Michael Waters never wanted to fight this battle alone. No attorney would take his case. Those he talked to said he had no chance of winning and the case wasn't worth their time -- the bank's pockets are too deep.
So, Waters took the case to federal court by himself.
"Every time I go into court I'm shaking like a leaf, I'm perspiring, I'm nervous, I'm scared," Waters said.
He fixes computers by trade, but now spends hours pouring over legal documents. His troubles began last year when he lost his job. He says he contacted Bank of America about his mortgage payments "just to see if they could let go of a late fee or something."
Instead, Bank of America offered Waters a three-month forbearance that would drop his payments drastically. The bank told him he should have no problem getting a permanent loan modification.
"It thought, ‘This is like a blessing. This is wonderful,'" Waters said.
But then Waters got a letter in the mail.
"It says we mutually agreed upon a special forbearance, but because the payment has not been received we are canceling it," Waters said. The letter said Waters should have paid by on the 11th day of the month, but he says his payment history specifically says the payment is due on the 26th of the month.
When Waters called Bank of America to get to the bottom of it, he heard a brand new story. He says the bank couldn't offer him a forbearance -- it didn't own the note to his mortgage.
"Well, I said, ‘Who does own the note? Maybe we could work something out.' And they said, ‘We don't have that information,'" Waters said.
Bank of America then dropped a bomb, telling him he must make his mortgage current with an immediate payment of $4,400.
The cruel irony here: Waters says the bank told him to use his savings and pay off all his debt, so he would qualify for the forbearance. Waters had no job and no money.
When the judge pressed Bank of America's lwayer to make a deal with Waters, the lawyer says the bank would rather foreclose. The reason: It's an FHA loan, and it's insured. Here is the excerpt from the court transcript of Waters vs. Bank of America:
MR. BLACK: I MEAN WHERE THE BANK STANDS RIGHT NOW,
YOUR HONOR, IS THEY'RE GOING TO BE ABLE TO COLLECT THE FULL
FACE VALUE OF THE NOTE FROM EITHER MR. WATERS OR THE PROPERTY
OR FROM -- IF THEY'RE UNSUCCESSFUL, THEN THE F.H.A. HAS
ALREADY GUARANTEED THIS AND THEY'LL GET IT FROM THEM. AND
LOOKING OUT FOR THEIR SHAREHOLDERS, OF COURSE, THEY HAVE TO
TRY TO MAKE SURE THAT THEY'RE NOT GOING TO GET ANYTHING LESS
THAN THAT FROM WHATEVER THOSE SOURCES ARE.
THE COURT: WELL, WHAT YOU'RE TELLING ME IS THAT
THEY DON'T WANT TO WAIVE.
MR. BLACK: CORRECT. I DON'T THINK THEY --
THE COURT: IF YOU'RE TALKING ABOUT THEIR CONCERN
WITH THEIR SHAREHOLDERS.
MR. BLACK: I THINK GIVEN THE POSITION THEY'RE IN,
THEY -- AS TO MR. WATERS, YOU KNOW, OR THE F.H.A., THEY DON'T
NECESSARILY CARE WHO THEY GET IT FROM. THEY'D BE HAPPY TO
REDUCE THE OBLIGATION –
THE COURT: THAT'S WHAT -- THAT'S WHAT FOLLOWING --
FOLLOWING THE ADMONITION OF ALL OF THE POLITICAL PEOPLE, AND
ALL OF THE BAILOUT MONEY, INCLUDING ZILLIONS TO THE BANK OF
AMERICA, AMONG OTHERS, WITH ALL OF THAT, THEY SAY WE'RE NOT
INTERESTED IN MODIFYING OUR RELATIONSHIP WITH THIS ONE THAT
MAY WORK BECAUSE THE F.H.A. IS ON THE HOOK, AND WE'RE GOING TO
GET PAID EITHER HERE OR THERE. THAT'S WHAT I CALL THE MOST
PATRIOTIC POSITION I'VE EVER HEARD. I CONGRATULATE THEM ON
THEIR PATRIOTISM. THAT'S JUST INCREDIBLE, JUST INCREDIBLE.
THEY'RE NOT SERIOUS. I KNOW THAT YOU'RE SERIOUS. I KNOW
THAT WATERS IS SERIOUS. I DON'T THINK YOUR BANK IS AT ALL
SERIOUS. BUT I DEAL WITH UNSERIOUS PEOPLE ALL THE TIME. SO
LET'S HEAR WHAT MR. WATERS HAS TO SAY IN REFERENCE TO THE
OFFER MADE. AT LEAST IT DIDN'T TAKE NINE MONTHS.
Read the entire court transcript. Click here.