First Horizon Home Loan ripoff Mistakes in their first billing statement forced us into default then into foreclosure Irving Texas

Our problems with First Horizon Home Loan Corp. originated from an incorrect billing statement from FHHLC dated 05/16/03, declaring a new due date for our first payment of 07/01/03, instead of 06/01/03. Also, on this same billing statement, the loan account was reported as having been opened on 05/02/03 (our closing date was actually April 30, 2003). We contacted FHHLC customer service, inquiring about this change, and were advised to make payment strictly in accordance with the billing statement (i.e. 07/01/03), as any extraordinary payments could not be handled by their computer system and would therefore end up being misplaced.

June 18, 2003 Received a letter dated June 6th from FHHLC, sent through regular mail, apologizing for mistakes in their accounting and stating that they had now corrected the application of funds.

June 27 A letter arrived from FHHLC, stating that we were seriously delinquent, and payment was due 06/01/03. After several attempts to call customer service through their automated system ("para Espagnol, oprimere los dos .."), we finally managed to speak to a lady who promised that somebody from FHHLC would be contacting us in the next few weeks to arrange a repayment plan and that in the meantime, we should pay as instructed in the first billing statement.

June 30 Received 2nd billing statement from FHHLC stating that we were delinquent with respect to a payment that was supposed to be due on June 1st. This same statement, however, showed a due date of 07/01/03 on the payment slip, while stating a due date of 06/01/03 at the top of the same page! We tried to contact them via email and by telephone without success.

August 4 A letter dated July 21st arrived from a certain Mr. Armand Brown at FHHLC's collection department, accusing us of avoiding their calls, and that they had no valid telephone number to contact us (a contradiction?). We tried calling their collection department immediately, without success, so we sent an email of complaint the next day.

August 6 Received a call from Mr. Rick Davis from the corporate office, presenting himself as the Branch Hotline Manager. He was very polite and understanding and promised to check through our file and work out a repayment proposal. We agreed that we should pay an extra amount on top of the monthly installments until we had caught up on the one outstanding installment. He acknowledged that he would also have been confused by the inconsistencies in our billing statements.

August 19 Our check for August '03 was still not cashed in by FHHLC. Discovered two days later that they had processed the check late.

September 11 Sent our check for the September installment. Still waiting to receive a written confirmation of the verbal agreement with Mr. Davis. The same day, we received a letter from FHHLC through certified mail, threatening foreclosure. We called customer service, where we were told that we could safely ignore the computer-generated letter, since we were already in negotiations with Mr. Davis.

September 22 Since FHHLC had still not cashed in our check for the September installment, we sent an email to Mr. Davis, requesting advice on whether or not we should call our bank to stop payment on this check.
Answer: Mr. Rick Davis had just returned from his vacations and promised he would check out what was going on, requesting us to wait until Tuesday for updates.

September 23 Our check for the September installment was sent back to us by FHHLC per regular mail, together with a letter stating that we were seriously delinquent and that FHHLC intended to start foreclosure proceedings, unless we paid the entire amount of $6,992.00. This amount was totally incorrect. Including the rejected check for September, we were only 2 instalments in arrears, so the correct amount was $4,660, not $6,992! We attempted to contact Mr. Davis urgently, both via email and per telephone and left a voice message. Mr. Davis never replied.

September 24 Sent a letter to FHHLC, to the Attn. Mr. Rick Davis, urgently requesting a solution to our problem. Still No reply.

September 25 Called Mr. Armand Brown, at FHHLC Collection Department, and after an initially arrogant attitude, he placed our call on hold to go and seek confirmation from Mr. Davis whether our statements regarding negotiations with him were true. After having spoken with Rick Davis, he returned and calmly declared he would accept a new check, sent directly to his attention (c/o Cashiering department). This check was cashed in by FHHLC on September 30.

October 9 Received a new billing statement from FHHLC, showing our next payment due date as November 1st, and nothing due for October! We tried to call Mr. Davis again to point out the evident new mistake. The operator told us that Mr. Davis was no longer employed in that office, so we were placed on hold with Customer Relations for 25 minutes, listening to jazz music, until we gave up.

October 21 Since nobody at FHHLC was responding to our attempts to contact them or appeared to have enough competence to handle our situation at all, we wrote an email directly to the CEO of FHHLC, Mr. Jerry Baker, requesting his prompt attention. No reply came from him either.

October 29 Sent another email to customer relations, urging a prompt response. No reply.

November 13 Sent a check for the November installment, accompanied by a letter requesting a response for the one missing payment. The same day, our check for the October installment was returned to us in the mail.

November 25 After having spoken with an official from HUD offices in Manchester, NH, to ask for advice, we sent a letter (per certified mail and via Fax) to Customer Relations, pointing out our intention to seek legal assistance, if we did not receive an appropriate response.

December 2 We received a call from Mr. Robert Goulet, of FHHLC. He proposed a Forbearance agreement to repay the now two (2) outstanding payments (i.e. with $3,500 @ end of December + 6 x $2,930 @ end of following months). To make up for the rejected check for November, we agreed with Mr. Goulet to make a Quick Collect Money Transfer through Western Union for $2,412.

December 15 FHHLC rejected our Money Transfer, with a letter stating that the amount was insufficient. We called FHHLC Collection Department, where we were firmly told that FHHLC could not accept any payments other than those referring to the Forbearance Agreement. We were ordered to remain strictly within the terms of the Forbearance. Mr. Robert Goulet was on vacation and would not be back until after Christmas.

December 31 We paid the $3,500 as required by the Forbearance Agreement (through check by telephone). A few days later, we received a letter of thanks, stating that FHHLC had received and accepted our payment.

January 25, 2004 FHHLC sent a letter announcing the initiation of foreclosure proceedings. All further negotiations were to be addressed to Harmon Law Offices, in Newton, MA. We called FHHLC collection department, but the automatic telephone system continuously redirected our calls to the foreclosure department. Here, a certain Rachel declared that FHHLC did not receive our payment, so they were now accelerating the loan and starting foreclosure. When we explained that our bank statement clearly showed the contrary, she ignored our declaration, saying we needed to check why our bank didn't honor our check. She hung up rudely, without even saying goodbye. I tried calling again instantly, but there was only an answering machine, requesting us to leave a message.

February 2, 2004 We appointed an Attorney to represent our case against FHHLC. A bank check for Harmon Law Offices was handed to our Attorney, as deposit for our forbearance payments. This check was never claimed.

April 13, 2004 Received a letter from Attorney Allison West-Dalton of Harmon Law Offices, stating that after having examined the documentation we had provided (regarding the errors made on our account), FHHLC had agreed to cancel foreclosure proceedings and reinstate our loan, waiving all legal fees and late charges. Attempts were made to refinance the loan, though negotiations fell through, due to FHHLC's failure to remove the foreclosure remark from the Credit Report and their refusal to report a simple 30-day rolling late payment.

April 27, 2004 Established telephone contact with Ms Kristi Lorance, from FHHLC Loss Mitigation Department, who sent us a loss mitigation package to be completed and sent back. We decided to attempt this solution, in light of the possibly lower costs involved, instead of a refinance.

May 11, 2004 Sent the loss mitigation package back to FHHLC via Certified Mail, together with a letter of hardship, requesting approval for a Loan Modification, clearly indicated in FHHLC's brochure as one of their available options to retain home ownership.

June 1, 2004 Received a phone call from a Mr. (Jody?) Burns, of FHHLC Loss Mitigation department, who said he would be responsible for presenting our request to the Lender. When asked whether we would prefer a 29-year continuation plan, or a fresh start, 30-year plan, we chose the second option. Payment of the new loan would therefore start as of July 1st, 2004.

June 24 Received a phone call from Ms Kristi Lorance of FHHLC, claiming that Mr. Burns had been transferred to another position and that she was now in charge of my case. Ms Lorance requested information (from me..?!) regarding the progress made by Mr. Burns regarding our loss mitigation request. She stated that she would forward our request to the Lender in the next few days and get back to me immediately thereafter.

July 13 Received a letter in the post, dated July 6, stating that our loss mitigation request was denied, on the grounds that our income was not sufficient to qualify us for homeownership (75k/year is insufficient?). We replied via email, demanding explanations for denial.

July 29 Sent another email to Ms Lorance, requesting an update. No reply.

August 6 Sent yet another email to Ms Lorance, copied this time to the president of FHHLC, urging a prompt response, otherwise proceedings for filing Chapter 13 bankruptcy would be initiated. Received in reply an arrogant email from a Mr. Edward Hyne, stating that our loss mitigation proposal had been declined and that foreclosure proceedings would be continued, since there were no possible grounds for a 2-3 year repayment plan ( although we had explicitly requested a Loan Modification, not a repayment plan!).

August 12 Appointment with a Bankruptcy Attorney in Manchester, NH, to start procedures for filing Chapter 13. Our Attorney suggested we should make one final attempt to find a solution out of court, or search for another mortgage company to refinance the loan, before taking the ultimate and irreversible step of filing for court protection.

September 23 Received a letter from Attorney Allison West Dalton, specifying new reinstatement (i.e. $32,229.43) and/or payout ($305,303.55) amounts, due October 25th, 2004, otherwise foreclosure proceedings would resume.

September 29 Made one last attempt to negotiate, with a letter addressed to Attorney Allison West Dalton, asking whether FHHLC might consider using the increased equity of the property (deriving from a recent new appraisal) as security for a temporary extension of the loan, until funds from sale of our property in Germany arrive.

October 5 Spoke to Mr. Tim Gelata, Manager of Loss Mitigation at FHHLC, regarding our last proposal (tel. 1-800-364-7662, option 3, extension 17207). In this telephone conversation, Mr. Gelata arrogantly stated that the added equity of our property was considered absolutely irrelevant, and that FHHLC's decision to maybe reinstate the loan and not proceed with foreclosure would depend entirely on the cash amount presented (at least $25,000) for negotiations by October 25th, 2004.

December 6 Received foreclosure letter and notice of sale, scheduled for December 30, 2004, at 11 am.

December 8 Appointment with our Bankruptcy Attorney to file a joint Chapter 13 Bankruptcy petition, to stop the foreclosure process.

December 29 Petition for Chapter 13 Bankruptcy filed at the Bankruptcy Court in Manchester, NH.

January 16, 2005 A deed search on the internet reveals the fact that FHHLC has assigned our mortgage loan to Federal National Mortgage Association, in Philadelphia, PA as of October 24th, 2004 (i.e. one day before their deadline for reinstatement/payoff of the loan!). This is evidently another violation of RESPA, as this assignment was supposed to be communicated to us at least 15 days prior to the date of assignment. Up to the present date, we were (and officially still are) unaware of this assignment of our loan.

January 29, 2005 Received communication from FHHLC stating the new Post-Petition payments of $2,330.86, due as of January 1st, 2005. Our attorney, however, refered to us that FHHLC had refused to take any payments prior to the Creditors' Meeting in February.

February 8, 2005 Attended Section 341 Creditors' Meeting.

February 9, 2005 Instructed by our Attorney's secretary to make our first Post-Petition Mortgage Payment to FHHLC. Sent check immediately to the specified address.

March 14, 2005 Sent second check for post-petition mortgage payment to FHHLC.

April 13, 2005 Sent third check for post-petition payment to FHHLC.

May 12, 2005 Sent fourth check for post-petition payment to FHHLC.

May 19, 2005 Received a letter from Harmon Law Offices, stating that it was requesting Relief from the Automatic Stay, allegedly due to our failure to make post-petition mortgage payments. In reality, FHHLC's own accounting (online) shows receipt of all four payments, the latest of which has been unexplainably deposited into a suspense account, thereby not applied to our mortgage loan.

May 20, 2005 We supplied proof of our dispute of allegations to our attorney.

June 14, 2005 Hearing at Bankruptcy Court in Manchester for FHHLC's Motion for Relief, based on our alleged failure to make payments. At this hearing, FHHLC's attorney declares that post-petition payments were supposed to be $2,878/month, nearly $500 more than documented. Hearing adjourned to following month for FHHLC's lawyer's lack of information for this unexplainable increase.

July 18, 2005 Second hearing for FHHLC's Motion for Relief. The motion was withdrawn, due to errors in FHHLC's post-petition accounting and correspondence regarding new payments. We were forced to accept (though unwillingly) a stipulation to make up for FHHLC's deficit in our loan accounting. This stipulation required us to make a payment of $2,557, plus six payments of $2,978/month (ending January 2006).

September 9, 2005 Received a letter of intention to Dismiss our Chapter 13 petition, allegedly due to another deficiency just recently discovered by FHHLC in their accounting, referring to Escrow Shortages, amounting to another $4,000 approximately.

September 27, 2005 Presented Dispute of Motion to Dismiss to the court. Requested 60 days time to review FHHLC's accounting and dispute the increased Escrow shortages.

December 12, 2005 Due to our attorney's inability (or unwillingness ...) to determine whether FHHLC's allegations were true or false, he proceeded to revise our plan, providing increased amounts to cover the additional $4,000 shortage declared by FHHLC in their claim.

December 16, 2005 Revised Chapter 13 plan confirmed. (sigh of relief ...)

December 29, 2005 FHHLC presented an Affidavit of Non-compliance, referring to payments under the Stipulation. Also a new Motion for Relief of Automatic Stay was presented to the Court.

January 3, 2006 Presented a dispute to the affidavit and Motion for Relief. Motion was first granted, then annulled by the Court. A new hearing was scheduled for January 27, 2006.

January 17, 2006 Received new increased payment figures from FHHLC, declaring even higher Escrow Shortage amounts.

January 26, 2006 Decided to give up to FHHLC and let them have the f house that they had worked so hard to take away from us from day 1. Our decision was based on the realization that no matter how much extra money we would come up with to cover their alleged Escrow Shortages, they are bound to come up with other new shortage claims again and again, until the payments would become unsustainable for us. For this reason, we decided to move out and move on, but not without some form of revenge in mind.

January 27, 2006 The Bankruptcy Judge granted FHHLC their long awaited Motion for Relief of Automatic Stay.

January 31, 2006 We found a rental house, in another town 20 miles away, and stipulated a "lease to purchase" agreement with the owner.

February 13, 2006 Moved into new house. Major part of furniture and belongings transported to new location.

March 12, 2006 We received notice of foreclosure sale scheduled for April 7, 2006. Continued retrieval of remaining belongings and pieces of furniture.

April 2, 2006 Went to old house to pick up last remaining personal belongings and found that the locks had already been changed, without prior warning and/or request. We contacted local Police, requesting them to officially file a complaint for illegal break-in, as FHHLC forcefully took possession of our house before the auction date.

April 7, 2006 Date scheduled for Public Sale. According to a search on the Internet the following week, FHHLC bought the house themselves, due to lack of bidders. We hope this will mark the end of this part of the saga with FHHLC. We are seriously considering suing them for violation of our consumer rights, now that we are out of harm's way.

Maurizio
Lyndeborough, New Hampshire
U.S.A.