Robert Galanida was a skinny teenager when a drunken driver rammed the pickup he was riding in, hurtling him to the blacktop and paralyzing him from his shoulders down.



With the help of multimillion-dollar legal and insurance settlements, he and his mother now live comfortably on annuity payments of $22,000 a month.



So they are at a loss as to why his mortgage servicer, Bank of America, has repeatedly tried to evict him from his Tualatin home. Custom-built 14 years ago for less than $400,000, it boasts wide halls and doorways to accommodate his wheelchair and an air purification system to keep his body temperature and breathing in check.



How did someone who could so clearly afford a $4,800 monthly loan payment fall so far behind?



Galanida, 41, stopped payment in 2009, insisting a discrepancy arose in his loan after Bank of America took it over from troubled Countrywide Home Loans. Bank representatives told him to continue withholding payments while they investigated, his mother said.



But then, without offering Galanida a workaround plan, the bank foreclosed on his home, sold it to another lender and tried to evict him. Galanida's pleas for help from federal authorities and Oregon Attorney General John Kroger haven't resolved matters.



"I am not aware of any options to save the house," a paralegal with Bank of America's law firm told Galanida on July 29.



Galanida's case exemplifies the flawed foreclosure and modification practices that have befuddled distressed homeowners and led to dozens of lawsuits against Bank of America in Oregon alone. The bank now faces a crisis in investor confidence amid mushrooming legal bills and loan costs linked to the Countrywide purchase.





The U.S. Treasury Department pays servicers to permanently modify troubled loans under the Making Home Affordable program. But it has withheld incentives from Bank of America Corp. and JPMorgan Chase & Co. for most of the year, saying they needed to make "substantial improvement" in borrower outreach, borrower evaluations and program reporting.

A Bank of America spokeswoman, Jumana Bauwens, said the bank has done nothing wrong while repeatedly trying to help Galanida come current on his loan. It reviewed his case for two loan modifications and postponed the foreclosure sale three times, Bauwens said.

"The final decision was based on the severity of the delinquency and (our) many attempts at assistance," Bauwens said via email.

Galanida's mother, Joanie Ahrenkiel, who handles his affairs, said she wasn't aware of all the bank was doing because she often couldn't reach representatives on the phone, rarely spoke to the same person and received conflicting information.

At one point last September, Bank of America gave Galanida written assurance that it would postpone any foreclosure proceeding while reviewing ways he could keep his home.

Days later, the bank sold his home in foreclosure and posted an eviction notice on his door.

"Maybe I screwed up somewhere along the way," said his mother, "but this thing just got out of control."

Earlier foreclosures



Galanida won a $4 million settlement from the city of Fremont, Calif., alleging it spent public money intended to improve the intersection where his accident took place on other projects. He also received monthly annuity payments from insurance companies.

Galanida's family moved to Oregon and had his house built in 1997. After he made payments on his $355,000 mortgage on time for a number of years, Washington Mutual foreclosed on his home in 2003 and again in 2005. Ahrenkiel says the bank misapplied her son's payments while struggling to integrate mortgage portfolios it had purchased into its servicing system.

The family paid attorneys more than $67,000 to straighten out the mess. In doing so, Galanida ended up with a larger loan balance, a higher interest rate and a loan serviced by Countrywide.

When Bank of America bought Countrywide out of near-collapse in 2008, Ahrenkiel said she noticed a discrepancy in the loan balance. She also wanted to avoid repeating the Washington Mutual nightmare. So she withheld a payment and asked the bank to investigate.

When the bank proposed modifying the loan, Ahrenkiel said, representatives ignored her protests.

"I kept explaining to them that he wouldn't qualify. He makes too much money," Ahrenkiel said. "But you don't talk to the same person."

Ever since the Obama administration launched its mortgage modification program in March 2009, lenders have routinely told homeowners they need to stop making payments to qualify for a modification, consumer advocates say. Ahrenkiel was so stunned by that recommendation that she put a bank representative on speaker phone for Galanida and his in-home nurse, Veronica Ortega, to hear.

"I didn't think Robert would believe me otherwise," Ahrenkiel said.

Months later, BAC Home Loans sent Galanida a notice dated Sept. 16, 2010, saying he'd failed to qualify for the Obama administration's modification program. But the bank was reviewing other options, including a different modification program.

"If a foreclosure proceeding or foreclosure sale of your home is currently pending and on hold, that hold will continue and remain in effect while you are considered for other home retention programs," the letter said.

Four days later, the bank's foreclosure arm, ReconTrust Co., sold Galanida's home to Wells Fargo Bank, trustee for a large investor-held trust containing mortgage-backed securities. The price: $346,500.

Rod Erickson, a Gresham real estate agent, posted an eviction warning on Galanida's door on Sept. 23 on Bank of America's behalf, offering to pay a "substantial fee" if he vacated his home in 14 days. After listening to Ahrenkiel's story, Erickson said he encouraged the bank to reconsider her son's case.

"I've been selling foreclosures for 10 years," Erickson said. "I've heard about every story under the sun. If there's someone I believe, it's this gal."

Another eviction notice



Ahrenkiel said bank representatives assured her the sale was a mistake. They told her to wait for further instructions on what to do next, she said.

She next heard from Bank of America in January. It had again become her loan servicer and was sending another eviction notice.

Ahrenkiel panicked. She filed complaints with the U.S. Office of the Comptroller of the Currency, U.S. Rep. David Wu's office and Attorney General Kroger. She also begged the bank for help making a direct appeal to the loan's investor.

Three months later, in a letter to Galanida, Bank of America customer advocate Eric Scher said the loan balance had been correctly reported by Countrywide. "Our records," he said, "do not reflect that Bank of America ever informed you to cease making payment."

The bank, he wrote, reviewed Galanida for an in-house modification in May but found he didn't qualify.

"Regrettably, Bank of America will not be able to rescind the foreclosure on your home," Scher wrote. "Unfortunately, repurchase is the only option for home retention open to you at this time."

On July 29, Bellevue, Wash., law firm Routh Crabtree Olsen emailed Galanida, saying the eviction action had been resumed.

Eviction back on hold



The following week, The Oregonian inquired about Galanida's case with Routh Crabtree Olsen attorney Janaya L. Carter and a bank spokesman. Carter did not respond, but on Aug. 3, the law firm emailed Ahrenkiel: "The eviction is back on hold."

Recently, the bank offered Galanida a new modification. The deal would add $99,000 to the loan balance, bringing it to $600,000. His new monthly payment would be $5,200; his interest rate 7.9 percent. It also wanted $16,000 upfront in foreclosure fees and delinquent escrow.

Last weekend, though, he received a bank statement with completely different figures: A past-due repayment amount of $39,500, a loan balance of $494,000 and an escrow account $19,000 in the hole.

"This is what I've been dealing with all this time," Ahrenkiel said Monday of the conflicting messages. She plans to push for a more favorable deal than she was initially offered.

Kroger spokesman Tony Green said the attorney general's staff continues to investigate the case while working with both parties "to try and straighten this out."

In the meantime, Galanida received a check from Countrywide in the mail. It was a settlement of a lawsuit filed by the Federal Trade Commission alleging Countrywide had acted unlawfully while servicing consumers' home mortgage loans.

The amount: $36. The accompanying letter warned him to cash it by Sept. 19.

"After that, your check could bounce," the letter said, "and you could be charged a bank fee."

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