Couple blames fees in loss of home
Residents say dream of raising a family in their first home drowned in a flood of questionable mortgage charges
By Kirsti Marohn,
The picture frame on April and Dan Lange’s living room wall is curiously empty, its three gaping holes out of place amid a plush sofa draped with snoozing cats and gauzelike taupe curtains tied back to reveal a snow-covered yard.
The frame used to hold photos of the family celebrating the purchase of their home in Sauk Rapids. A matching frame on the other side of the window displays photos of the other major event in the family — the birth of their daughter, Madeline.
The photos of their former home have been removed. It’s too painful to look at what they lost. Empty is better.
Dan and April were new college graduates hoping to start a family when they started looking for a home.
It was a different era, when credit card companies set up tables on college campuses and hawked free gifts to students. April and Dan had racked up some debt but were determined to make changes. April took homeowners’ courses and learned how to start repairing their damaged credit score.
When they found their dream home in 2004, they knew it was the one. The cozy, century-old home had big picture windows and wood columns between the rooms.
Their real estate agent said he knew a mortgage broker who could get them into the house in 30 days. They were elated.
The house wasn’t a way to make a quick buck. They didn’t want to sell it in a few years to make a profit. It was the place they wanted to raise a family.
For a while, things were good. Both were working — April as a personal care assistant, Dan as a truck driver.
They became foster parents, opening up their home to children in need. They decided to adopt one, a teenage girl with special needs.
The baby they’d hoped for finally arrived. April decorated a small bedroom on the second floor with soft yellow walls and teddy bears gazing at the stars.
At Christmastime, she strung lights that twinkled against the house’s dark woodwork.
But it wasn’t easy. With Dan’s job being seasonal, sometimes things got tight.
They missed a few payments, but tried to make them up. When she had to send a payment after the due date, April was careful to include the late fee.
Just a few months after moving in, the Langes received a notice telling them that Countrywide Home Loans had sold the servicing rights on their loan to another company.
Similar notices would follow. At that point, they seemed insignificant.
What April did notice was something curious about the mortgage statements. Sometimes even when she sent a payment on time, they would show a late charge. Other times they would list “other fees” without any explanation.
In 2006, the Langes received a notice dated Jan. 5 from Countrywide thanking them for their payment of $836.58. The next installment is due Feb. 4, it said.
Then they received a default notice dated the very next day, Jan. 6, from Countrywide. Your total due is $986.62.
It didn’t make any sense. And there were other things April didn’t recognize — a “suspense balance,” with varying amounts listed. A property inspection fee. A fee for a “BPO” — a broker price opinion, she would later learn.
April didn’t understand what it all meant, but she kept paying everything she could, afraid of losing the house.
Sometimes she’d call the servicer and ask what it all meant. It’s just standard servicing of the loan, she was told.
In April 2006, the Langes were told they were being forced to purchase homeowners insurance, even though they had been paying for insurance on the house since they bought it.
And something called “escrow” began showing up on their statements, even though the Langes been paying their property taxes regularly and didn’t have an escrow account.
It became too much. Although the Langes were managing to pay their other bills, they were slipping toward foreclosure.
To try to save their house, they filed for Chapter 13 bankruptcy — not the kind that wipes away all your debts, but the kind that reorganizes your debts into a payment plan. They began making payments to a trustee.
They breathed a sigh of relief, thinking their home was safe.
Then, in November 2007, April got a letter from her insurance company, saying the Langes were due a large refund.
When she contacted the insurance company, she was told that an entire year’s worth of premiums for their homeowners’ insurance had been paid.
The couple began to suspect that the money they thought they’d been paying toward their mortgage principal and interest had actually been going elsewhere.
April went to her computer and began researching. What she learned was devastating.
Some companies that were supposed to collect mortgage payments were charging excessive fees, forcing homeowners to buy insurance when they already had it, holding payments until they were late so they could collect late fees.
April found 1,200 pages of formal complaints on the Federal Trade Commission’s Web site about the Langes’ current mortgage servicer, Texas-based Litton Loan Servicing. Litton also was the subject of a class-action lawsuit filed by customers who accused the company of charging improper late fees.
It felt like the sky was collapsing.
They decided they wouldn’t lose another dime, and filed for Chapter 7 bankruptcy.
Even then, the fees kept coming. A statement in April 2008 listed $890.81 in late charges and $3,357.06 in “other fees.”
On Halloween 2008, they went back to the house to collect the last of their belongings. April and Dan sent the kids to the car and shared a moment. They said goodbye, and both cried a few tears. They blessed the house to be a good home for whoever came next.
But they couldn’t outrun the bad luck.
With a foreclosure on their record, they couldn’t get another loan.
And now that they’d been homeowners, they didn’t want to rent.
They found a builder willing to sell them a split-entry in the Field of Dreams development in Rice in a lease-to-purchase arrangement.
The family settled in. Madeline made friends with the girl next door. She found and adopted a stray cat she named Tinkerbell.
But then, the Langes got a call from the bank. Your house is in foreclosure, they said. Do you want to buy it?
We’d love to, but who’s going to give us a loan? April asked.
So once again, the Langes began preparing to move. But this time, they were done with loans and mortgage companies.
They found a foreclosed house in Royalton and negotiated until they settled on a price they could afford to pay in cash, using Dan’s retirement money. It will take some work, but they’ll own it. There will be no more letters or phone calls threatening them with foreclosure and having to move again.
The Langes are giving up their foster care license.
Stability is important for foster children, who have already faced enough trauma. Frequent moves and upheavals just don’t work.
The most difficult part has been trying to explain it all to Madeline, who will have lived in three homes in her three short years.
She doesn’t understand, and her questions hurt.
Why did we have to move? When can we go home?