned to Legal Aid of New York, the state Attorney General's Office, Assemblyman Marcus Molinaro's office and Housing Resources of Columbia County.
With the exception of the Attorney General's Office, whose senior banking examiner continues to monitor the situation and facilitates communications between the parties, no other help has been forthcoming, according to Ms. Avery.
Through her own efforts, she has been able to untangle and settle the matter of her unpaid taxes, but her dwindling income has left her unable to pay her total mortgage payment. So, she has continued to pay the principal and interest, which has caused her to rack up late payment fees, because the total payments have not been made.
Though her health is variable and she periodically experiences new symptoms for which her doctors cannot find a physical cause, she continues to contemplate finishing the courses necessary to earn her associate's degree and, she hopes, get a job.
Even though one of the main reasons she refinanced the loan was to have her taxes included in her payment, she has asked her loan servicer to discontinue that part of her payment as the terms of her mortgage allow. But she received notice in July that her loan is now being serviced by a new company--Litton Loan Servicing of Houston, Tex.--and that company has proposed spreading out the amount due on her escrow payments ($2,281.58) over two years so she can get caught up.
In the meantime, she asked a friend of hers to take a look at the mortgage to see if he could decipher some of the small print.
The friend asked her if she was aware of something called a "balloon addendum." The addendum states that in 40 years, when she is in her 80s, she will have to make one payment for the entire remaining balance, which will by then be $98,000. Asked how she could possibly still owe such a large sum after 40 years of payments, Ms. Avery said the most recent accounting of the loan revealed that only $34.66 of her monthly payment is being applied to the principal, $998.71 is interest and $484.20 is escrow. Her interest rate is currently 8.85% and due to adjust again November 2009. She has tried to refinance again but has been told her debt to income ratio will not permit it.
She is now considering trying to sell her home.
"I'm living on the edge. I'm in my home, but it doesn't feel like mine anymore."
To contact Diane Valden email dvalden@IndeNews.com.
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