$49,825 didn't satisfy lender

When Mardee Jerde's bank threatened to foreclose on her house if she didn't immediately make up nearly $50,000 in overdue mortgage payments last year, she paid up -- even though it left her virtually penniless.

Two days after J.P. Morgan Chase acknowledged receipt of Jerde's $49,825 money order, however, the bank told her she didn't qualify for the one thing that would have made it possible for Jerde to remain in her home in Rush City, Minn.: a permanent loan modification.

Jerde said she feels betrayed by the banking giant. She said she did everything demanded by Chase, including making partial mortgage payments for 11 months after a car accident left her unable to work. To satisfy the bank, she wound up using the entire settlement she won from her lawsuit over the crash.

"If I had known that [the bank would foreclose anyway], I never would have sent that money," said Jerde, 68. "I would have been out of my mind. That was given to me to live on. Now I have nothing."

Chase officials said Jerde's first request for a permanent loan modification was rejected because she didn't have enough income. Her second was rejected after the bank said she failed to turn over all required paperwork on time.

But after being contacted by Whistleblower, bank spokeswoman Christine Holevas said Chase will try to intercede on her behalf. Without the bank's help, Jerde could be forced from her home as soon as Aug. 23.

"I will try and find a solution," Holevas said last week. "I can't promise that I will. I can reach out to some folks."

"The banks put out their hand and say, 'We're going to help you,' and then stab people right in the back," said Carl E. Christensen, a Minneapolis attorney who specializes in real estate and consumer litigation.

"Nobody ever gets loan mods," Christensen said. "I meet with up to a dozen people a week and have been doing this for 2 1/2 years. I've only seen five modifications and only one that ever gave any substantive benefit."

Bank has been 'uncooperative'

Jerde's problems began in March 2008, when she was broadsided by another driver on Hwy. 10 as she drove home from a Walmart in Elk River. Injuries made it impossible for her to keep working as a food safety inspector, so she immediately called her bank to explain she could no longer make her monthly mortgage payment of $1,763.10.

Jerde, who earned nearly $40,000 a year before the crash, didn't make any mortgage payments until July 2009, when the bank agreed to a trial loan modification. Her new monthly payment: $875.59.

Holevas said the demand was not related to Jerde's request for a permanent loan modification. In fact, she said the bank first notified Jerde that it had rejected her application in March 2010, well before the request for nearly $50,000.

Jerde said she didn't get that news until July 23, 2010, two days after Chase acknowledged payment of her overdue mortgage balance.

Unable to cover the higher monthly payments, Jerde stopped paying the bank, which began foreclosure proceedings. Her two-bedroom house was officially sold to the government at a sheriff's auction in February, but Jerde can reclaim her house if she is able to pay off her outstanding mortgage balance of $209,008 by Aug. 23.

Jerde's only hope has been getting the bank's permission for a permanent mortgage reduction. Despite telling her 'no' last year, Chase continued to dangle the possibility of help. Jerde's attorney, Randall Johnson, said Chase representatives told him as recently as last week that Jerde's loan modification was still under review and "had been sent to the executive offices."

Holevas, however, said Jerde's application was rejected a month or two ago because she failed to submit all of the required documents on time. She said the government requires such applications to be "absolutely perfect."

"They've been very uncooperative in processing that application," Johnson said.

Meanwhile, Jerde is getting more and more nervous as the end of her six-month redemption period approaches.

"The only thing I've got bought and paid for is a lot in the cemetery," Jerde said. "And I might be camping on it."