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Homeowners Struggling To Stop Foreclosure

By Libby Smith

LITTLETON, Colo (CBS4) - In 2015, there were 4,209 homes sold in foreclosures, that's down from the 25,054 sold in foreclosure in 2007. As a result of the recession, the government issued new rules to help homeowners keep their homes out of foreclosure, but some homeowners are still falling through the cracks.

"I loved it," said Theresa Davalos, about the home she owned in Littleton.

She, her husband and two children, lived in the three-bedroom house for 16 years. Then she lost her job, she lost her father suddenly, and she was in danger of losing her house.

"I wasn't able to fully pay it, of course," Davalos said of the mortgage payments.

(credit: CBS)

In January of 2014, Davalos got a letter from Bank of America offering a mortgage modification.

"I was ecstatic. It was such a relief," Davalos told CBS4.

She said she entered into an application maze that had her submitting and resubmitting her financial documents.

"It took until January, I believe, of 2015 for them to approve my modification," Davalos explained.

Davalos started making her trial period payments. She was assigned an account manager, but when she couldn't get a hold of her, she ended up talking to various different agents.

"So whenever I tried to call to get the information or whatever I needed I was always talking to someone different," Davalos said.

When Davalos made a mistake with her bank account, she said she tried to call and fix it, but she was dealing with someone who was unfamiliar with her account.

"I said, 'I'm calling to make my last trial payment for my modification,' and she said, 'Honey, I don't show you owe anything.' I said, 'Are you sure? Because I know I do. Because this is the last payment for my modification and I don't want to screw this up,'" she recounted.

(credit: CBS)

Davalos ended up missing that payment and was dropped from the modification program. She got a letter that her home was going into foreclosure.

"I got denied and I fought it and I fought it and I fought it," she said.

In a statement to CBS4, Bank of America said it can't comment on Ms. Davalos' account due to confidentiality. But that they fully reviewed her account history, which included several forbearance and modification reviews.

In 2014, the federal government issued new rules to streamline the mortgage modification process. Lenders are required to assign a single account manager, they're compelled to expedite the application process, and be responsive to customer questions.

In June, The Consumer Financial Protection Bureau released a survey of how mortgage companies are doing with the new rules. While the survey doesn't identify the mortgage service companies by name, it does indicate that some servicers have made significant improvements in the last several years through training and computer upgrades. It also shows a wide range of legal violations are still occurring that result in information going to homeowners that is late, incorrect, or deceptive.

"It took me three years … three years, and I finally had to throw my hands up," Davalos said.

Davalos said she feels beaten by the maze that is mortgage modification.

"I fought … with my soul … I fought with everything I had in me."

Libby Smith is a Special Projects Producer at CBS4. If you have a story you'd like to tell CBS4 about, call 303-863-TIPS (8477) or visit the News Tips section.

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