Three months after they went on record to decry the confusing and possibly deceptive billing practices of their mortgage servicing company, Meghan Oathout of Liberty said she and her husband, Brett, felt no more certain about the fate of their home. They also feel much less willing to fight.

The Oathouts’ troubles started simply enough. In the spring of 2008, they fell three months behind on their mortgage payments. Brett Oathout’s one-man construction business was taking a hit as the recession took hold, and the couple had incurred expenses leading up to the birth of their youngest child, now almost 2 years old.

But the break in their cash flow was short-lived, and checkbook in hand, they contacted their mortgage servicer, a Littleton, Colo.-based company called Aurora Loan Services, signed up for a 12-month repayment plan, and by their own account, made all of the subsequent payments on time.

It was not an easy year, but as their youngest son’s birth came to represent a dark time for the Oathouts, his first birthday, which was to coincide with the end of the repayment schedule, shone like the light at the end of the tunnel. Upon making the last of the increased payments, Meghan Oathout called ALS to verify that her payments would return to the previous rate of $671 per month. Instead, she was told that the loan was still in default.

To remedy the problem, Oathout recalls, the ALS representative said the couple would need to sign up for another repayment plan at a monthly rate that fell somewhere between the increased payment they’d endured for the past year and their original payment. They were perplexed, but agreed to the new plan, resolving, on the advice of the representative on the phone, to talk to a manager from the company and sort out what they believed to be a misunderstanding.

Talking to a manager, by their account, proved nearly impossible. After a number of conversations with customer service representatives who were by turns evasive and hostile, the Oathouts began logging their calls in a spiral notebook, filling the pages with names and identification numbers of dozens of different customer service representatives, each accompanied by notes on the conversation.

The Oathouts alleged that ALS representatives repeatedly deflected their attempts to speak with a manager, claiming that none were present or available at the time they called. On one occasion Meghan Oathout recalled, the representative on the phone agreed to connect her with a manager only to transfer her to a different representative somewhere else along the bottom of the chain of command. She called Aurora’s administrative offices in Littleton, Colo., to no avail.

Deborah Munies, an Aurora spokeswoman, declined to comment for this article, citing confidentiality between the company and its customers. She deferred to the statement made by the company in February on the occasion of the first article VillageSoup published about the Oathouts:

“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.”

Munies also offered to have a representative of the company contact the Oathouts.

Over the next six months, the couple contacted the offices of their state and federal representatives, numerous state agencies and legal assistance programs. Meghan Oathout said she was often steered toward loan modification programs like the federal Home Affordable Modification Plan. But unlike the many Americans who refinanced one too many times or got caught on the wrong side of an adjustable-rate mortgage, the Oathouts were not looking for financial assistance. They wanted to report a fraud, and they wanted someone to intervene.

In other ways, the Oathouts’ dilemma has some common threads with the folklore of the national housing market collapse. To date, nearly every company affiliated in some way with the loan has changed ownership, or gone out of business, with the notable exception of ALS.

The original mortgage was drawn up by Union Trust, now a division of Camden National Bank. The subsequent refinancing of the home was done through a company called First Magnus that stopped selling mortgages in late 2007 and has since been on both sides of court cases involving allegations of fraud. Meghan Oathout said she believed the local mortgage broker who arranged the refinance was no longer in business.

ALS’s parent company, Lehman Brothers, went bankrupt in September 2008.

Conversations with ALS representatives at various times led Oathout to believe that the company did not have the original terms of the loan in its possession. On several occasions, she said, customer service agents speculated that the discrepancies in the amounts due from month to month could be because the mortgage was an adjustable-rate mortgage. Hers is a fixed-rate mortgage, she said, surprised that the servicer didn’t have that information at hand.

Oathout said she had entertained, cautiously, the possibility that she might be the only one who had a record of the original terms, though she was not banking on it.

In November, Oathout said she called ALS requesting to make a payment one week late. Brett was expecting a check from an out-of-state client that hadn’t arrived. The representative said something about the holiday season and offered that Oathout could pay $704 instead of the full amount. Oathout explained that she could pay the full amount, but would need an extra week this month, to which the representative responded that Aurora wouldn’t accept the full amount. She would need to pay the $704, which the representative explained would be the payment amount each month going forward.

Oathout was doubtful, but she paid the $704 for two consecutive months, during which time she was able to speak with a manager, who told her that she should have been paying the full amount. Oathout was incredulous.

“If we’d gone one more month, they could have put us under foreclosure again,” she said. “I wonder, are their employees really poorly trained and uninformed, or do they want you to go into foreclosure?”

According to Joy Schmidt, a resident of the San Francisco Bay Area, Aurora wants its customers to go into foreclosure. Schmidt claimed that she lost her home because Aurora provided misleading information that led Schmidt to voluntarily default on her loan. Aurora then capitalized on the default and seized the home.

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 described as a “vicious cycle” of miscalculated payment plans, financial paperwork 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 said, she spoke with 186 different people at ALS. “Each one tells you your payments are going to be different,” she said.

When VillageSoup first spoke with Schmidt in January, her Web site,, had attracted 40 people with “nearly identical stories” to hers who were willing to be part of a class action lawsuit against Aurora. In an e-mail dated April 25, Schmidt claimed to have 200 to 300 people invested in taking Aurora down.

Schmidt reiterated the sequence of events that she and others believe is a systematic attempt to defraud customers. “This is going on around the nation,” she said, “Lawyers tell us it is too big a beast to fight. … We are now the beast that won’t remain quiet.”

Oathout said that though her case was different in that she did not voluntarily fall behind on payments, some of Schmidt’s claims rang a bell. “I remember reading that and thinking, Oh my God, we’re on the same track she is,” she said.

Anecdotal information on ALS ranges from bile-spewing tirades against the company appearing on mortgage fraud message boards to benign recognition in the form of bland informational write-ups in business publications. News stories linking the company to a range of ethically questionable practices have not been uncommon over the past two years. Aurora has been openly criticized in articles appearing in the New York Times and the Village Voice, and in the Huffington Post, an online-only publication.

On the other hand, the Better Business Bureau gives the company an A rating, a calculation that factors in the number of complaints filed against the company and whether these have been resolved, among other things.

On May 3, Oathout pulled a thick stack of letters from a drawer and spread them out on her kitchen table. All but one was from ALS. The odd letter was from U.S. Rep. Michael Michaud’s office and contained, according to Oathout, information that she had before she contacted the representative — information, she said, with evident frustration, that she informed the congressman’s staff member she had, only to get it again in the mail some weeks later.

Of the remainder of the papers on the kitchen table, several were statements, but most were collection notices in one form or another. In December Oathout had agreed to a new repayment plan at a rate of $772 per month — a figure that would include $100 per month toward the default amount, which Aurora claimed was just over $1,400 — but despite having made all the subsequent payments on time, the threatening letters kept coming, often by certified mail, typically at a rate of four per month.

“I feel like they could save a lot of money if they didn’t send out so much crap all the time,” she said dryly.

To “cure” the condition of their defaulted mortgage, a common introduction to these letters read, the Oathouts would have to pay the amount of money by which the account was in default.

According to letters dated April 14 and 15, this amount was $1314.80. A letter dated April 19 said they were in default by $711.70. Two days later the default amount was $542.80. The difference between the first and last of these letters was equal to the amount of their payment, Oathout said it wouldn’t make sense to apply an entire payment to the default amount.

That fact aside, the middle amount, $771.70, didn’t appear to have rhyme or reason and Oathout said she had seen higher and lower numbers in past months, apparently having little connection with the payments of $772 they were making each month, or the $100 per month that was supposed to be paying down the default amount.

“After three or four months of payments, it should be less,” she said, “but it’s more, or a whole lot less. It doesn’t make any sense to me.”

Lately, Oathout has stopped calling ALS because, she said, the phone bills had grown too large to continue. Each month she sends a payment by Western Union and waits for the other shoe to drop, if there is another shoe. “Sometimes I worry that they’re going to just say they didn’t get it,” she said.

Asked what her next move would be, she shrugged, and in a moment her eyes were rimmed with tears. There wasn’t a next move.

“At some point a check’s not going to come on time,” she said, “and they’re going to say, ‘OK, that’s the end of it.'”

If Aurora’s records ever indicate that the Oathouts are caught up on their mortgage payments, Meghan Oathout said, the couple would then be able to catch up on a long-overdue electric bill.

“We’re on a repayment plan with them,” she said. “But it’s different.”