On Scams, Mortgage Modification, and the Beauty of Bartering

Since being laid off eight months ago, Deanna Steuernagel and Shawn Burke have become most disillusioned by the frequency with which they've encountered various scams specifically targeting the unemployed. Unscrupulous greed clearly holds no sympathy for the downtrodden. Considering the months of delay tactics Chase Bank has employed on Deanna's loan modification application, forestalling a decision until she completely depleted her savings, it would not surprise her to receive notice that she doesn't qualify for Obama's Hope Now program because this month she finally defaulted on her mortgage.

The smell of freshly baked cookies envelops me when Deanna opens the front door of Shawn's modest rental house. Her three kids are spending the night with friends; Shawn's son and roommate (the first the 48-year-old has had since college) are both out of town for the weekend. Taking advantage of an empty house, the couple has planned an evening of low-budget recession recreation--oatmeal raisin cookies and Rummy 500 with two former colleagues. Their friends avoided the axe Nol-Tec Systems brought down in February, so they'll be bringing the beer.

Shawn and Deanna met and started dating at Nol-Tec, where she worked at reception and he was a kind of Shawn-of-all-trades, building and installing the conveyance systems Nol-Tec produces, while also occasionally performing functions of an in-house handyman, resident computer expert, and whatever other tasks demanded.

Since being laid off in a 10 percent reduction of staff, the couple has continued working together in a different sense. Together, they've figured out how to get by despite bleak circumstances--applying for unemployment and researching other forms of available assistance, supporting and encouraging each other in their relentless pursuit of new work, warning each other of scams, cultivating a garden, and becoming masters in the art of bartering.

Over warm oatmeal raisin cookies, Shawn expresses some strong feelings about U.S. government actions in recent years, most particularly in bailing out mega-banks whose methods of operation helped spark the economic crisis, while leaving little guys to bail themselves out. The fact that Deanna has lost hope that Obama's Hope Now program will help save her home from foreclosure fits perfectly into Shawn's view that the banking system screws hard-working individuals for the success of rich executives.

Back in May, Deanna completed and submitted the full packet of paperwork Chase requires from customers applying for mortgage modification. The four times she has called Chase to check on its progress, an agent has informed her that the underwriting department has yet to receive her application because the packet lacks one detail or another. In no instance has Chase sent her a notification requesting further documentation.

When Deanna called last week, again a Chase representative informed her they couldn't forward her application to underwriting because it still lacked two apparently critical details they'd failed to notice sooner. First, though a tax preparer had dated her W-2 when he submitted it to the IRS, Chase could not accept the documentation because the date line next to Deanna's own signature remained blank. Second, Chase required she submit a new statement of her 401K balance, since any increase resulting from slow stock market recovery during the nearly six months they've had her application could affect the decision-making process.

Deanna figures Chase has been fishing for grounds to reject her, but knows they won't find it in her 401K. Since submitting her original application to Chase in May, she has had to cash out the greatly diminished 401K so she could keep up with her monthly mortgage payments. Now that little nest egg has been spent: "I don't have my mortgage payment this month. What am I going to do?"

"Every time I call Chase, I get a different story. I told them I didn't have money to make my October mortgage payment. They said not to worry about foreclosure because I'm already in the system. Do I trust that? No," Deanna says.

"That's the way the system works," Shawn adds. "Like insurance claims: they just delay and delay and delay, trying to wear you out so you just give up. The banks are either looking to delay so long for her situation to change so they can reject her, or to wear her out so they can take her house."

On average, Deanna sends out a dozen resumes every day, mostly for secretarial-type employment, though really for anything remotely relevant to her professional experience. Writing this, it just now occurred to me that it's probably best if her hunt for work continues to fail so miserably, since a new job could make her instantly ineligible for mortgage modification, though a new paycheck wouldn't catch her up in time to prevent foreclosure. Hello rock, meet hard place.

Though it's entirely possible the unnecessary hassle results from Chase's bureaucratic ineptitude, I can understand their suspicion that untoward motivation underlies deliberate stalling, particularly given the frequency with which they've stumbled across obvious scams or other questionable activities targeting those hardest hit by the recession.

Any advertisement that mentions "recession-proof opportunity" or "make money from home": "Scam," they tell me, nearly in unison. Those are the obvious ones.

On the more insidious side, Deanna has submitted resumes in response to various job ads on Craigslist, which have resulted in emails telling her she looks very qualified for the available position.  As part of the advance screening process, however, the email instructs her to file for a credit report through a service the company recommends, for which they helpfully provide a website link. Deanna has never pursued one of those "opportunities," recognizing they're either scamming her for the fee they charge for a credit report or, worse, attempting to acquire her Social Security number for an even bigger take.

Shawn gets worked up by a list of job websites the local unemployment office gave him. "Not one of those websites was worth a damn," he says.  "And these are the services the government was recommending I use to look for a job." Each one would take him through pages of inputting personal information and uploading his resume, only at the end of this laborious process making it clear the "service" requires a fee to post the listing. "You gotta pay to find a job," he says with disgust. "I don't have a job; I can't pay."

"And some of them include a personality test," Deanna adds, explaining how some websites ask a host of questions about interests and pursuits completely unrelated to the job itself. They're essentially marketing surveys used to categorize respondents' personal information.

"And now we're inundated with phone calls," Shawn says. "They have all your information and then they sell your information for money."

"Somebody's making money off us being unemployed. And wasting our time too," Deanna adds. "Under the circumstances, trying to be positive is hard."

The one positive consequence of being persistently broke has been their collective revelation about bartering. For a time this summer, healthier eating habits became an unanticipated benefit of unemployment. The green beans they planted in Shawn's yard grew to almost overwhelming proliferation. With watermelon, squash, and an endless supply of green beans, they traded neighbors for homegrown tomatoes, cucumbers, and corn.

Their foray into a more serious level of bartering came through postings on Craigslist.com. The site recently reported that barter listings on their site have increased by 80 percent over the past year, so Shawn and Deanna represent just two in a much larger recession trend.

In the late summer heat, Shawn and Deanna sweated and strained for days, working to clear underbrush and small trees from a plot of land in Minnetonka. In exchange, the dentist who owns the property performed some much-needed dental work on Shawn, Deanna, and Shawn's eponymous son "Junior." Shawn estimates the dentist's bill would have run in the thousands, since none of them have health insurance at this point. Likewise, it probably would have cost the dentist thousands to hire professionals to clear her land.

"Bartering is the new income," Shawn tells me. "I'm going to do it for the rest of my life." His current bartering appeal seeks a mechanic to fix a faulty sensor on his truck, in exchange for computer work. He takes particular pleasure in the way bartering for goods or services moves a transaction beyond the realm of government taxation. "The more people that barter, the more tax revenue the government loses," Shawn points out. "And Uncle Sam can kiss my ass," he concludes.