Hope for Frances Gomez and Other Foreclosure Victims

New Orleans I have often quoted a line by a former Republican OMB director that we should “never suffer from premature certainty,” and given the disaster that banks, the Treasury Department, the Bush and Obama Administrations, and the servicers have made of the housing crises and its millions of homeowner victims, I almost hesitate to hope again that there might be some good news, so everyone is now duly warned, but reports now published in The New York Times and elsewhere indicate that the servicers are about to sign consent orders which would profoundly modify their evil ways.

Here are some of the likely elements of the deal:

  • Foreclosure staff will finally have to be properly trained which seeks to correct the problem of hiring, literally, from Burger King drive-by windows.
  • Third-party groups, including the shyster “mod-shops” and law firms.  I know Phoenix and there will be a lot of folks in this sub-industry looking for new jobs!
  • Every homeowner in default will have one “single point of contact” which would finally put an end to the anarchic madness and referral phone banks from Guatemala used by Bank of America for example.

All of that is nice and there’s an indication that there might be fines in the future for the scofflaws who don’t mend their ways, but there are two ingredients that made a profound difference for the victims and could be game changers if there is finally a fair deal for the beleaguered folks trying to hold onto their homes and in some cases having them stolen from them.

  • I’ve talked endlessly over the last year about the case of Frances Gomez in Phoenix.  While in the process of negotiating and being approved for a loan modification on her family home of 30 years, Bank of America foreclosed on her home and took it out from under her.  With pressure from the media, Advocates & Actions, and others, Bank of America admitted publicly that they had made a mistake.  They claimed that they bought the house back from foreclosure. They assigned it to a law firm in Phoenix to supposedly return the home to Ms. Gomez.  Now moving on almost a year later, Frances still does not have her home and has been caught in an endless “catch-22” which I have often shared with her as she has tried to get the “old deal” revived and seen Bank of America and its agents try to restore the original loan terms, pretending that this is a modification, that are almost three times the current value of the home.  Sure she could have the home back, but she would have to be crazy or rich, and she’s neither, so she continues to rent with her daughter and son-in-law and mourn the loss.  Well, this agreement may finally provide some relief, even if not her home!  The servicers will be required to employ an “independent consultant” who will review foreclosures over the last two years (why two?!?), and if homeowners were ripped off by predatory practices and fees or errors, incompetence, and theft as Frances experienced, then “they will be compensated.”  Let’s fight for that, Frances!
  • Furthermore, this agreement reportedly will prevent there being more “Frances Gomez” cases in the future.  It will bar servicers from being able to foreclose while home owners “are pursing loan modifications that might allow them to stay in their homes.”  That’s what we’re talking about, and that will make a difference in dealing with these scalawags.

At least maybe it will.  Nothing has worked so far and no promises have been kept to date by any of these bums from the street to Pennsylvania Avenue.

The difference could be that finally there may be some real weapons we have to fight with to force a fair deal and a little justice for homeowners trying to hang on, and that’s hope that can fuel a plan!

Facebooktwittergoogle_plusredditpinterestlinkedinmail

Widespread Fraud at Bank of America

Bank-of-America-300x285Orange Beach, Alabama Better late than never, the Attorney Generals of Nevada and Arizona sued Bank of America for “widespread fraud” on the bait and switch of promising that a loan modification is in progress and then foreclosing and selling the house out from under the homeowner at the same time.  The Times and the Wall Street Journal describe the complaints as harshly worded, but working in the Phoenix area with Arizona Advocates & Actions, my experience is that they understate the severity of the theft and deceit by a long shot.

Frances Gomez’s home still says it all for me, and is a continuing indictment of Bank of America’s horrible bad faith, because her case was a situation where Bank of America was caught red handed in exactly this kind of fraud.  She had been approved for a modification and then in the same week Bank of America foreclosed and sold the house.  We raised holy hell and Bank of America publicly admitted that they had made a mistake.  They had foreclosed on her because they had overlooked her income figures.  Bank of America representatives – the local lawyer they retained for this mess assured Ms. Gomez and me they were buying the house back and that they wanted to remedy the situation rapidly.  It all sounded great, but that was now six (6) months ago, and Frances Gomez is perhaps farther today from moving back into her home of 30 years than she was then.

The negotiation process has been Kafkaesque or in more American terms a classic situation of Bank of America and its lawyer never seeming to know who is on first and what is on second.  Months after we had gone back and forth, the lawyer would act like he was surprised that Frances was not back in her house, even though no terms or modification had been agreed and worse the only solid offer they made was to reinstate the original terms of her loan, meaning that she could start paying again on a $300,000+ note for a house that had been appraised at $125000 to $150000 and sold at foreclosure for about $165000.  That’s not a modification at all, but simply the same problem that led to the problem in the first place, and the modification that they had been working on at the point of foreclosure was completely forgotten, while the attorney pled, perhaps sincerely at some level, total ignorance.

Subsequently pushing for a real modification, and trying to make sure that Bank of America was not trying to pretend that Frances had reoccupied her old home and thereby try to argue that she was incurring more arrearage even as she tried to strike some kind of deal to come back home, everything stretched painfully along as Bank of America continued to once again pretend that they could not figure out Frances’ income.  Frances is self-employed as a stylist and hairdresser at her own salon with long time customers.  Surely before the recession and her husband’s death, the salon had been larger with 3 or 4 the number of workers, but she had never been out of work or bereft of income.  The problem is that in the “new” world, Bank of America doesn’t have “stated income” loans which make it very difficult for the self-employed.  Frances keeps submitting her bank statements and monthly cash flow on her business, and Bank of America and its lawyers keep pretending that they do not understand her income and that she is being unresponsive.   I don’t want to give the impression that the situation is going back and forth like this, because really the situation is going nowhere.  Bank of America clearly just hopes that this “fraud” goes away.

Meanwhile the house deteriorates.  Frances drives by and cries.  Bank of America does nothing to maintain the house.  Vandals have been about.  The pool is moving almost beyond repair.

In the Wall Street Journal spokesfolks for Bank of America claim that they are open to revisions in the “dual track process,” meaning the process that has a modification moving forward at the same time that a foreclosure is also moving ahead.  This is the situation that sank Frances Gomez and her 30-year family home in Phoenix.

Of course Bank of America is lying.  They could stop the dual track process in a minute and with a memo.  They prefer the shuck and stall process which in silence finally strips away the home and hope of people like my friend, Frances.

For six months we pled with the Arizona Attorney General’s office to do something about this.  We argued that it would even help Attorney General Goddard in his election campaign for Governor if he stepped up for foreclosure victims.  We are delighted that it is finally happening, but this is the 11th hour for Goddard with his term expiring in about two weeks.

This is how “widespread fraud” works and how it is allowed to continue bumping from one failed program to another from one scandal to another and still taking homes from people, destroying neighborhoods, and pulling down whole cities around the greed that echoes from Charlotte to Wall Street to San Francisco to Chicago and the other headquarters of the perpetrators leaving the victims to live with the ruins.

Facebooktwittergoogle_plusredditpinterestlinkedinmail