Bank Screw-Up, Falling Home Values, Tighter Lending Standards Leave Refi-Seeking New Jersey Couple Up The Creek

In Neptune City, New Jersey, the Asbury Park Press reports on the nightmare of homeowners Mark and Jennifer Seymour, a couple who, because of a screw up by their original lender, is now stuck with a problem:

• [M]ark Seymour manages a pool and spa company, earning about $52,000 a year. Jennifer works as a bus driver, making about $16,000 a year.

• They made enough to purchase their first home -- a three-bedroom ranch with white siding and green shutters -- in February 2006 with no money down for $200,000. They obtained a loan through National City Bancorp with a fixed interest rate of 6.75 percent, leaving them a payment of about $2,200 a month, including taxes.

• About six months later, they said, National City notified them that it had made a mistake. It forgot to include private mortgage insurance, normally required for buyers who don't put at least 20 percent down. It boosted their payments by $786 a month.

For the rest of Seymour's nightmare, see Handcuffed (Homeowners looking for flexibility from their lenders are running into barriers because of falling property values and tighter lending standards) (if link expires, try here).