Nancy Kelly-Ristau is the face of the American nightmare. She's 55, divorced and facing the fact that she can no longer afford her home in west suburban River Forest, where she lives with her two daughters.

Nancy hasn't been living beyond her means. In fact, she worked full time as a security guard, and gathered plenty of overtime at special events until she needed knee surgery last summer. Now she's subsisting on sick pay and a monthly alimony check until she can return to work.

But it's not her reduced income that's the problem. It's the fact that her monthly mortgage payment has risen so much. When Nancy first bought the home in 2001, her brother co-signed for the loan. She refinanced to get him off the loan in 2004 — and that's where her problems started.

She took out an adjustable rate mortgage with a monthly payment of $1,647.26. But in the intervening years, it has jumped to $2,077 a month — and is scheduled to rise again in January. The lower figure would be barely affordable. The current payment is simply impossible for her to manage.

There's no way out. The house has been listed for sale for months, with few showings. She contacted GMAC, her mortgage servicer, but initially got nowhere. She got trapped in voice-mail hell, and when she finally did get through, Nancy was told they couldn't help because she wasn't yet late with her payments.

It was a classic "Catch 22" — if she wasn't about to lose her home to foreclosure, they couldn't help. And if she did get behind on her payments, the servicer would start the process of restructuring her loan but couldn't guarantee that the house wouldn't be foreclosed before they got around to her case!

Nancy is a classic example of the millions of Americans who are desperately trying to keep current on payments, and keep their homes — but can't get any attention from the mortgage lenders and servicers. They'd be good risks for refinancing or adjustments — but they can't get through the system.

I listened in on a series of calls Nancy made, spending a lot of time listening to music played while they kept us on hold, and as we were transferred from department to department. Finally, my patience wore thin. I demanded a supervisor, and then that person's supervisor — explaining I was writing a story for the Chicago Sun-Times. At last we found someone to listen.

Nancy spent last week providing documentation, which was passed on to Fannie Mae — the ultimate owner of her mortgage. GMAC stayed on top of the case, and at week's end worked out a restructuring of her monthly payment, that will hopefully be approved by Fannie Mae in the next day or two. It will lower her payments to $1,600 a month, giving Nancy and her daughters breathing room to make some decisions about their future.

Now, wasn't that sensible? One less house in foreclosure, one less family in distress. And all it took was a major media onslaught! Late in the week, the GMAC corporate office finally responded to my pleadings for some insight into the process. Here is a direct quote from their response:

"Terry, my apologies, but our corporate policy prohibits phone calls with both the media and the customer present. As the spokeswoman for our mortgage division [ResCap], I can speak to the media.

"However, since I do not have access to customer records, and because of state and federal privacy concerns, I do not comment on specific details of customer cases. The service group can speak to customers but cannot speak to the media. In short, I'm not able to comment beyond the statement that I gave you below."

In case you're wondering, that original statement said:

"ResCap strongly supports the preservation of homeownership and has a robust servicing structure in place to evaluate and explain modification and payment alternatives with the customer. . . . The challenge that servicers face, particularly in this difficult economic climate, is reaching a solution that meets the needs of the customer while working within the underwriting standards of the investors who hold the mortgage loans that we service."

Bottom line: The government and the political candidates can announce all the grandiose mortgage restructuring plans they can dream up. But in real life, it's almost impossible for people caught in this trap to get out. Those mortgages aren't sitting in the bank's vault. They've been packaged, and sold, and some have even been sliced into pieces. Getting all those owners of the mortgage to agree to restructure the loan is more difficult than it was getting Congress to agree on a bailout plan. Only this delay will be even more costly to our finances, and our society.

Terry Savage is a registered investment adviser and is on the board of the Chicago Mercantile Exchange. She appears weekly on WMAQ-Channel 5's 4:30 p.m. newscast, and can be reached at www.terrysavage.com. Her new book, "The Savage Number: How Much Money Do You Make?" has just been published. To find out more about Terry Savage and read her past columns, visit the Creators Syndicate Web page at www.creators.com.

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