HOUSTON --Whether through misunderstandings, sloppiness, or alleged acts of incompetence, some mortgage lenders have left struggling homeowners in the Houston area feeling like they were tricked into foreclosure.

Case in point: Ray Coleman Jr., a homeowner who is fighting to save his Missouri City home.

I felt like they were really being extremely shady, said Coleman as he sat in the front yard of his one-story home, whichwas built in the 1970s. Neat-as-a-pin properties valued in the mid-$100,000s surrounded his home in the cul-de-sac.

It s a wonderful place to bring up a family. And now you want to disrupt all of that, said Coleman of the foreclosure mess he faced.

In March, he lost his IT management job at BMC Software. But with unemployment benefits and his wife s income from her job as a counselor, he said he figured they could keep paying the mortgage if he could get a reduction in his payment amount.

Coleman said he called his lender, CitiMortgage, and asked to apply for the Federal Making Home Affordable program.

First, they said you got to be at least 30 to 90 days behind, Coleman said.

Coleman said the company s advice was to get behind on the mortgage.

If true, that seems to violate the intent of one part of the government s guidelines issued over a year ago. In one, dated March 4, 2009, the Treasury Department even offers lenders a $1,500 One-Time Bonus Incentive to modify loans while a borrower is still current on mortgage payments (Click here to read the guidelines).

It was like you were being penalized for being good, said Coleman.

When Coleman did fall behind in his payments, he said he then applied for help, but something didn t seem right. He said CitiMortgage kept asking for the same paperwork over and over.

Coleman showed the 11 News I-Team what looked like form letters from CitiMortgage. Dear Mortgager starts one, and it ends, Sincerely, Foreclosure Department.

But then, just out of the clear-blue sky, I get a letter from them telling me they re foreclosing on me Sept. 7, said Coleman.

He said he was shocked because he believed he qualified for a loan modification and wonders if CitiMortgage ever really reviewed the documents he said he sent them.

Coleman decided to fight back and first contacted Mediation Centers of America in the Galleria area.

Banks string them along so they won t go to an attorney, said the Terry Parks, with Mediation Centers of America. His advice to Coleman was, in fact, to get a lawyer.

So Coleman hired Keval Patel in Sugar Land.

They can sufficiently afford their home, said Patel of clients like Coleman, who he contends are not deadbeats, but rather were foreclosed on for no good reason.

A lot of banks have been telling people you don t need to hire a third party, you don t need an attorney, you don t need anyone else so people attempt to do it on their own. However, at the end of the day, they lose their house, said Patel.

The problems with how lenders were processing foreclosures have been reported nationwide and apparently, for months.

One Treasury Department Directive dated March 24, 2010, and reviewed by the 11 News I-Team issued new rules for lenders -- encouraging better communication with homeowners --and warned against foreclosing before a thorough evaluation.

And now, Texas is among states launching investigations into how lenders have been processing foreclosures: are lenders following the rules or foreclosing on homeowners without justification?

I wouldn't blame the banking industry as a whole, said Latha Ramchand , a former banker who now teaches at the University of Houston s Bauer College of Business.

It s almost like before the crisis you had people signing off on loans they should not have signed off on. And now they're signing off on foreclosures they shouldn't be signing off on, said Ramchand.

The 11 News I-Team left a message with parent company Citigroup, but didn t get a response about Coleman's problems.

The New York Times reported last week that Citigroup was among banks that outsourced some of their foreclosure processing to companies the paper said employed frazzled workers who sometimes tossed the paperwork into the garbage. (Click here to read the article.)

The Times said Citigroup isn t outsourcing now and has hired more workers of its own.

Coleman said he is hoping a lawsuit will allow him to keep his house.

More information:

Find foreclosures in your neighborhood:

Read what Citigroup says:

Get details on getting help through the Federal Home Affordable Program:

Read or Share this story: