When David Torkko agreed to a trial home-loan modification last March, he didn’t realize it would eventually lead to his paying more than $10,000 to avoid foreclosure.

During the process, he said, Bank of America representatives never made it clear that he could get kicked out of his east-side home if he was denied a modification.

“They never told me, even if I continued to make the modified payments, I could lose my house,” Torkko said.

But early in March, Torkko learned that his loan was in default and his home had been scheduled for auction. As the June sale date approached, Torkko called the Phoenix law firm that was handling the trustee sale. He learned it would take $10,162 to reinstate his account and halt the sale.

Just a few months earlier, BofA had told him it would cost less than half that to get everything current.

Bank of America recently announced it will open a customer-service center in Tucson to help financially distressed homeowners wading through the complex loan-modification process. But for Torkko, that decision comes too late.

Bank of America has already reported his mortgage as delinquent to the credit bureaus, he said.

“I have had credit card interest rates raised, credit limits reduced and automobile-insurance rates increased,” he said. “My credit rating is seriously damaged.”

When asked for comment, a BofA spokesman said in an email that Torkko’s case is currently coded as being in litigation, which prevents him from talking about it directly.

“Bank of America is committed to keeping customers in their homes whenever possible, and to pursue other foreclosure prevention solutions, such as short sales and deeds-in-lieu, when retention is not possible,” said Rick Simon, the spokesman. “Foreclosure is always the last resort.”

In previous interviews, Simon has said that BofA deals with thousands of loan modifications, and the unprecedented onslaught of foreclosures has proved a learning experience for the entire industry.

The new service centers – which should soon start opening in dozens of locations across the country – are part of the bank’s effort to streamline the process.

BofA hasn’t said when the new customer-service center will open here, but a “soft opening” should occur by the end of the month with representatives working with targeted customers, Simon said.

The center’s location also hasn’t been disclosed.

In discussions with stressed homeowners, Bank of America comes up frequently as being tough to work with.

Irma Bravo said she’s been working toward a modification with the bank for two years.

About eight months ago, BofA told her she’d been denied the modification, which would have lowered her monthly payment from about $760 to $640. With the help of an employee, she appealed that decision.

She said she’s told countless BofA workers about her financial woes.

In the meantime, the amount of money it will cost to catch up on the mortgage if she’s denied continues to grow. “I’m in limbo. I don’t what to do,” said Bravo, 68.

Torkko, a 57-year-old wine-and-spirits wholesaler, bought his home in 2005 for $230,000, paying for it with a hefty down payment and a conventional loan. His debt was later sold to Countrywide and then absorbed by Bank of America.

With his income dwindling as alcohol sales slumped, Torkko said he was late on two mortgage payments in 2009. Due to clerical errors, Torkko said, BofA placed his next two payments into his escrow account rather than his interest-and-principal account, putting him in arrears. He wasn’t aware of that, he said, until March 2010 when he received an offer to participate in the Home Affordable Modification Program.

Torkko decided to pursue the opportunity – even though it was due to a bank error – because he was struggling to make his payments and the modification payment was $243 lower than his regular payment.

At one point, he received paperwork saying he’d been denied the modification, but he appealed that decision.

Through it all, Torkko said he was assured his home wouldn’t go into foreclosure, but eventually it was scheduled for auction. Torkko said he’s filed a complaint with the Arizona Attorney General’s Office.

Under pressure to stop the sale and keep from losing his house, Torkko borrowed $10,000 from his father.

“It’s an embarrassment,” he said.

Then, toward the end of May, he received a letter from Bank of America saying he had been approved for a loan modification effective July 1, which means the foreclosure shouldn’t have taken place.

After calling Bank of America’s Home Retention Division and the Office of the President and CEO, he got two different answers about how much he owes for his monthly payments.

As for the $10,000, he said the bank told him it has to keep it, so his account stays current.

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