Dee Luce stands in the kitchen of her Silver Spur home. Dee and her husband, Al, started building the home in 2001 and have been working to modify their loan for the past three years. Al has written Bible verses on the wall as a source of encouragement.

Photo by John F. Russell

Dee Luce stands in the kitchen of her Silver Spur home. Dee and her husband, Al, started building the home in 2001 and have been working to modify their loan for the past three years. Al has written Bible verses on the wall as a source of encouragement.

Struggle continues for Silver Spur home a decade after construction began

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Dee Luce tends to flowers in the yard of her Silver Spur home. Dee and her husband, Al, started building the home in 2001 and have been working to modify their loan for the past three years.

— The third quarter economic forecast from Yampa Valley Data Partners is rosy on the real estate market here.

Median listing prices are improving, more inventory is available, the number of days a home is on the market is dropping and fewer foreclosures are being filed, according to the report.

It’s hard not to be bullish on the market in Routt County. Affordable single-family homes quickly are being snapped up, and some new building is in the works.

But beneath the current indicators and cautious hope, the scars of a bubble and misplaced faith remain. Some of those scars are as much physical as they are emotional.

In the Silver Spur neighborhood west of Steamboat, an unusual home sits among the more traditional, wood-framed homes.

The outside of the rammed earth home is finished and handsome. Flowers bloom in the manicured yard. But on the inside, walls are bare and gray, and the ceiling is exposed. Ladders stand in place of where stairs were envisioned.

Progress on the home Al and Dee Luce envisioned is crawling, and a list of troubles more than a decade long haunts the project that was supposed to be their retirement.

The home is notorious in the neighborhood because of the Luces' long battle with the homeowners association, which pushed the Luces for years to finish construction on the home. Started in 2002, construction on the home still isn't finished and it languished for years as a neighborhood eyesore.

The battles with the homeowners association cost the Luces fines, and a lien hurt attempts for financing and finishing the project.

“I’m the only one who could see it finished,” Al Luce said.

His plans were expansive. A central staircase was going to sit in a circular entry fashioned like a kiva and have a 30-foot climbing wall. He envisioned a garage, a workshop and guest rooms for his children and, now, grandchildren.

“They come up, and it’s like rustic camping,” Luce said about its current state. “I can’t think of it.”

The original plan was to build the home for cash. That strategy was scrapped as construction lagged and Luce struggled to secure financing to finish the home.

After the dispute with the Silver Spur homeowners association, Luce was able to get a construction loan from GMAC in 2006 for about $650,000, he said. The principal on that loan now stands at $704,771 and is held by Deutsche Bank Trust Co. Americas as a trustee for Residential Accredit Loans. The home is about $400,000 underwater.

Currently, Luce is trying to get a modifications to his loan. Ocwen Financial Servicing is the entity handling his mortgage.

Mortgage servicers like Ocwen don’t originate or hold mortgages. They just make the calls and collect payments. Such servicers have been criticized as obstacles to receiving help for borrowers underwater or behind on payments. The incentive structure is often tilted against principal reductions and modifications and toward foreclosures, where the servicer gets paid first in the sale. Servicers don’t have bank charters so are exempt from some regulations.

Ocwen has been buying billions of dollars worth of servicing contracts in the past year and now sits at more than 30 percent market share.

Luce first tried to get a modification in 2009. He said he was told he wasn’t eligible for the Home Affordable Modification Program because he wasn’t delinquent. The program requires borrowers to either be behind on their mortgage or in danger of falling behind.

He stopped making payments and fell into foreclosure. He eventually received a modification from about $4,200 per month to $2,649 per month. But Luce, 64, still was worried about being able to afford the payments into his and his wife’s eventual retirement, and the payment was set to jump another $600 in 2014.

As mortgage rates continued to stay low, he decided to see if he could further lower his payments and tried for another modification in late 2012. “I wanted to get it under $2,000,” Luce said.

He again fell into foreclosure but eventually was offered trial payments of about $2,500. He paid the trial payments for April, May and June. At the end of June, an Ocwen representative told Luce his permanent modification would be more than $4,000 per month.

Consumer complaints

The Consumer Financial Protection Bureau has a database of complaint data on its website.

While foreclosures nationwide are on the wane, the number of complaints handled by the Consumer Financial Protection Bureau, which was established with the Dodd-Frank Act, shows no signs of abatement.

In Colorado, the Division of Real Estate’s Board of Mortgage Loan Originators can initiate a review or complaint against a licensed originator, according to Division Director Marcia Waters, but servicers are outside its purview.

Complaints about loan modification, collection and foreclosure account for more than 30 percent of the total for the Consumer Financial Protection Bureau, which first started by focusing on credit card complaints.

From July 21, 2011, to June 30, 2013, the agency has handled 85,200 complaints about mortgages. A report from the organization states that consumers often are confused about the process for modifications, why documents they submit expire and whether payment trial periods will lead to permanent modifications.

“The median amount of monetary relief reported was approximately $435 for the approximately 2,200 mortgage complaints where companies reported relief,” the report states.

Without the relief he was hoping for, Luce is considering a short sale, an idea he’d been toying with for some time hoping it wouldn’t come to that.

“That is product of 43 years of me and my wife working,” he said about the home he meticulously planned, modeled and saw in his mind’s eye.

And with that, Luce contemplates continuing his decade long battle to finish his dream house.

“You don’t roll over,” he said he learned from his mother. “I’m not ready to give up the fight yet.”

To reach Michael Schrantz, call 970-871-4206 or email mschrantz@SteamboatToday.com

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