The anxiety started last fall for A'Lisa Scott. That's when the phone at the construction business she runs with her husband stopped ringing. New projects dried up, and the couple was unable to make their monthly home loan payment.
Watching her bank account drain, Scott couldn't shake the feeling of impending doom. But that didn't stop the 51-year-old and her husband from fighting to keep their five-acre property, which has been in her husband's family for three generations.
Since last November, Scott pleaded her case to her mortgage servicer, Bank of America, with hopes of keeping the home out of foreclosure. Each time she called the bank, she spoke to a different representative. She was placed on hold. Her calls were transferred to several different departments. Each time she recited to yet another Bank of America employee all of the reasons why the couple should be allowed to modify their mortgage loan, or lower their monthly payment to a level that's sustainable in the short run. Each time she explained it simply didn't make any sense to kick her out of the home she's lived in for 17 years. The couple would make payments. They just needed time to regain their financial footing.
That fight, now going on 11 months, has been, and continues to be, the most difficult Scott has ever waged. She says it's taking a toll on her health; since last November she's lost close to 30 pounds. She no longer sleeps well and has a perpetual kink in her neck.
"It's stress," Scott says. "It's day-to-day living with not knowing whether or not you're going to be living in your house. Where are you going to go?"
Scott's husband, Dale Frey, received the property off Mullan Road as a family gift, and today it houses the couple, three cats, several chickens, a black lab named Zoey, and llamas that graze in the yard.
Scott says she and her husband refinanced their first mortgage and took out a home equity line in 2007. They used the money to modernize the historic residence and grow their construction business. Scott, who's always been resourceful, juggling several jobs at one time, says when they took out the loan, they never saw the bust coming.
"That's not why you work all your life," she says. "I will never see the very modest lifestyle that my husband and I had two years ago, ever. I have no health insurance anymore. I don't have any IRAs, nothing."
Millions of other Americans are in a situation similar to Scott and Frey's. Foreclosure filings nationally have soared above 300,000 for seven consecutive months, according to RealtyTrac, a national company that charts repossessed homes. The company reports that in September owners of 347,420 properties were subject to such filings, including default notices or warnings the home was slated to be seized or auctioned, marking a 3 percent increase over the previous month. Arizona, Florida and Nevada have been hit the hardest; during the last quarter in Nevada, RealtyTrac found one of every 29 homes received a foreclosure notice.
Missoula's real estate market doesn't reflect such a drastic drop, but it's certainly not immune to the issue of declining home values, bad debt and increasing bank repossessions. According to the Missoula Organization of Realtors, foreclosures in Missoula more than doubled between 2007 and 2009, jumping from 108 to 262.
As the flurry of foreclosures continues, mortgage servicers are having a hard time keeping up. In fact, employees of some of the nation's largest banks are coming forward asserting that institutions, ill equipped to handle the workload, are taking short cuts. Specifically, employees of JP Morgan Chase & Co., GMAC and Bank of America allege the institutions hired "robo-signers" who received little training and were charged with signing off on thousands of foreclosure documents monthly. The whistleblowers say they had neither the time nor the expertise to investigate the validity of the legal actions. In some cases, the former employees allege, foreclosure documents were falsified to cover for lost paperwork.
Those claims prompted GMAC and JP Morgan Chase & Co. in late September to announce that they were suspending foreclosure proceedings in 23 states, not including Montana.
Scott's lender, Bank of America, halted foreclosures in all 50 states.
When the allegations went public, a flurry of outrage ensued. U.S. Secretary of Housing and Urban Development Shaun Donovan said the mortgage servicer practices have been "shameful." The federal government started investigating allegations of criminal wrongdoing as attorneys general in 50 states also jointly look into the legality of servicer actions.
Montana Attorney General Steve Bullock says it's early on in his investigation and he has little to report. But the sheer size of the investigation, he says, indicates a significant level of concern.
"At times getting AGs all on the same page is like herding cats," he says. "Here's where all 50 of us have said we need to dig into this, and we need to find out what's going on. For most people, the most important asset you have is your home. And the notion that somebody could lose their home without state law being followed is real concerning."
Scott's servicer, Bank of America, resumed repossessing property in 23 states little more than two weeks after it initially halted the proceedings. The bank is reviewing its foreclosure procedures in 27 other states, including Montana, pending further review. Scott remains unsure about how her fight will end. But she is sure that, from her perspective, the mortgage industry's actions are inexcusable.
"Probably three million people in this country are going to lose their homes by the end of this year," she says. "Is there really a justification in that? What are they going to do with all of these homes?"
Since she started trying to negotiate with Bank of America last November, Scott has accumulated two three-ring binders full of form letters from the mortgage servicer along with meticulous notes taken during conversations with bank representatives located in cities all across the country. Each time she talks to a bank representative, Scott records their name and identification number, along with the time and date she called. She also notes the duration and gist of the conversation on yellow legal paper.