Tag Archives: loan modification

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!


Making Banks Pay to Maintain Foreclosed Properties

John Tanner of SEIU Local 721

John Tanner of SEIU Local 721

New Orleans One disclosure after another leads the news disclosing the bad behavior of banks, servicers, and others in the foreclosure racket, but often to the victim it seems like little more than water hitting the rocks whose impact none of us will survive to see.  In recent weeks close reading of major papers would have detailed the larding on of fees by servicers that stand as barriers to modifications, the home break-ins and property destruction and seizures authorized by banks and carried out by thugs, and the “widespread fraud” revealed in filings against Bank of America by Arizona and Nevada law enforcement authorities, all piled on top of questionable record keeping, auto-signatures, and almost zero effort to self-supervise an effective loan modification program.

When I walked recently in block after block of the western neighborhoods of Phoenix with Arizona Advocates & Actions (www.advocatesandactions.org) and looked at the damage abandoned properties owned now by banks are doing steadily and surely to fine, working family neighborhoods, I wondered why cities are not doing more in face of such dramatic consequences.  The common city excuse is lack of resources in the wake of the recession, but it also is a lack of will and wisdom in dealing with the community killing banks and their irresponsible practices.

Los Angeles has taken a step in the right direction thanks to a successful campaign led by ACCE (the Alliances of Californians for Community Empowerment, formerly California ACORN) and SEIU Local 721, which represents Los Angeles city workers who have “skin in the game” both as workers and residents, and other political and community allies.  They prodded the City Council to pass an ordinance which establishes clear accountability to the banks and tough penalties for inaction.   They created a “foreclosure registry” requiring lenders to maintain foreclosed properties or be fined $1,000 per day, up to $100,000 a year. Lenders will have 30 days to straight up the properties before fines are imposed.  SEIU Local 721 set up a website allowing citizens to easily report problems (“Hoodwinked LA” Web page), and given the revenue stream it is in the interest of the City to actually keep their feet on the bank’s neck to get them to fix up or pay up.  If ACORN were still alive this would be a campaign being waged in 50 cities now as communities with the same problem moved to replicate the model won in Los Angeles, but even without an ACORN to pull the trigger, word of this kind of victory needs to get out and about.

In Los Angeles these community-labor partners are clearly going to keep stoking up the fire under the banks.  Long time organizing veterans like Amy Schur with over 20 years at ACORN and Peter Kuhns, another veteran of ACORN organizing who has spent his entire organizing career in Los Angeles, will no doubt keep adding fuel to the fire.  In a picture the other day of civil disobedience at one of the banks, I could see John Tanner, long time SEIU International organizer and now the head of SEIU 721 for Los Angeles city and county workers among others, towering over the crowd and listed among those arrested.

They’ve done their part, now the rest of us need to get busy!