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Daniel Cubias

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Are the Banks Still Coming for Your House?

Posted: 11/06/11 09:42 AM ET

Depending on whom you ask, the housing crisis is over, still going on, or entering a new and far more sinister phase.

Regardless of what happens to the housing market in the near future, we Latinos are doing our part to bolster this crucial component of the U.S. economy. In fact, Hispanics "are thriving during a record low housing market. In the past decade Latino homeownership has risen 2%."

With hope, none of these new homeowners will find themselves dragged into the vortex of financial and emotional turmoil that swirled around Migdia Chinea, a filmmaker. Her story illustrates the extremes to which banks will go to hijack someone's home, and it serves as a cautionary tale for all those Latinos who think their houses are safe.

Now, Chinea is not one of those much-maligned users of subprime mortgages who bought "too much house" in the last decade. She has lived in her California home for thirty years, and she has never missed or been late with the payments.

So how did she end up accumulating a pile of letters from Bank of America that threatened her with foreclosure?

It started a few years ago, with a simple phone call.

"I was going back to school," Chinea said. "So I called Countrywide to see if it was worthwhile to refinance my house."

As we all know, with the benefit of hindsight, Countrywide was the juggernaut at the forefront of the housing collapse. Soon after Chinea spoke to the bank's representatives, Countrywide was sold off to Bank of America, and Chinea was bounced to one person after another, all of whom told her that, with her stellar credit, refinancing would be no problem.

But Chinea didn't like how things were going, so she dropped the matter. She thought nothing more of the topic until a year later, when she received a mysterious letter from BofA.

"The letter said I should be making lower payments on my mortgage," Chinea says. "I wrote them back saying I had never signed anything or enrolled in any program to lower my payments. So I just kept paying my full mortgage."

But unknown to Chinea, her payments were going into an escrow account. That meant nothing was going toward her mortgage. Soon, she was being assessed late fees for falling behind on her mortgage, even though she had been paying it in full all along.

"I talked to twenty people, but nothing changed," Chinea says. "I wrote over one hundred letters, to everybody from the bank's customer service to Timothy Geithner. All I ever got back was form letters."

And soon those form letters took an ominous turn. BofA threatened Chinea with foreclosure. Her credit plummeted, and she started crying daily over the possibility that the bank would seize her home. In a truly Kafkaesque twist, she could not even find out why her home had been targeted or what she had supposedly done wrong.

As it turned out, the bank had taken Chinea's request for information about refinancing and enrolled her -- without her knowledge or permission, she says -- in the Home Affordable Modification Program. The program is designed to help homeowners "avoid foreclosure by modifying loans to a level that is affordable for borrowers."

Through a dizzying series of bureaucratic screw-ups and bizarre assumptions, Chinea was lumped in with delinquent homeowners. As a result, BofA came after her house.

"HAMP isn't just a failure," Chinea says. "It's a fraud. I really think Bank of America has used this program to capture people's homes."

Once Chinea found out what was going on, she threatened a lawsuit. BofA finally backed off at that point, sending a letter stating that her account "was no longer impounded" and that her house was not in danger of foreclosure.

This was the full extent of the bank's apology.

"I went through two years of hell for nothing," Chinea says.

She notes that she is out a significant amount of money for imaginary fees and penalties, and her credit score is still lower than it was before she made that life-changing phone call.

However, her house is safe, apparently. And she has channeled the rage at the way BofA treated her into her short film anonymous (street meat), which has played numerous festivals. She says the film is more of a metaphor for her situation than an overt statement.

When she does talk directly about what happened to her, however, "Somebody always says, 'That's what you get for trying to game the system.' But I didn't know there was a system to game," Chinea says. "I never asked for any of this."

She wonders how many people have similar stories, and she believes the banks are running roughshod over homeowners with the tacit approval of the government. Needless to say, her opinion of the state of America has grown pessimistic lately.

"Something has happened the last few years," Chinea says. "Nobody really cares about other people anymore."