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SALT LAKE CITY -- Many Americans have applied for the federal government's loan modification program, meant to keep them in their homes. Instead, less than a quarter of those who signed up have gotten any help.

The banks are being sued by several states and consumer class action lawsuits for their failure to follow through. But a Pleasant View man is standing up to Bank of America on his own.

Waters' loan modification nightmare

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.

Pleasant View resident Mike Watters is taking Bank of America to court over loan modification promises he says the bank didn't keep. (AP Photo/Mark Lennihan, file)

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.

Waters fights back

Meanwhile, Waters kept firing off certified letters to Bank of America, asking where his missing mortgage note was, Three months later, the bank responded with foreclosure.

"I've been fighting back," Waters said.

But how is one man fighting a seemingly losing battle by himself? A Supreme Court ruling he stumbled across.

"[It] said that if somebody is in court pro se -- which is me, no attorney -- that their case can't be rejected or thrown out on technical grounds," Waters explained.

That tiny boost of confidence carried him into federal court.

If the judge ends up giving me nothing, then so be it. But I'm going to fight. I'm fighting on behalf of everybody who is getting the shaft by the banks. –Michael Waters

#waters_quote

"Bank of America threw a lot of big words, a lot of thick contracts, and lots and lots of paperwork at me to try and intimidate me. But at the end of the day, the judge said, ‘You guys made a contract with this guy and you put him in jeopardy,'" Waters said.

The court transcripts KSL News obtained seem to back that up. When Judge Bruce Jenkins presses Bank of America to make a deal with Waters, the bank says it would rather foreclose. The reason: It's an FHA loan, and it's insured.

"It just blows my mind that the bank admitted in court they'll get more money," Waters said.

In federal court, Michael Black, the attorney for Bank of America, tells the Judge Jenkins "...where the bank stands right now is they're going to be able to collect the full face value of the note from either Mr. Waters or the property; if they're unsuccessful, then the FHA." Jenkins responds by chastising Bank of America and the "zillions of dollars" the feds have paid to the bank.

"With all of that, they say we're not interested in modifying our relationship ... because the FHA is on the hook, and we're going to get paid either here or there. That's just incredible, just incredible," Jenkins says. "They're not serious. I know that you're serious. I know that Mr. Waters is serious. I don't think your bank is serious at all."

"It's not about anything but the bank getting the almighty dollar," Waters said.

Jenkins granted Waters a two day trial against Bank of America, which is scheduled for April.

"If the judge ends up giving me nothing, then so be it. But I'm going to fight. I'm fighting on behalf of everybody who is getting the shaft by the banks," Waters said.

Our calls to Michael Black, the Salt Lake attorney representing Bank of America, were not returned. Waters and Black will be back in court on Friday for a pretrial hearing.

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Story written by Candace Madsen, with contributions from Lori Prichard.

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