The house that belongs to Meghan and Brett Oathout — built by the husband, and for the past year and a half, a payment away from foreclosure — is situated on a sparsely populated road running parallel to Route 3 in Liberty, connected to the highway by a perpendicular road at either end. On a map the road has the appearance of a railroad siding or a business access road, connected intimately with the primary route, but despite being a stone’s throw from cars rushing between Belfast and Augusta, the feeling at the Oathouts’ home is one of being far from civilization.

This was intentional. Brett Oathout, the more openly idealistic of the two, recounted his early desire to homestead. He wanted to build a solar home with a composting toilet, but no bank would finance the renovations, which were seen as problematic for the resale value of the home. Given a choice, he wouldn’t have gone to a bank at all, but as he puts it, he fell for the American Dream, and the equation of home ownership with independence.

The home that he built, a modest cube with wood siding and small windows, has electricity from the grid and a traditional septic system. But in other ways the Oathouts have managed to live a kind of pre-technological existence.

He cuts wood from the property to fuel a wood stove that heats the home. The hearth he recently built is of fieldstone from the property. The Oathouts have no computer or Internet access. Their only means of telecommunication, a single cell phone, has been used extensively over the past 18 months to communicate with a Littleton, Colo.-based mortgage servicing company called Aurora Loan Services that has been holding their mortgage in default for — as far as the Oathouts can tell — no apparent reason.

There was a reason in the beginning. Both husband and wife brought two children from previous marriages and in July 2008, they had a fifth child, a baby boy, together. Meghan Oathout stays home with the children, home-schooling the older ones, a decision that was in part ideological, but also financial. Brett Oathout, a self-employed contractor, was hit hard by the beginning of the recession. In the months prior to the birth of their youngest child, the Oathouts began to fall behind on their mortgage payments. At the time of his birth, they were three months behind and the house was in pre-foreclosure.

According to the Oathouts, Aurora Loan Services told them that, in order to save their home, they would need to sign up for a repayment plan, spreading the past-due amount over the course of a year. Instead of $671 per month, they would pay $807. The Oathouts signed up and made the payments on time for 12 months. During that period, their regular statements from ALS, sent by certified mail, did not reflect the payment plan, but they were told to ignore the statements. “You’ve got to believe them, I guess,” Brett Oathout said. “You have no other choice.”

In response to a request for comment, an ALS spokeswoman e-mailed this statement to VillageSoup: “Aurora Loan Services provides a broad array of workout options for delinquent borrowers and current borrowers who are in risk of default. It is our strong desire to help borrowers avoid delinquency and prevent foreclosure.”

In July 2009, believing they had completed the payment plan, Meghan Oathout called ALS and was told that the mortgage was still in default. Why? As she recounts it, the agent said Oathout had an adjustable-rate mortgage. Oathout checked her papers and found that the mortgage was a fixed rate. In response, the agent claimed not to know why the mortgage was in default, only that it was.

ALS told Oathout she and her husband were $991 in arrears. To make up the deficit, she was told she would have to sign up for another payment plan, this one lasting nine months, at a rate of $802 per month. If she wanted to know why the mortgage was in default, she was told, she would have to speak with a manager.

Recalling the moment, Brett Oathout grew visibly agitated. “Do you know what it’s like to have your livelihood threatened for year,” he said, “and then be like, ‘Yeah, we’re done! Oh, no we’re not. It’s just getting worse.'”

Over the next six months, speaking to a manager proved nearly impossible. The Oathouts said ALS agents routinely made excuses. Sometimes the managers were in meetings. Other times, the Oathouts would be put on hold, believing they were being transferred to a manager, only to have another customer service agent pick up the phone. On several occasions, the customer service agents claimed to have no direct contact with management. Sometimes the agents were hostile. On several occasions, they hung up on the Oathouts.

Some of these calls are documented in a spiral notebook kept by the Oathouts. Each entry contains the agent’s name and identification number — for example, Rashi 66A or Leonard Z76, Brandon J13 or Jeanine Z73 — and a brief abstract of the conversation.

Meghan Oathout recalled a conversation with Chris PLU12, who described himself as “top” around Aurora Loan Services. Oathout was skeptical. “I said [to him], ‘Probably everyone there is around the top,'” she said. Then, reflecting on the phone call, she said, “He did put me through to a manager, though. So, I have to say, he’s not all bad. He’s the only one who did.”

Even though he was the top?

“He was the top,” she said. “So apparently he put us through to someone who was more top.”

That was on Jan. 15. Prior to the call, Oathout had cataloged nearly six months worth of failed attempts to speak with a manager. On one occasion, she said, a customer service representative told her that he could see the manager’s desk and the manager was not there. The statement blew Oathout’s mind. “For six months they told us they didn’t have direct contact with a manager and all this time you could see his desk from where you’re sitting?” she said.

The Oathouts called ALS headquarters in Littleton, Colo., but couldn’t get a manager on the phone. They contacted Fannie Mae — the mortgage holder — in the belief that the now-federally-controlled company should know how their loan was being serviced. A Fannie Mae representative told Meghan Oathout to be persistent with ALS, which, she said, she did once more with no better results.

The Better Business Bureau, which currently gives Aurora Loan Services an A rating, contacted ALS on the Oathouts’ behalf and returned with the question: would you settle for ALS reviewing your file? The Oathouts said they wouldn’t. A representative of the Better Business Bureau’s Denver office corroborated the A rating and said that most of the complaints against ALS had been resolved.

At various times, Oathout said she has contacted various state and federal agencies, including the Maine Attorney General’s Office, the Bureau of Financial Institutions, the Bureau of Consumer Credit Protection and the Office of the Comptroller of the Currency. When she contacted Pine Tree Legal Assistance, a nonprofit legal service for low-income Mainers, she was told it would be three months before someone could look at her case.

Aides at Sen. Susan Collins’ and Congressman Michael Michaud’s offices suggested government loan assistance programs, like the Home Affordable Modification Program, but the Oathouts didn’t want a program. They wanted advocacy.

“If you have money in the bank and [the bank] keeps stealing your money, and you tell someone and they say, ‘I’m so sorry. Why don’t you apply for food stamps so you can buy food?’ … It’s like, wrong,” Meghan Oathout said. Oathout later clarified that, to her knowledge, all of the money she has paid to ALS has gone toward repayment of the debt. At issue was an alleged $991 deficit that kept the family in default, a figure that appeared to be unrelated to any dollar amounts they had dealt with to date. Worse, four months into the second payment plan, the number remained the same.

But why would the account remain in default, or further, why would the servicer risk losing a client to foreclosure? The standard wisdom in the mortgage industry is that no one benefits from a foreclosure, but according to an October 2009 report from the National Consumer Law Center, loan servicers do not generally lose money and may even make money on foreclosures. A section devoted to loan servicers’ income sources states, “Fees that servicers charge borrowers in default reward servicers for getting and keeping a borrower in default.” Likewise, if the home is foreclosed upon, the report says, the servicer is the first to be compensated.

“The increase in defaults is unlike other businesses that would be concerned about that,” said John Rao, an attorney with NCLC. “It actually means more revenue for them.”

In the servicers’ defense, Rao said, complying with the Home Affordable Modifiation Program has required more underwriting than the companies would normally do, potentially taking staff from the companies’ compliance departments. But he said he doubts the loan servicers are suffering financially. How much certain practices contribute to the companies’ bottom lines is less clear, he said. “The whole area just calls out for more research and empirical studies about what’s going on,” he said. “I think we’re going to see that in the next couple years.”

Rao said the best route for a homeowner is to send a qualified written request to the company in accordance with the Real Estate Settlement Procedures Act, overseen by the U.S. Department of Housing and Urban Development.

RESPA is one of a number of regulations that Joy Schmidt, a San Francisco area resident, is banking on in a class action lawsuit she intends to bring against ALS. The Truth in Lending Act is another. Schmidt’s case differs from the Oathouts’ in that she was not behind on her payments and wouldn’t have been, had ALS not, according to her, recommended it.

Facing an adjustable rate mortgage that was set to adjust, Schmidt said she requested a loan modification from ALS and was told that she wouldn’t qualify unless she was three months behind on her payments. “They tell you to go late, and on Day 91 they put you on notice of default,” she said.

Schmidt said she hadn’t missed a payment in the four years that she had owned her home and wouldn’t have had she not been advised to do so by ALS. The ensuing default forced her into what she describes as a “vicious cycle” of miscalculated payment plans, financials lost in the mail and late fees that ended in her taking a $5,400 “cash for keys” deal from a realtor to vacate her $400,000 home. During the process, she claims to have spoken with 186 different people at ALS. “Each one tells you your payments are going to be different,” she said.

Schmidt, who is now living with her sister, said a Web site she set up,, has attracted 40 people with “nearly identical stories” to hers, who are willing to be a part of a class action suit. Schmidt said she has three lawyers interested in the case.

The Oathouts can’t afford a lawyer and have been unable to find one willing to take their case pro bono. Well-wishers have told them that if the case went to court, ALS wouldn’t have a leg to stand on. “But who wants it to get that far,” said Meghan Oathout.

The day before this article was printed, Meghan Oathout said she got a call from an ALS manager named Brian Cleary. She had spoken with Cleary two weeks earlier, and though he had promised to call her back, she doubted he would, and so had been calling him every day. According to Oathout, Cleary told her the account was in default because ALS miscalculated the previous repayment plan. Oathout was surprised by the admission of error. The advice from Cleary surprised her more. The Oathouts, he said, would have to enroll in a six-month payment plan, this one at $830 per month.

“I didn’t say I would do it or I wouldn’t,” she said.