John Beale, Post-Gazette Tabitha Gregory, 23, is frustrated by her inability to resolve the threatened foreclosure of her McKeesport home. Click photo for larger image.

A late check or a knock on the door are maybe all it takes to put your house in jeopardy.

Tabitha Gregory and Rob Welch were expecting a child in the early fall of 2000 when they bought their first home on a quiet McKeesport street.

The property had belonged to Welch's father, and there was an outstanding tax debt of $1,549.82 owed to the McKeesport Area School District. The couple sent a check for $1,600.05 to the company that acted as their closing agent to forward payment to Portnoff Law Associates, a Wynnewood, Pa., collection firm.

But the settlement agency delayed sending the check, and by the time it was received, Portnoff had added a $150 fee to the bill. Now, instead of being free and clear homeowners, Gregory and Welch still owed $99.77.

	Click photo for larger image. GREGORY, WELCH HOME Problem: McKeesport home under threat of foreclosure initially through error made by closing company, now for nonpayment of school district taxes. Status: Trying to work out payment plan to save home. Quote: "I feel like I'm never going to get it paid off."

Had they paid it then, or forced the settlement agency to pay it, their problems would be over. But they didn't do the former and a two-year statute of limitations prevents them from doing the latter.

Four years later, the couple owes Portnoff more than $1,700. The original $99.77 bill rose as high as $1,089.04 this January before the couple managed a $500 payment.

But in 2001 they were hit with an additional bill: They hadn't paid their 2001 McKeesport Area School District taxes of $705.74. Portnoff represents 40 Pennsylvania municipalities and about 18 school districts, and it combined the two bills into one for accounting purposes.

"Portnoff was saying it was [the settlement agency's] fault and they were saying it was Portnoff's fault," said Gregory, 23. "And we're stuck in the middle."

Until last month, Portnoff was requiring the couple to pay $500 a month to retire the bill, with demand letters arriving regularly. But for Gregory, a certified nurse's assistant, and her husband, a butcher, more than half of their $1,860 monthly income -- $950 -- goes to their mortgage and utilities.

The couple applied for a "hardship proposal" from Portnoff, which, if accepted, will allow them to establish a payment plan. Gregory said the experience has shown her the importance of seeking professional advice when buying a home.

	John Beale, Post-Gazette Mike Yates, with his children, Darienne and Justin, at their home in Harrisville, Butler County. Problems started when the family got a loan to build their garage. Click photo for larger image.

Kirsten and Mike Yates are perfectly happy staying in Harrisville, Butler County. And everything was fine until a knock on their door in 2000.

A man who identified himself as working for Reid A. Baker Appraisers said he could help them get a loan to build a garage next to the three-bedroom, one-bath home they'd owned for three years. He appraised their home -- the first time it had been appraised -- at $91,000, and they sat down a short time later to sign the papers.

They knew the $11,000 loan would be rolled into their mortgage and an earlier home equity loan. But at the closing, instead of having an $80,000 loan at 8 percent interest fixed over 30 years, the mortgage was at 11.5 percent with a balloon payment at the end in 2011 calling for them to pay the remaining $62,000.

"They assured us that once we got the garage built it would add value to the house and then we'd be able to refinance," said Mike Yates, 29.

But when the garage was finished, they were refused refinancing because of their high loan-to-home-value ratio.

"We were just baffled," said Kirsten Yates, 28.

	Click photo for larger image. YATES HOME Problem: Predatory loan to build garage at Harrisville, Butler County home brought threat of foreclosure. Status: Paying loan until they can refinance at a lower interest rate. Quote: "We may have been kind of naive."

They began to understand more in November 2001 when Reid A. Baker was among nine defendants named in a 13-count lawsuit filed by Pennsylvania Attorney General Mike Fisher in Commonwealth Court. It accused them of conspiring to defraud consumers by illegally obtaining home improvement contracts, financing and/or debt consolidation loans for more than 50 homeowners who otherwise would not have been considered qualified borrowers.

Around the same time, their loan was sold to another bank. Although the couple continued sending in their mortgage payments on time, in June 2002 they received a letter from the lender stating that they owed $6,000 in late charges.

The Yateses, graduates of Slippery Rock University, kept meticulous records of their transactions. They had been sending their payments by certified mail, and realized the lender was waiting as long as 35 days to cash their mortgage checks, and then charging late fees.

This January, Kirsten Yates called her husband at the large Butler County health insurance agency where he is an auditor.

"They sent us another statement," she told him. "They're going to foreclose on the house."

		Where to get help Answers and help about foreclosures

With the attorney general's suit pending, the threat of foreclosure was lifted. But the couple struggles with an $800 monthly payment for their mortgage, in addition to paying taxes and homeowner's insurance. And they realize that it will be a long time before they can take their children on a summer vacation or save money for the future.

"It's frustrating," said Mike Yates. "We trusted people. We're not necessarily that way any more."