FEMA Delay Pits Brandon Couple Against Bank Of America

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Eighty-one property owners in the state who were especially hard hit by Irene remain in a sort of financial limbo. They were the first accepted into FEMA’s hazard mitigation buyout program – but they are all still waiting for the money. Property owners were expecting the FEMA buyouts to take place last March but now may have to wait until next March.  It’s a delay that’s pushed many to the breaking point, including Brandon residents Linda Bunn and Mary McManus.

The couple retired from their jobs in Rhode Island 8 years ago and bought what Bunn described as their dream house. "It was adorable. It was just the house we wanted," the 70-year-old said.

It was a small brown bungalow next to the Neshobe River in Brandon and Bunn says it was perfect for them. "We used to sit out here it was so nice – you could hear the river at night – so pretty so nice to hear."

But when tropical storm Irene hit, the picturesque river they loved, roared over its banks and destroyed their home.

"Ohhh! Everything was gone," says Bunn, every piece of furniture was gone! Everything! We had nothing left," she says quietly.

The women had excellent flood insurance, but rebuilding in the same flood prone area would be too costly.

A kind neighbor provided an empty house for the women to live in, but the pair struggled to make ends meet. In addition to their monthly mortgage, they had to buy a car, and replace other lost items. The stress took a toll on Mary’s health and more than once Linda admits they had to stop buying food. "I just felt like we fell into a hole and there’s nothing else for us," says Bunn.

About a year ago, town official in Brandon realized the women needed help and called Vermont Legal Aid. That’s when attorney Jessica Radbord got involved. "We got to work right away on getting FEMA benefits. And once we did that it happened really fast," she says.

Radbord says because the house was so heavily damaged and so close to the river it was fast tracked for FEMA’s hazard mitigation buyout program. That was good news, because the FEMA money would allow Linda and Mary to pay off their mortgage and move on. But while state officials expected the federal funds last spring, everyone is still waiting.

Jessica Radbord says her clients began to fall behind on their mortgage. "I tried to work with Bank of America," the lawyer says. "My first thought was there are tens of thousands of dollars sitting in an escrow account – that flood insurance money. And we know that it’s never going to get spent on repairs, so why don’t we use a small fraction of those funds to pay the mortgage going forward?"

Radbord says an associate at Bank of America was able to secure two months worth of payments for the women using their insurance money. The couple requested in writing that the bank continue the arrangements ‘til the buyout. 

But Radbord says it didn’t happen and she was never able to be speak with that first bank associate again. 

Even though she had his name and direct extension number, she says no one would connect her. "Each time I called I would speak to a different person. And they would listen to the story and they would say, ‘This is terrible. I’ll personally see what I can do about it.’"

But she says they never called back. "When I called to check on things," she says, "probably the third or fourth time. The person said this request has been denied three times."

That’s when Radbord called Sue Minter, Vermont’s Irene Recovery Chief for help. "We wrote letters to the bank," says Minter, "pointing out that if in fact that bank foreclosed they would be getting far less for the property than if they wait for the buyout.  Because," she says, "it would be based in the buyout on pre-Irene assessed value.  Whereas if they foreclosed right now it would be much lower value property."

"What really blows your mind about this," says Jessica Radbord, "is the Vermont Disaster Relief Fund is able to contribute one months’ payment to Linda and Mary’s account."

But in order for fund officials to release the money, Radbord says Bank of America needed to fill out a W-9 tax form. "And everyone I talked to there said I’m not the person to sign this and I said well why don’t you find out who can? I did send this form to the office of the CEO and president," she says, "to our case manager there, and heard absolutely nothing, even after leaving follow up messages."

Radbord says it wasn’t until Senator Leahy’s office got involved that the form finally got signed. Because of the severity of the situation, Vermont’s Disaster Relief fund paid two months worth of mortgage payments plus late fees for the couple. That was November 21st.  

Five days later Linda Bunn says she received the latest of many warning letters from the bank. "It’s funny," says Bunn, "because the first sentence of this Bank of America note to us says we have not received your last two regular scheduled payments and are concerned you may be having difficulty making your mortgage payment." Bunn rolls her eyes. "Does that top it off right there?" she asks. "They know this! They’ve been told many, many times."

Bank of America’s handling of residential mortgages and foreclosures has come under intense scrutiny in recent years. The Office of the Comptroller of the Currency, the federal agency that regulates national banks, including Bank of America issued a report last year criticizing a number of the banks practices pertaining to residential mortgages and foreclosures.  

The penalties have been costly. This year Bank of America agreed to pay more than $10 billion to victimized borrowers and others as part of a class action lawsuit. 

Linda Bunn and Mary McManus will get none of that, however. Linda says what’s ironic is that not too long ago, Bank of America was in trouble. "We bailed them out as a taxpayer," she says, "and now they’re not helping us." 

Well, now maybe they finally are.  After calling Bank of America last week to get their side of this story, spokeswoman Kelly Sapp told VPR she would look into the matter. No one at the bank would agree to an interview, but Sapp issued this response in an email a day later. "We have been actively working with Mary McManus and Linda Bunn to help them through this process. We will further assist them by offering to forbear their mortgage payments until March when the property buyout is expected."

Attorney Jessica Radbord smiles at that.  She says she’d asked the bank for that very thing back in July.

The full reports issued by the Office of the Comptroller of the Currency are here and here.

For consumer complaints regarding national banks, the Office of the Comptroller of the Currency provides this link.

You can find select board documents from Brandon and other Vermont cities and towns at VPR’s Public Post. While you’re there, post a comment or send a message on Twitter using the hash-tag #PublicPost to open a discussion about an issue in your town. For example, how is your town mitigating future flooding?

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