A fight for the hero's home: One loan-modification saga

AMBOY, Wash. – No one seems to have a definitive answer for her. She has heard a variety of excuses, and dealt with months of what she says are stall tactics. But the bottom line is, the wife of a slain local soldier is about to lose her home. And she's losing it to a company that took hundreds of millions of taxpayer dollars to help people just like her.

The day after the 9/11 attacks, Earl Werner joined the Oregon National Guard.

"He felt that was his duty to stand up for his country," said Casey Werner, Earl's widow.

Eight years later, during his third tour in Iraq, KATU's Anna Song made this report from the newsroom Aug. 28, 2009: "Two Oregon National Guard soldiers have been killed, and a third injured, in a roadside bombing in Iraq ... One of the fallen is 38-year-old Sergeant Earl Werner."

Earl's wife Casey was left to fend for herself and fight for the couple's Amboy-area home – on her $10-an-hour income.

"This is our home, you know," she said. "We built this house together .... We put in this fence together. We built this barn."

Casey knew she wouldn't be able to make mortgage payments. She now knows she'll have "to fight for my house."

It's a fight Casey did not expect when she heard how the federal government and banks were working together to save homes through "loan modification" programs. She thought: "There is something that they can do for me, or for the average person, that's just trying to get by and live their life in these hard times."

Casey was especially encouraged after she received a letter from "Select Portfolio Servicing" telling her she was approved for a modification. Her monthly payment of $1,736.29 would be reduced to $517.39.

"That would be amazing, because then I could keep my house and keep my head above water and live."   

However, after Casey made one payment, Select Portfolio said it made a mistake. Casey needed to provide pay stubs, tax returns and other documents: paperwork she had already given the company. 

"It's just like a continuous cycle of, you know, ridiculousness," she said.

Then she got a letter from Select Portfolio stating: "We regret that we are unable to qualify you for the Obama administration's home affordable modification program ... You did not pass the U.S. Treasury's net present value test."

Basically, the money Select Portfolio would get from selling Casey's home – after foreclosure – was more than it would get by modifying her loan.

It's the same type of excuses one Portland-area real estate attorney says he hears all the time. 

"It's not for real," said attorney Rich Vial. "Banks just aren't getting it done."

As many as a hundred loan modifications have come across Vial's desk. So far he says he hasn't seen a successful modification.

"Not one," Vial said, "and the stories I hear are all consistent. It's always, 'I just need one more piece of paper. I just need one more little fee paid.'"

What's worse is dozens of those homeowners also took another piece of advice from the banks.

"I've had folks on the other end say, 'Well those folks have to quit paying their mortgage,'" Vial said. "'They have to be in complete default before we can even talk to them.'"    

That's what happened to Casey, and now that she's missed payments the home she built with her war-hero husband is about to go on the foreclosure auction block.

"What they are doing is hurting people," Casey said. "...They're leaving people homeless."

Meanwhile, Select Portfolio already has received $782 million from U.S. taxpayers in President Obama's "Making Home Affordable Act." Those were incentives intended for the Utah loan servicing company to make modifications for people like Casey.

A spokesperson from Select Portfolio did not answer our requests for a response to the latest allegations in Casey Werner's case. Congressman Brian Baird's office now says it is looking into Casey's loan modification problems.