Financial 'nightmare' may be just about over for Hagerstown woman

January 13, 2013|By ARNOLD S. PLATOU |
  • Nancy Shulley leaves the East Irvin Avenue home in Hagerstown that is at the center of her financial nightmare.
By Ric Dugan/Staff Photographer

After enduring so much anger and pain in losing your house and filing for bankruptcy, how would it feel to receive as much as $125,000 in compensation?

“I don’t even think like that because it just sets you up for another downfall,” said Hagerstown resident Nancy Shulley, who lost the title to her city home after her lender filed for foreclosure in 2009.

“Things like that,” she said of the potential windfall, “just don’t happen to me.”

Now, because of the $8.5 billion settlement announced with 10 major U.S. lenders this past week, a windfall for Shulley just might happen.

“Wow-we!” Shulley said. “But I still don’t want to think it could happen.”

A financial ‘nightmare’

Readers of The Herald-Mail first met Shulley in March 2009 when her financial “nightmare” was profiled.

A research associate at the National Cancer Institute in Frederick, Md., Shulley paid $191,000 for a two-story brick house on Hagerstown’s East Irvin Avenue in 2005. She refinanced the mortgage twice and, after being unable to sell the house in 2008, she thought she got approval from her lender, U.S. Bank, to accept a woman’s offer to buy it for $148,300.

But after moving out, Shulley learned U.S. Bank had insurance against such losses and the insurer wouldn’t approve the sale unless Shulley agreed to pay back part of the claim. When she refused, the insurer refused to approve the sale.

Shulley complained to the Maryland Insurance Administration about the insurer’s demand.

“It’s like they’re holding my house for ransom,” she said in 2009.

Then, too, there were other problems.

The city of Hagerstown billed her $925.81 in early 2009 after a radiator burst inside the house, and 177,000 gallons had gushed out by the time a Realtor chanced by on Valentine’s Day weekend with a client.

A day or so later, a man working for the company hired by U.S. Bank to maintain the property called Frannie Parks, who was Shulley’s own Realtor, to say the bank wanted him to winterize the property, to shut off the water.

“Of course, winter’s almost over at this point. I said ‘too late,” Parks recalled. “That whole dining room floor was flooded and the basement was like a rain forest.

“I called the bank and said, ‘I can’t sell that house. I don’t think you can sell that house.”

As things turned out, the house wasn’t acquired by a nonbanking entity until two years later.

Washington County Circuit Court records show the bank’s foreclosure was filed in 2009 and ratified in August 2010. The following month, Maryland Department of Assessments and Taxation records show, the property was turned over to the Federal Home Loan Mortgage Corp. and sold to a St. Thomas, Pa., company in March 2011.

The selling price was $62,500.

And, in the meantime, Shulley said, the state insurance administration dismissed her claim.

‘A for-real thing’

U.S. Bank is among the 10 lenders whose $8.5 billion settlement with federal banking regulators was announced this past week.

It’s too soon to know for sure whether Shulley is in line to receive the compensation that regulators said eligible borrowers soon will be paid. The payments could range from hundreds of dollars for some borrowers to as much as $125,000 for others.

But what happened to Shulley does seem to fit the profile that regulators have announced. To qualify for payment, a borrower must have been in some stage of foreclosure proceedings in 2009 and/or 2010.

Shulley was.

And a person’s loan must have been serviced by any of the 10 lenders who have agreed to the new settlement.

Shulley’s was.

Even more to her credit than those things is that Shulley recalls receiving a letter in the mail that asked her whether she wanted to request an Independent Foreclosure Review of her case.

Indeed, it was just about a year ago that U.S. Bank and the nine other lenders in this past week’s settlement, sent 3.8 million such letters by order of federal regulators investigating alleged problems in how lenders handled millions of loans.

Suspicious of the letter — “you get so much weird stuff that looks to be official” — Shulley kept it “in my drawer at work for a long time ’cause at first, you just think it’s one of those things like an extended warranty for your car or something.”

Finally, one day, “I went online and researched it to see if it was a for-real thing. And then, I did find it was a for-real thing,” she said.

So having a copy of the newspaper’s 2009 story, Shulley said she attached it to the official form requesting the independent foreclosure review and mailed them both to the address given.

Then, this past May, Shulley got another letter. This one, from an independent review administrator in Minnesota, informed her that her request was being reviewed to see whether what had happened concerning the loan on the East Irvin Avenue property “meets eligibility” for consideration.

Furthermore, Shulley said the letter told her that she would be notified within 90 days if it was determined that “you do not meet the eligibility requirements or the information was not about errors.”

So far, she said this past week, she’s heard nothing. That “definitely” leads her to think her case still is under review, she said.

A change in luck?

Hearing now from a news reporter about the settlement and about how it might change her luck, Shulley is cautious.

“I think it’d be wonderful if it was” to happen, she said.

But she isn’t ready to think large yet. After all, since losing her house here, she has become a renter — first in Frederick and now in Hagerstown.

“This whole thing has made me a realist. I mean, it’d be great to have something like this happen, something you see on TV. I think maybe something will happen, but I don’t like to think about it, to count on it.

“Because, just like the house, I counted on them (the lender) doing what they said and they didn’t,” she said of almost being able to sell the house and escape foreclosure. “And then, I feel bad because that woman (who tried to buy the house) didn’t get the house that she wanted.”

And then, there was the bankruptcy that Shulley said she had to file. Through it, she said, she was granted relief from her debts, but dealing with people’s reactions “has actually been one of the most demeaning things” that has happened to her.

Not long ago, she said, she went to a local bank where she has an overdraft account.

“I went in there and the woman (employee) there acted like she didn’t even want to speak to me,” Shulley said. The bank employees “knew about the bankruptcy” and that the overdraft account had been included in the bankruptcy protection, Shulley said.

While trying to talk to the bank employee, Shulley said, “I noticed a picture of her family and I thought about saying, ‘Well, you know, this (bankruptcy) can happen to anybody.’”

Shulley didn’t voice the remark, but she said this past week, everyone’s eyes should have been opened wider by the financial setbacks suffered by many area residents since the recession began.

“Circumstances change and they’re not always great,” she said. “You just have to deal with it best you can.”

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