Wells Fargo Bank has written off a $310,000 loan and turned over to Veterans Helping Veterans the title to a makeshift Payson homeless shelter for 20 or 30 people, many of them veterans.
The bank’s decision will avert the shut down of the home on Wade Lane in Payson.
Retired Col. Misty Isley turned her home into a refuge, especially for veterans. A shifting group of 20 or 30 people live in the sprawling, ramshackle home.
Although Veterans Helping Veterans has no official relationship with the Veterans Administration, Isley has worked doggedly for years to help veterans down on their luck, sometimes ferrying them to Prescott for services.
“They turned it back over,” said Isley, a retired Army colonel now in her 80s who has devoted her life to helping fellow veterans. “Now all we have to do is figure out how to pay the utility bills.”
The bank had initially moved to seize the property and evict the residents, but paused in mid-eviction when bank officials discovered they were dealing with what amounts to a homeless shelter.
Plagued by bills and the cost of providing for so many struggling people, Isley had refinanced the property right before the housing crash. She fell behind the mortgage payment, when she chose to pay the $2,500 monthly utility bills instead of the mortgage. She said she tried to pay the bulk of the overdue amount, but the bank rejected her check because it was for the wrong amount.
Residents then organized a lobbying campaign to stave off the eviction, triggering stories in the Roundup and inquiries from First District Congresswoman Ann Kirkpatrick. The public furor prompted the bank to restudy the situation, said Tyler Smith, a supervisor for Real Estate Owned, which handles the disposition of properties the bank has taken back for non-payment of the mortgage.
“This was obviously a unique case. With everything that had happened with the property, we thought it was our best course of action,” said Smith.
The bank will renegotiate mortgage terms, but very rarely writes off the whole loan and turns the property over to the owner, noted Smith.
The bank appraised the property and found that with the collapsed real estate market it was worth much less than the $310,000 loan.
“She was definitely upside down in the mortgage,” said Smith.
Moreover the size and condition of the house would have made it almost impossible to sell any time soon in the current Payson market, he said. The need to relocate the many residents would have presented additional expenses and problems.
“We just realized it wasn’t going to be worth displacing all these veterans and trying to sell the property.”