Foreclosure Legal Defense: When Homeowners Say, "Sorry, This is America. We Have Rights. Prove It!
Billy Gardiner is fighting foreclosure in a way that his adversary, Fannie Mae, fears the most.
He’s talking to lawyers. In the photo, he consults with an attorney, Andrea Park, of the Legal Assistance Corporation of Central Massachusetts at a meeting of the Worcester Anti-Foreclosure Team.
Ms.Park told him that he should feel free to consult with her by phone and e-mail. The LACCM provides free civil legal services to elderly and low-income residents of Central Massachusetts. "If I were getting a bill, I couldn't do it," Billy said. "I would be on my own."
Of the 11 people at the meeting, four were attorneys. Also present was Grace Ross, a longtime community activist and candidate for governor in 2006. The others were homeowners in various stages of foreclosure and eviction.
One of them, Marty Grogoza, arrived smiling. Acting with the legal advice of WAFT, he had won a round in his fight against a bank’s attempt to auction his home. As the first order of business, the group gave Marty a hand.
What had happened was remarkable. Marty thought he had a deal with his bank: If he could find a buyer, then the bank would put off a planned auction. Even though he found a buyer at a price covering the mortgage and legal fees, a win-win for both him and the bank, the bank decided to go ahead with the auction anyway.
Marty discovered this the day before the auction.
On the day of the auction, a bank representative, an auctioneer, and investors gathered at Marty’s home expecting a business-as-usual sale. They got a big surprise. With speedy help from WAFT, Marty had gotten a last-minute court injunction against the auction.
On hand to support Marty were WAFT members and other community residents. After making cell phone calls to verify the validity of the injunction, the disappointed would-be auction participants, got in their cars and drove away. Marty and his supporters whooped it up and here is a photo of that happy scene. The Grogozas are the couple at front left in the group photo below.
After applauding their victory, the WAFT meeting quickly got down to business. And it was business-like. This was no meeting of radicals ranting about the injustice of it all. No one went on about the heartlessness and greed of banks. Indeed, there was none of that.
Instead, this meeting was all about the law, the rights of homeowners, and legal strategies. When Billy asked about bankruptcy as an option, one of the lawyers gave him and the group a lengthy discourse on the pros and cons of chapters 7 and 13. When the photo above was taken, two of the attorneys had left. They had to go and make a living.
These are community activists talking legal procedures and rights in the same calm, measured, informed tones used by richly-paid attorneys for mega banks. Judging from this meeting, the end game in foreclosures today is a contest over what is legal and what is not.
Major banks such as Bank of America, JP Morgan Chase, GMAC Mortage, Citibank, and Wells Fargo service most home mortgages for investors. Investors own the loans that have been “securitized,” which means they have been packaged and sold and resold to investors.
The big servicers manage the loans in the interests of investors, not homeowners. They do so in assembly-line fashion in which mass production and speed are everything. With furious buying and selling of mortgages, the servicers have produced rubber-stamped “robo” affidavits, factually wrong documents, and faulty deeds -- with little regard for homeowner rights.
WAFT says that servicers foreclosing on homeowners must now demonstrate that they actually have the right to do so. Attorneys at WAFT advise homeowners to stand their ground and tell servicers “Prove it.”
With shoddy procedures making headlines, major banks declared brief moratoriums on foreclosures. But after investigating themselves and finding relatively few cases of fraud, the major banks are back at it and it’s full speed ahead.
For the banks, it’s a race against time and multiple federal investigations now underway. In recent weeks, investigations into foreclosure fraud have been announced by the U.S. Department of Justice, the FDIC, The Federal Housing Administration, and the Federal Reserve.
The investigations come after federal efforts failed to get banks to work with homeowners behind on mortgage payments. In truth, President Obama’s modification effort, the Making Homes Affordable Program, has been a dismal failure. With the program voluntary on the part of lenders, MHAP could be safely ignored by lenders and has been.
Fewer than 500,000 have gotten modification through the Department of Treasury program. The promise was four million. Now two million homes have been lost to foreclosure and 4.4 million households are in serious default and heading for foreclosure.
Don’t hold your breath expecting the federal investigations to offer any real help. Proving foreclosure wrongdoing and prosecuting those responsible is not a top priority. The Treasury Department and the Federal Reserve really want the foreclosure mill to speed up and get done with so that house prices and the economy can rebound. In recent hearings, fed and treasury officials intimated as much.
Meanwhile, the foreclosure express rolls on here in Massachusetts. In September, 890 properties were foreclosed, an increase of 26.6% compared to the same month last year. So far in 2010, 10,777 properties have been foreclosed statewide, a 58% increase over the same period in 2009. These figures are from The Warren Group, a Boston company that tracks real estate.
In many states, a lender must go before a judge in order to foreclose. Not so in Massachusetts. The only time a judge sees a foreclosure case is when the lender initiates it. But with lenders preferring to avoid a judge’s scrutiny, few lenders initiate cases.
Massachusetts Attorney General Martha Coakley has called for a moratorium on foreclosures. Her call has been met with resounding silence from the banks The state has no way to enforce a moratorium. At the Statehouse, Legislation has been introduced creating judicial review of foreclosures in Massachusetts, but it has stalled.
However, Martha Coakley is also involved in something that could be literally life-saving for troubled homeowners. Amazingly, and practically overnight, she and all the other attorneys general of the 50 states have agreed to conduct a joint investigation into bank foreclosure practices.
Look for the investigation to raise holy hell. Foreclosures are securely in the legal realm of the states, not the federal government. The state investigation is out to force the banks to do something they hate: institute systemic loan modifications. With the fed having failed with voluntary compliance, the states are going for force -- legal force. To the banks, this is one threatening oxymoron.
In the latest issue of The New Yorker (Nov. 8) James Surowiecki put the threat succinctly: "Up to now, it's often been easier and cheaper for banks to foreclose, and mortgage servicers commonly make more in foreclosure than in modification. But being forced to follow the law before foreclosing, and having the threat of criminal investigation over their heads, may change the calculus."
The Worcester Anti-Foreclosure Team is determined to do its part in changing the calculus. Driving the group is a powerful idea: There may not be foreclosure judicial review in Massachusetts, but this is still America and Americans have rights. The main order of business at WAFT meetings is to help homeowners take defensive legal action; in other words, to arm them with information on the law.
It’s a lopsided struggle, to be sure. The banks employ legions of high-priced attorneys from the most prestigious law firms in the land. WAFT lawyers donate their time. They know very well that every foreclosure is a David and Goliath fight. Yet they have shown that the little guy facing foreclosure can win.
With WAFT lawyers behind him, Marty Grogoza is likely to pull it off. The auction of his home may still go forward on December 8, but he and WAFT are confident that Mr. Grogoza will complete his own sale by that date and at full price -- and neither he nor the lender will take a loss.
“I couldn’t believe that the lender said they would foreclose (and take a big loss) instead,” Mr. Grogoza said.
“This is a real victory for Marty and our neighborhood and our city,” said Chris Horton, a key member of WAFT.
In an e-mail by Grace Ross, she wrote: “So while Marty will have to move, he protected his credit, will get some money out of the deal, and controlled the sale of his home.”
Though the WAFT meeting I attended was dominated by legal talk, the presence of Grace Ross guaranteed action. She engaged in long legal discussions with the attorneys, sounding just like them even to fine points of the law (she has an M.A. from Harvard). It was clear that she was not leaving without three things: a plan of action, volunteers to carry it out, and a timetable.
She pushed for and got all three.
The plan was to distribute the group’s new brochure to homeowners facing foreclosure. The brochure explains, in simple and clear language, how Massachusetts housing law works and spells out the legal rights of homeowners facing foreclosure.
Volunteers would meet, split into two-person teams, and fan out into neighborhoods with many foreclosures. They would not just be stuffing the brochures in mailboxes. They would knock on doors, place brochures in people’s hands, and talk to them.
Ms. Ross called for volunteers. When no hands went up immediately, she scanned faces at the table as if to say “well, what are you waiting for?” Her attitude was: There are going to be volunteers, period.
Perhaps sensing some discomfort around the room about knocking on strangers’ doors, Ms. Ross said, “Hey, I have knocked on hundreds of doors.” She said that the vast majority of people are fine with it and those who aren’t are a tiny minority.
One by one, hands went up. Ms. Ross got her volunteers. “Good,” she said, checking the electronic calendar on her cell phone. She went around the table seeing when volunteers would be available. They decided on Sunday afternoon, October 24.
On that day, dozens of homeowners in foreclosure or in danger of it had human beings knock on their doors. They got brochures spelling out their legal rights. They got a chance to air their individual cases to receptive ears. Desperation became hope. Quite a few said they wanted to attend the next WAFT meeting.
I asked Ms. Ross if there were a lot of foreclosures in Worcester. She tapped on her cell phone and brought up a long list of Worcester foreclosures. Running down the lengthy list, she said, “The numbers are way up. I have never seen so many.”
Implicit in every foreclosure is one fact that gets little serious thought while setting off much angry name-calling. It is that the homeowner has failed to keep up with mortgage payments, with many in serious default of a year or two years or even longer.
For many people, such homeowners are “losers” and “deadbeats.” We hear: “Why don’t they go to work for chrissakes?” And also: “What the hell do they expect, a free home?” You have probably heard worse. I have.
Of course, some homeowners not paying are losers and deadbeats. Some are connivers looking for a free ride. Still, this is America. In our country, WAFT attorneys stress, even losers and connivers have rights.
For the big banks, such as America’s biggest, Bank of America, that is evidently a quaint idea. When a homeowners defaults, it is an open and shut case and the bank is judge, jury, and constable ushering people out of their homes.
After reviewing 102,000 affidavits, Bank of America declared: “The teams reviewing data have not found information that was inaccurate.” The bank said that it had found nothing that changed the plain facts of foreclosure, namely that the homeowners were in serious arrears. No homeowner had been foreclosed who should not have been, the bank said.
Left out of the rote process is perhaps the single most important value of American jurisprudence: due process. “Just because the homeowner hasn’t paid his mortgage doesn’t mean anybody in the world can kick him out,” said Katherine Porter, a law professor at Harvard. “The bank has to have standing to do that.”
She said that Bank of America’s position was like saying that someone who committed a crime shouldn’t receive a fair trial because he’s so obviously guilty. America’s system of law and justice just doesn’t work that way, she said. Apparently, due process is no legal nicety. It has something to do with who we are as Americans.
Due process would also seem to apply to Cheryl Platts and her husband, fellow Americans both. It didn't. In this photo, the WAFT group gather in front of her foreclosed home as Grace Ross gives an update on efforts to help the couple.
Cheryl's husband, Raymond Brodeur, is a veteran which made them eligible for their original mortgage from the VA. They have lived in their 3-story, 4-bedroom home in Worcester, Mass. for twenty years. They rented it for 10 years, before buying it for $72,000.
For many years, life was good. Both worked at full-time jobs. “I’ve been working since I was 14,” Cheryl said. “Sometimes I worked three jobs.” Her most recent job was at NDT international where she was a senior administrator. “I was responsible for all purchases, job orders, and customer service. Everything that went in and out the door came through me,” she said.
Then in 2003 NDT declared bankruptcy and Cheryl was laid off after 71/2 years. “I was the main breadwinner,” she said, making far more than her husband did in his job as a manufacturing worker. “I applied right and left for jobs, probably hundreds of them. But there were five hundred people applying for every job. Nobody would hire me.”
The couple managed to hang on, living on Raymond’s meager paycheck. Unable to find work, Cheryl went back to college, Quinsigamond College, and finished up her college degree. Still she couldn’t get a job. “Nobody calls back. It’s disheartening,” she said. “It would be better if somebody called back and said, ‘You know, you suck!’”
When the economy tanked in 2008, Cheryl’s husband was laid off -- and they fell behind in their mortgage payments. By now, the VA had long since sold the mortgage and it had passed through no less than five banks. It finally landed at Citibank.
The couple tried to get Citibank to modify. “I filled out every form under the sun,”Cheryl said. All she got were more forms and patronizing. “You can’t afford your house,” she was told. She was urged to “move somewhere where there are more jobs and living is cheaper.”
Citibank did manage to take a mortgage that in round numbers was $67,000 on December 15, 2009 and increase it to $103,000, mostly in huge attorney’s fees. Citibank finally foreclosed and the servicer was none other than, drumroll and a big ta-da, Bank of America.
The modest life of Cheryl Platts and Raymond Brodeur had managed to attract the attention of two of the biggest banks in America. As the foreclosure and eviction proceeded, legal documents arrived with factual errors. “Raymond’s last name was misspelled and even the auction date was wrong,” Cheryl said. “And when we told the Worcester Housing Court all the mistakes, they ignored everything.”
The auction went ahead. The home of Cheryl Platts and Raymond Brodeur sold for $96,700 and Citibank “went away happy,” Cheryl said. Bank of America went off satisfied with its servicer’s fees. The VA, which held the original mortgage, was but a dim memory.
As if having your home of 20 years sold out from under you were not enough, there was still more pain to come for the now homeless couple. Cheryl said that the constable sent out from Cambridge was “rude and lied to us.”
Here, she said, was one exchange:
Constable: “You can take just furniture and clothing.”
Cheryl: “What the fuck!”
Constable: “Don’t curse at me, missy. Go find your husband and talk to him.”
The movers were supposed to show up by 9 A.M., but didn’t arrive until after dark and without a big enough truck. The constable claimed --illegally as it turned out -- that they did not have to move everything.
“They dumped my stuff in the driveway in piles,” Cheryl said. Here Cheryl and Raymond are in their driveway piled with their belongings. She said they "threw my furniture around like it was trash. They broke my antique 1870 marble table top originally from England. It came all the way from England in one piece way back then and they destroyed it in half an hour.”
The movers changed the locks, leaving many of the couple’s possessions inside, including her father’s ashes. Cheryl said that the constable, this officer of the law, “laughed and joked with the movers” the whole time.
At the storage facility, the movers threw the couple’s possessions off the truck like it was junk, Cheryl said. When she objected, a mover told her, “Nobody is going to want your junk, lady.” When the movers were finished, Cheryl said that “they left my husband and I in the dark at the storage facility. I called the storage facility and the police.”
In this photo, Cheryl and Raymond show the broken marble top from their antique table. Many other belongings were damaged, they said. "They simply did not care,"Cheryl said.
“It was completely immoral,” Grace Ross said. “Legally, they are not able to do any of those things.” With the help of Ms. Ross and the Worcester Anti-Foreclosure Team, the couple got a restraining order halting the illegal actions.
Now the movers and the constable had to move the couples possessions -- all of them -- to a storage facility of their choice. And they had to do so carefully.
“Now that we got the restraining order, they are willing to talk,” Grace Ross said.
Unfortunately for Cheryl Platts and Raymond Brodeur, talk and compliance with the law has come too late. They are homeless.
“Where are you going to stay tonight?” I asked Cheryl.
“With friends,” she said, sighing deeply.
So long and keep moving.
P.S. As for Billy Gardiner, whose story we told last time, WAFT attorneys are not optimistic. Fannie Mae seems determined to auction off his home of 11 years. Unless the Worcester Anti-Foreclosure Team can pull off another miracle, they will. Billy says he is "waiting for the other shoe to drop" while hoping it never will.
P.P.S. I have been checking all those home public auction notices in The Worcester Telegram &Gazette. One name keeps cropping up. It is Harmon Law Offices, P.C. 150 California Street, Newton, Mass.02458 (617)558-0500. Foreclosure mill? Hmmmm.