Loan Modifiction Case

Gail Spicer

Gail Spicer, a widowed homeowner living in rural Cambridge, New York, found herself headed down the path to foreclosure. Her husband passed away unexpectedly and she fell behind in her mortgage payments. Worried she was going to lose her home; Gail contacted the Legal Aid Society of Northeastern New York (LASNNY) for assistance.

Laura Dwyer was assigned to Gail’s case and was able work with the court to preserve Gail’s home. Laura explains, “Ms. Spicer came to us in need of help obtaining a loan modification to save her home from foreclosure.” Unfortunately as Laura and Gail worked to submit a loan modification application, another tragedy struck. Gail’s adult son, who lived with her and contributed financially, passed away. After the death, Gail’s granddaughter, who had been living with her father, bounced around from home to home, often missing school, and experiencing a lot of instability. Fortunately Gail was granted custody of her granddaughter and this made saving her home that much more important. But with inconsistent child support payment from the granddaughter’s mother and the loss of her son’s monetary assistance, Gail experienced extreme financial pressure.

Laura assessed the situation and soon a new plan was in the works. Laura says, “We were able to obtain an adjournment, work with Gail on her budget to make up for the lost income, and submit a new application.” Soon after, the new application was approved and the foreclosure was dismissed. Unfortunately, Gail’s story doesn’t end here. Shortly after the modification went into effect, the monthly payments increased significantly. Gail called her bank repeatedly, but was unable to receive an answer as to why this happened. But fortunately, LASNNY was able to assist again. Laura reached out to an escalation contact at the bank to inquire about the increase and learned there had been a paperwork error. Laura says, “We learned there had been a miscalculation in the escrow shortage arrears and the current escrow had also increased. We were able to work out an affordable repayment plan of the escrow without any late fees being incurred and preventing the bank from filing another foreclosure against her.”

Laura is a tireless advocate for her clients and is continuously looking for ways to help them. She says, “After we worked out the most recent payment plan, which is affordable, but just barely, I contacted the New York State Mortgage Assistance Program. NYS-MAP provides interest free loans with no monthly payment to eligible applicants to save their homes. I advised NYS-MAP of Gail’s situation and they suggested filing for a loan for the maximum amount of $40,000 and using it as a down payment towards a loan modification or restructuring.” If Gail is approved for the NYS-MAP loan, it could pay off the repayment amount in one lump sum, reduce her principal, and ultimately reduce her monthly mortgage payment even more. Laura has been in touch with the lender regarding another modification and, assuming Gail is approved for a NYS-MAP loan, they agreed to consider the proposal. As of press time Laura and Gail are waiting to hear back from NYS-MAP.

As for Gail, she can’t thank Legal Aid enough. She says, “Laura is an absolutely fantastic person. I know without a doubt that I wouldn’t have been able to keep my house without the help of Legal Aid.” Now that the threat of foreclosure is behind her and payments are lower, Gail can breathe a bit easier. And most importantly, she can provide a stable home for her granddaughter. Gail’s granddaughter has been living with her for an entire year and she says, “My granddaughter is now able attend school and live in the only home she has ever known.”