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St. Pete Beach condo owner offers cautionary loan modification tale

Lyn Feliciano Selditch, 71, bought this two-bedroom condo in St. Pete Beach in 2004 with her brother. After her brother died, she tried to sell it but found she would have had to let it go at a loss.

CHERIE DIEZ | Times

Lyn Feliciano Selditch, 71, bought this two-bedroom condo in St. Pete Beach in 2004 with her brother. After her brother died, she tried to sell it but found she would have had to let it go at a loss.

ST. PETE BEACH — Burdened by rising expenses, plummeting home value and illnesses, Lyn Feliciano Selditch is struggling financially.

Selditch, 71, tried selling her two-bedroom St. Pete Beach condominium, but real estate agents told her she would have to practically give it away. She put up a sign of her own. Nothing happened.

With all the talk about loan modifications, she decided to try for one. She hoped to lower her monthly mortgage payments. Her application was declined.

"We have determined that you are not at risk of default because you have not documented a financial hardship,'' a letter from Wells Fargo said.

The bank told Selditch there might be other avenues for help, but what happened next astonished her.

She got a notice increasing her monthly mortgage payment by almost $300. Her new payments would begin on Sept. 1, it said.

"Are they working against elderly, not-so-sharp people? I wonder how many have accepted and then got stuck with this higher payment?'' the feisty former union organizer asked.

Selditch is not alone in this economy. And though she describes herself as a private person, she decided to tell her story as a warning to others.

St. Petersburg attorney Charles R. Gallagher III, who is handling more than 300 foreclosure cases, said what happened to the St. Pete Beach woman is not unusual. Banks are in dire financial straits and are not hesitating to reset payments to maximize their cash flow, he said.

"Generally, under the terms of the mortgage, they are entitled to change the payment amount in regard to insurance and taxes," he said, "and the banks are reluctant to assist homeowners unless the assistance is in the bank's best interest."

Selditch was frightened at the prospect of having to make higher monthly payments and said she repeatedly called the bank about her concerns.

She did the right thing, said Vickee Adams, vice president of external communications for Wells Fargo Home Mortgage. "It's always heart-wrenching when we are working with customers who are concerned about meeting their financial obligations,'' she said.

Selditch said the proposed higher payments reflected the inclusion of her property taxes — about $1,500 a year — that she previously paid on her own, because it made more financial sense. She had told Wells Fargo employees that she wanted to keep it that way, she said.

Selditch, who suffers from spasmodic dysphonia, a neurological voice disorder that affects her speech, as well as acute asthma, allergies and diabetes, said her monthslong quest for financial peace of mind was one of frustration. The bank lost her paperwork and she fielded endless, useless phone calls, she said.

Getting a lower monthly mortgage payment would have helped her cope with rising expenses, she said. "I understand that I am very fortunate to have what I have, pensions and so forth,'' she said.

However, Selditch added, "My international union used to pay 100 percent of my prescriptions. Now they pay approximately 80 percent.''

• • •

She said she has stopped going to her specialists and rations her medications. She's had to give up her passion. "I'd like to have a couple of shekels left to go to the opera,'' she said.

A staunch supporter of President Barack Obama, Selditch wants to know why his administration's loan-modification program isn't working. "I feel that the banks are not wanting to give the loans out,'' she said.

"The rate of modification applications being decided, much less accepted, is low,'' Gallagher said.

Banks are merely going through the motions for public relations and government reporting, he said.

Recent government figures show that in Florida, where mortgage delinquency rates are among the highest, 47,029 homeowners have had their loans permanently modified since the program began last year. That's second behind California, which had 85,814 permanent modifications. According to the Department of Treasury, homeowners who got loan modifications in the Tampa Bay area benefited from a median payment reduction of $444 a month.

When Selditch complained about the new, higher monthly payments, Wells Fargo employees said not to worry and that they were working on a new loan. She worried. When she called again, she was told that she would get a letter stating that the higher payment had been canceled.

When the letter arrived, it explained that an escrow account for payment of her taxes had been established after she requested mortgage assistance. Now that her loan had been removed "from consideration for payment assistance options,'' she should make her payments as before, it said. She said she is cautiously optimistic that everything has been resolved.

Waveney Ann Moore can be reached at wmoore@sptimes.com or (727) 892-2283.

>> Fast facts

Loan modification tips

• Prepare a detailed hardship letter.

• Assemble financial documents, pay stubs, bills, expenses.

• Send documents by certified mail or fax. Keep copies.

• Get full names and identification of lender representatives.

• Find out whether the person you are speaking with is the actual lender or servicer.

• Respond immediately to calls and correspondence.

• Keep a log of calls made and received.

• Cultivate a friendly rapport with the lender's representative.

• Follow-up communications should be in writing.

• Be patient.

Source: Gallagher & Associates Law Firm, St. Petersburg

On the Web

For tips to avoid scams, go to makinghomeaffordable.gov.

St. Pete Beach condo owner offers cautionary loan modification tale 08/31/10 [Last modified: Tuesday, August 31, 2010 11:08am]
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