80 Cent 'Typo' Almost Cost Man Home

Didn't think you could lose your home over a mere 80 cents? Think again.

A simple typo -- accidentally entering "615.02" instead of "615.82" when paying off his mortgage via telephone -- almost cost Tom Mudie his home.

Granted, Mudie was paying off his second trial-mortgage payment after being approved for a mortgage modification program, The Tampa Tribune reports. As part of the program, Bank of America had lowered Mudie's monthly payment by nearly $200 and to protect his home from foreclosure, all Mudie had to do was make the new payments on time for three months.

But one simple error -- pressing "0" on a keypad instead of an "8," which amounted to an 80 cent error -- caused him to unknowingly violate his modification contract and consequently get booted from the program.

"I want to keep my home," Mudie told the Tribune. "And to lose it over 80 cents is crazy."

When Mudie realized his mistake, he reached out to a customer service representative who advised him to send the bank a check for the 80 cents, which would apparently rectify the problem. Mudie immediately sent the check alongside his next payment and hoped for the best.

But luck was not on his side. The next month, the check for 80 cents was sent back along with his last payment and a letter from Bank of America stating: "Your loan is not eligible for the Fannie Mae modification program because you did not make all the required trial period plan payments by the end of the trial period." A foreclosure of Mudie's home was set to go ahead, it explained.

Mudie's unfortunate predicament reflects a trend of simple mistakes leading to consequences that just "get out of hand," severely hurting homeowners in the short- and long-term, Fannie Mae spokesman Andrew Wilson told the Tribune.

Take for example, the case of Shantell Curtis who sold her Vernal, Utah, home in 2010. Or so she thought.

Due to a $1 "coding error" by her lender (Bank of America again) the title to Curtis' home had not been properly transferred to its new owners, making it appear as if Curtis still owned the home. The bank consequently initiated a foreclosure process on the home and reported Curtis to credit bureaus, effectively obliterating her credit score.

Though Bank of America later corrected all the codes on the loan, confirmed that it had been paid, and had all the necessary corrections sent to credit agencies, the inconvenience for homeowners -- among a number of other alleged "abuses" associated with this and other banks -- have aroused public fury.

Thankfully, like Curtis, Mudie's name was also cleared.

Bank spokeswoman Jumana Bauwens apologized to Mudie for the "glitch," admitting that "the bank made an error" when it booted him from the program.

"He's in the process of getting a permanent modification," Bauwens explained. "The paperwork is not finalized, but that 80-cent error is not going to create any additional issues for him."

Though Mudie is relieved to be able to keep his home, he told the Tribune that from now on, he'll be paying his mortgage by mail.

Also see:
103-Year-Old Who Faced Eviction Gets New Lease on Life

Delaying Foreclosure, Some Owners Stay Put for Years

Top 11 Stories of 2011
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80 Cent 'Typo' Almost Cost Man Home

Here are the 11 real estate stories that we judged as the most important of 2011.

Time magazine was onto something when it named "The Protester" as its "Person of the Year." While its editors might have mainly had the Arab Spring and the Occupy Wall Street movements in mind, an offshoot of the economic unrest in the U.S. has been increasing protest and resistance among those already pushed out of their dwellings as a result of the recession, or who find themselves drowning in the debt of their underwater homes.

Also see: When Renters Get Snared in Foreclosure's Web

Two of the markets hardest hit by the housing collapse, Las Vegas and Florida, stirred back to life. The not-so-great news: Much of the run on homes came from bottom-feeding investors --- many of them foreign -- looking for bargain dwellings that they could turn around and rent. Still, that's better than bulldozing them.

Also see: Viewpoint: Feeling Guilty About Buying a Foreclosure?

While record low interest rates didn't do much to spark homes sales, it did launch another run on mortgage refinancing, with refis making up about 80 percent of the mortgage applications in recent months.

Also see: Barbara Corcoran on Refi Do's and Don'ts

At year's start, the government backed mortgage giants Fannie Mae and Freddie Mac already had set a record for the largest bailout of the financial crisis, at $150 billion and counting. This month their two former CEOs (pictured)  became the highest profile individuals to be charged in connection with the economic meltdown. They and four others are accused of defrauding investors by understating the amount of high risk mortgages held by the lending companies. And just last week California's attorney general sued the Congressionally-mandated lending companies in connection with 12,000 foreclosed properties there. It was also the year when politicians from both sides of the aisle were calling for an end to Fannie Mae and Freddie Mac. A question for 2012, and maybe beyond: With about half of the entire U.S. mortgage market split between them, what's the alternative?

Also see: Will FHA Be the Go-To Source for High-Cost Mortgages?

Looking for a glimmer of good news in the housing market? The U.S. Census bureau reported this year that there was a 4 percent rise in the number of households that are renting. Maybe that's why the recent, modest uptick in homebuilding comes in good part from multifamily construction. So while that's good news for builders and some investors, it's maybe not so good news for the average household -- since it's believed that foreclosures and short sales are responsible for putting more people in rentals, while probably making others gun-shy about buying, even if they could qualify for a loan.

Also see: Farewell Fannie and Freddie, Hello Renter Nation

While this year saw a decline in the number of Americans living in their own homes, with many of them being forced out by short sales and foreclosures, still more might have been feeling stuck with what they had. The Census Bureau reported that U.S. mobility hasn't been this low since the late 1940s, when it first started following that trend. Along with a reality check on the dream of the owning one's own home, it challenges Americans' view of themselves as exploring new frontiers. In 1951, the percentage of Americans who moved reach its high of 21.2. In the most recent count, that's dropped to 11.5 percent.

Also see: Poll: Baby Boomers Willing But Unable to Move

At the end of one of its worst years ever -- and following one that was even worse -- the homebuilding industry saw reason to feel encouraged as the number of new homes and construction permits increased in October. While demand is still low and far under the amount that economists say is needed for a healthy market, homebuilders were expressing optimism. The housing-start statistics got their biggest boost from multifamily construction. Another sign that we're increasingly becoming a nation of renters.

See: Buying New Construction Homes, the Pros and Cons [Video]

Just when we thought interest rates on 30-year mortgages couldn't get any lower the fixed-rate dropped below 4 percent for the first time in a half a century. (That's when economists starting tracking this number.) What's more, the Fed announced this year that it planned to keep interest rates at record lows for the foreseeable future. Though that cheap money was intended to spur investment in housing, it didn't do much, with some speculating that it might even be keeping buyers on the sidelines with the expectation that there's no rush to purchase.

Also see: Are Low Mortgage Rates Killing the Housing Market?

Pick your program: HAMP, HARP, EHLP or 2MP, the Obama administration's efforts to rescue underwater homeowners all seemed to do too little and for many arrived too late. Some blamed government ineptitude while others put it on the reluctance or outright resistance of banks to participate. And it's not like Republicans offered much in the way of alternatives. As Americans headed into an important election year, the continuing housing crisis seemed to receive scant attention from either major party.

Also see: The Mortgage Fix That Can Save the Economy

Home prices and values sunk deeper in 2011 with a year-over-year price drop in the third quarter of 3.9 percent, according to the Case-Shiller Index, and were expected to be down 1.57 percent in the last quarter. They were down by for the year by 0.4 percent, as of September. Meanwhile, home values were expected to drop by 3 percent, or about $700 billion (though that's about a third less than they did last year). And if you think prices are already in the cellar, brace yourself for another drop in 2012, say a panel of experts surveyed by Zillow, who add that then or in early 2013 prices should really, truly hit bottom (they think). On average, home values have fallen about 24 percent in the past five years.

Also see: Housing Market 2011: Highest Peaks, Lowest Valleys

It's hard to overestimate the impact of the foreclosure crisis. There's its incalculable emotional and economic distress, along with its continuing drag on a recovery, which not only drives everyone's property values down but obstructs new construction. Then there are the tighter lending practices that banks have adopted in its wake, and the fast-and-loose processing of mortgage documents that spawned the robo-signing scandal. You can add to this witch's brew the nationwide investigation of the scandal, and the daunting prospect that, if and when there's a settlement, even more foreclosures are expected to come on the market.

Also see: Mortgage Lender Dispute? Try Consumer Bureau's New Hotline


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