How well is the government's loan modification working? WalletPop's four-part special report continues with profiles of some of those trying to get help. To read the overview, click here.
Public relations consultant Mark Bonacorso faced the good and bad news of divorce with resolve. The good: he got the 3,500-square-foot adobe in northwest Tucson. The bad: he also got the first and second mortgages and the $2,700-a-month payments.
He wanted to make it work, especially since his home was worth less than he owed.
At first, with business strong at his firm, Media Ink, this seemed feasible. Then, as the recession slowed work, forcing him to lay off his two employees in March, those payments became daunting.
Bonacorso was not looking for Bank of America, his lender, to cut his principal. He called hoping to reduce his monthly payments by combining his first and second mortgages, lowering their interest rates -- now 5.875% on his first; 7.625% on his second -- and extending the loan's term from 30 years to at least 40.
Instead, he was told that since he was current on his loan and not headed for foreclosure, he did not qualify for a modification.
"When I asked if I started skipping mortgage payments, would I then be eligible for a loan modification program, their rather terse reply was my mortgage should be my top priority," said Bonacorso, 52.
Then came solicitation letters from Bank of America, offering modifications and mortgage "checkups."
This time, Bonacorso was told that since the market value of his house -- around $360,000 -- is less than the $400,000 he owes, the bank couldn't help him. (Bonacorso and his then-wife paid $435,000 for the property in September 2005 and were then advised to avoid a jumbo loan by taking out first and second mortgages simultaneously, a setup he said they qualified for in 20 minutes over the phone.)
"My personal thoughts on this: Bank of America is only interested in helping borrowers that they never should have given loans to in the first place," Bonacorso said, "and is simply going through the motions to appease the (Obama) administration."
These days, signs of economic recovery are trickling into Bonacorso's business, giving him hope that alternative avenues for refinancing will open up again.
"Simply put," he said, "I'll do whatever I can to keep this house."
Faces of loan modification: Mark Bonacorso, Tucson, Ariz.