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.
Christine Attalla is among the lucky. The suburban Chicago homeowner not only got a temporary loan modification, but she's on track to convert it to a long-term adjustment before Christmas.
She even calls herself lucky, although when she does there's a quiver in her voice. That's because in the process, her credit took a beating.
For a solo entrepreneur -- Attalla, 38 and divorced, runs her own public relations company -- poor credit is a serious problem.
It all began last spring, when Attalla realized the economic downturn was making it increasingly difficult for her to manage her $3,000-a-month payment on her Bolingbrook home. And she was pregnant, so she knew she'd have less earning power later in the year.
Attalla heard from a friend about the modification program, applied in April through her lender, CitiMortgage, and waited.
She was approved for a three-month trial reduction -- for June, July and August -- which cut her monthly payments in half. If she kept current, she said, she would qualify for a permanent modification that started with a 2% interest rate and tiered up after a decade. So far, so good.
Then, the bank's debt collection arm started to call. At first, Attalla would calmly explain the situation.
"This went on for months," she said. "I would return their calls saying I was undergoing a mod. They would say they didn't know anything about it and to call their loss mitigation department. I would call loss mitigation and they would say that yes, my records showed I was under the three-month period and to ignore the calls."
In August, Attalla had her baby -- via C-section -- and after five days in the hospital returned home to a very troubling letter.
"I came back from having my son to an envelope saying, 'We are going to assess your home for sale,'" she said. "You can imagine, after surgery, a new baby and hormones ... I went nuts."
More phone calls, more tears, until finally someone at CitiMortgage figured out the problem: due to a clerical error, Attalla said, her original loan had never been processed. By then, however, her credit already was shot and so far she's been unable to clear her record.
Attalla reapplied for the temporary modification, and qualified again, but that was not quite the end of her story.
"The punch line: after all the hassle, they sent me someone else's paperwork with their address and their loan payment information," she said. "I didn't know whether to pay their loan or the amount that was given to me by phone. I paid the higher of the two and still don't know where the excess payment went."
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