Kathleen Soto said the fight to save her home from foreclosurehas caused her stress and migraine headaches and has led to aprescription for anti-anxiety medication.
In 2006, Soto took out a $240,000 three-year fixed-rate mortgagefrom Eastern Financial Florida Credit Union for a home in Jupiter,Fla. Three years later, the home is in foreclosure and Sotorecently filed for bankruptcy. She is now embroiled in a disputewith the Miramar, Fla.-based cooperative to find out why at leastfive of her mortgage payments were misapplied, she said. Oversightsthat may have pushed her into foreclosure, Soto believes.
With her husband at the time, they were able to qualify for anothermortgage, which brought their total loans past the $500,000 mark,Soto said. Soto's annual salary was roughly $35,000 back then. Hermonthly payments on the $240,000 loan started out at $1,500 andwent up to roughly $1,800. She acknowledges now that her salary mayhave been too low to stand up to the monthly loan payments.
“Now, looking back, maybe I shouldn't have accepted it. Myex-husband co-signed it. I would not have qualified. Now, I'mupside down,” Soto explained.
Soto's home loan problems started after the divorce. She said shetook her ex-husband's name off the deed. While she continued tomake the payments, she acknowledged that they would sometimesarrive past the due date. In 2008, Soto arranged to have themortgage payments automatically deducted from her checking accounteach month. She said she didn't have a problem with the new paymentsystem until Eastern Financial started taking the payments out oforder with other transactions. As a result, she accumulatedoverdraft fees. Soto ended up having the payments deducted from hersavings account.
“It was a nightmare,” Soto recalled. “I fought them tooth and nail.The majority of the time they would put it back in.”
In March 2009, Soto remarried. She and her husband, an attorney,agreed to have the Eastern Financial mortgage payments withdrawnfrom a Wachovia bank account. Soto said the credit union withdrewmore money than it was supposed to. The first time she chalked itup to a just a mistake, Soto said. But when the same type oftransaction occurred again, she was livid.
“After we got our money back, we immediately cut off [thewithdrawals from the Wachovia account],” Soto said.
Soto provided Credit Union Times with a spreadsheet of her paymenthistory that showed several payments were not applied toward hermortgage balance. A Sept. 21 e-mail from J. Melodie Munar, anemployee at Eastern Financial, appears to back up Soto's case.Munar wrote, “I need someone to help her with her account becausethere are quite a few payments she has made, and I do not seeit…She wants to work with us on getting her file out of foreclosurestage.”
In the same e-mail exchange, Soto told Munar and another personidentified as Juli Sori that she had a question about where and howmuch of the $1,846.12 received on May 8, 2009, was applied. Theentire amount should have been applied to a February payment. Sotohad the same query on the whereabouts of a $2,000 cash paymentreceived on June 18, 2009, which should have been applied toMarch's payment and “any leftover amount should have been appliedto April.” According to the spreadsheet and Sept. 21 e-mail, Sotowent to Eastern Financial's Boca Mission Bay branch to make a$1,806 cash payment, but it was refused because her account had ahold on it. A staffer told her that she would have to pay threepayments minus a partial payment totaling $901 to keep her homefrom going into foreclosure. Soto said the money was applied to herJune payment.
“We are attempting, in good faith, to get our account 'caught up,'but how can we if Eastern refuses cash payments,” Soto wrote in theSept 21 e-mail to Munar and Sori.
In a Sept. 22 e-mail, Sori wrote to Soto, Munar and several otherEastern Financial employees asking for confirmation of the mortgagepayments and “is there anything we can do on the workout unit tohelp our members?” Soto said much of the confusion with themisapplied payments stemmed from several accounts shared by her andan ex-husband. The two had a mortgage together and Soto's ex had aseparate mortgage. Eastern Financial's collection department wasapparently incorrectly mixing payments between the two as well aswith equity line and truck loan accounts.
“As you well know, [Eastern] misposting of payments has improperlyput me into foreclosure, and the subsequent freezing of my mortgageaccount has made it impossible for me to make payments to bring theaccount current,” Soto wrote to Munar, Sori and several othercredit union employees in a Sept. 27 e-mail.
Munar sent Soto a loan modification package, which Soto confirmedshe received on Oct. 1. According to an Oct. 2 e-mail between Munarand Soto, the credit union requested a signed copy of IRS Form4506-T, which is a request for transcripts of tax returns, incomeverification and recent pay stubs. Soto asked if Eastern Financialneeded information from her and her ex-husband or her currenthusband. Her ex-husband's name had been removed the property deedon Feb. 23, 2007, through a quit-claim deed, Soto wrote.
It appears Munar answered Soto's questions but according to an Oct.6 e-mail, Soto wanted her “issues addressed by higher authority forthis is delaying my modification.” Munar provided her with the nameof a manager. By Oct. 7, Soto had not heard back from the manager.Her misapplied payments had also not been resolved, she wrote in ane-mail to the manager. Not knowing where to turn, that same day,Soto wrote to Robert Hayes, bureau chief of the Florida Bureau ofCredit Union Regulation with the state's Office of FinancialRegulation about her issues with Eastern Financial.
“As you can see by the e-mails below, I have fruitlessly attemptedto seek resolution. I have attached a spreadsheet, indicating mymisapplied payments,” Soto wrote to Hayes on Oct. 7.
Hayes promptly responded the same day with the following: “Ms.Soto, your e-mail is being forwarded to Mrs. Cindy Ray [an Officeof Financial Regulation staffer] to process as a complaint againstEastern Financial Florida Credit Union (A division of Space CoastCredit Union).” Hayes provided his direct extension to discuss howthe complaint process works. He ended his letter with “Mrs.Ray-please handle as a complaint against Space Coast.”
At press time, Soto said she received a letter from EasternFinancial stating that the credit union will conduct an audit ofher accounts to get to the bottom of the issue of the misappliedmortgage payments. Hayes confirmed receipt of Soto's complaint. Hisoffice sent a letter to Space Coast on Oct.9 about the matter andis waiting to hear back. When the audit is completed, his officewill respond accordingly. While there is no set time frame for thecredit union to respond because of the time it may take to gatherresearch, Hayes said his office will follow up if a reasonableamount of time has passed.
“The way we normally handle these complaints is we hear the side ofthe complainant and we send their complaint to the credit unionwith our cover letter,” Hayes said. “We've had situations in thepast where people were able to resolve the matter over thephone.”
In an Oct. 21 e-mail statement to Credit Union Times, Space CoastSenior Vice President of Marketing Meredith Gibson said, “It wouldbe inappropriate for the credit union to comment on a memberinteraction.” After soured commercial loan and bad investmentsdepleted its net worth, Eastern Financial was placed inconservatorship in April and taken over by Space Coast. In July thetroubled credit union merged into Space Coast and became a divisionof the Melbourne, Fla.-based credit union.
“In general, Space Coast Credit Union, the parent company forEastern Financial, has maintained a consistent focus on addressingthe financial pressures of members who are negatively impacted bycurrent economic conditions,” Gibson said.
The credit union has a team of four specialists “dedicated toworking with members who are experiencing financial difficultiesassociated with their credit union mortgage loans,” Gibson pointedout. To date, the credit union has processed modifications for over$80 million of mortgage balances, she added.
Soto said she hired Sherry Cooper, a Florida attorney to helprectify the situation with Eastern Financial. Cooper did notrespond to messages from Credit Union Times. Soto's ex-husband,Roger, also did not respond to messages.
The fight to keep her home has at times been a lonely one, Sotolamented.
“Physically, I'm drained. I get more migraines because of thestress. I'm on medicine for anxiety. It doesn't seem like there'san end in sight. If I do have to surrender the house-unless theycan reduce the principal…” Soto's voice trailed off. “I'm at mywits end.”
Soto said while she's frustrated with Eastern Financial, one of thecredit union's employees offered some hope that someone had empathyfor her situation.
“On a personal note, I would like to compliment Melodie Munar, whohas responded to e-mails and phone calls in a timely manner. Shehas provided as much customer service as she could provide (givenher limited authority) and has been quite helpful in directing meto authority figures in hopes of resolution.”
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