BREWERTON -- A Brewerton couple says they nearly lost their home due to a "failed" federal program designed to save homeowners from foreclosure.
Paul and Agnes Lazzaro had their modest home in Brewerton built for them in 1992 when times were good for them and their family. Like millions of Americans, the Lazzaros fell upon hard times. Paul had to take a lower paying job and the couple was having a difficult time making the $1,133 monthly mortgage payment.
Last year, Paul Lazzaro heard about Making Home Affordable, a federal program offered by the Obama administration which promised to provide billions of dollars to help up to nine million homeowners like the Lazzaros avoid foreclosure. "We see President Obama come out with this Making Home Affordable and called the bank, and we applied for it."
Under the Making Home Affordable program, banks were actually allowed to reduce homeowners mortgage payments before they even qualified. In August of 2009, Chase Bank, which held the Lazzaros' mortgage, lowered their monthly payment by $600 to $533 per month. Paul claims he was never told it was on a trial basis for just three months. "Never, never from day one did they ever tell me that's what they were doing." Lazzaro told CNY Central's Jim Kenyon.
Lazzaro says in December, Chase told him he may not qualify for the Making Home Affordable program, but he says the bank let him continue with the lower mortgage payment while they reprocessed his application. He says he didn't know that every month he was digging a deeper hole.
In July, Chase informed the Lazzaros they now owed $10,000 and faced possible foreclosure unless they paid up by September 4th. Lazzaro said he was misled. "They never told me that was going on and at the end I was told I was ten thousand dollars in arrears... I think it's wrong."
Chase issued a statement: "After we started the homeowner on a trial modification using income information provided by them, our final review using verified data showed that they did not qualify."
The Obama administration confirms the Lazzaros are not alone. A spokesman for the the Treasury Department says that of the 1.3 million homeowners who received lower mortgage payments on a trial basis, 663,000 have since been cancelled - or 51 percent.
The Making Home Affordable program has been modified. The administration now requires lenders to verify income eligibility before lowering mortgage payments.
The Lazzaros were lucky. Agnes's mother gave them $88,000 out of her life savings to pay off their mortgage. "She says, no it's not going to happen. She's not going to let them get away with this." Agnes said of her mother.
