Faces Of Foreclosure

The following is from a Facebook comment posted by an observant Realtor.

(Editor’s Note: I completely understand the frustration of trying to save one’s home and then losing it. However, I can’t understand destroying something you have loved because it is no longer yours . . . years ago I read Nikos Kazantzakis “Serpent and Lily,” wherein when the artist’s lover says she is leaving him, he kills her. That didn’t make sense. Destroying property does not make sense. There HAS to be a way to bring lenders to their knees but destroying homes isn’t, in part because they have insurance for everything.)

“I showed a home just prior to Christmas that, literally, had liquified feces on the wall used as a “writing” tool and aside from some very choice curse words, there was a very solid message to Litton Loan. While the act was irrational on the part of the former homeowner, what is clear is that they got in trouble and didn’t want to leave the home . . . that is the sad reality and I’ve seen dozens of home where the person being foreclosed on ceases to care and seeks to destroy out of anger and frustration.

“The issue is deep in this country. I don’t want to walk away from real estate after ten years because I don’t believe that homes and home ownership aren’t the foundation of the economy . . . because I do. I’m ready to hang it up because I don’t know if I can ethically and with a good conscience, tell someone to buy now or even during the course of the next year, without risking losing even more.

“I anticipate that, as long as the Congress is more hellbent on shoving healthcare reform down our throats, and spending trillions of dollars a year on poorly thought out plans that do nothing but devalue our currency . . . then we’re in for a very long, very ugly road as far as real estate is concerned.

“I’d almost rather go work at a job with benefits and a guaranteed paycheck and put aside money until homes are worth half or LESS than they are today.

“Mark my words . . . it will happen and right behind it . . . hyperinflation. All the economic indicators are there and the current administration will make Jimmy Carter look like an economic genius.”

Excerpted From The New York Times
November 2, 2009
David Streitfield and John Collins Rudolf

“Frustrated by the banks’ inability or unwillingness to stop an avalanche of foreclosures, the states are considering lawsuits over the creation and marketing of millions of bad loans as well as the dismal pace of mortgage modifications.

“We tried to use the tool to be persuasive with the banks,” Arizona’s attorney general, Terry Goddard, said in an interview. “But their waterfall of excuses, the abysmal numbers of modifications, tells us persuasion is not working.”

“As a result, he said, “we’re moving much closer to litigation.”

“While statutes vary, those of every state prohibit fraud in consumer lending. The attorneys general are considering the theory that the banks essentially perpetrated a vast fraud on consumers by marketing exotic loans that would prove impossible to pay back.

” . . . During the boom, the banks earned short-term fee income from generating the loans, then quickly resold most of them to investors or to Fannie Mae and Freddie Mac, two government-sponsored housing agencies that eventually required costly taxpayer bailouts.

“The banks balked at surrendering any information . . . the federal Office of the Comptroller of the Currency filed suit, asserting the states had no authority over national lenders . . . Andrew M. Cuomo, took up the battle. Lower courts agreed with the banks, but the Supreme Court, narrowly, did not . . . “The handcuffs are off,” said Ann Graham, a professor of banking law at Texas Tech University. “The states can pursue justice now.”

“In July, the Illinois attorney general, Lisa Madigan, filed a civil rights case accusing Wells Fargo of predatory lending. . .

” . . . At other times, they merely switched their charters. When Illinois first started investigating the branches of Wells Fargo Financial Illinois for predatory lending in the spring of 2008, the branches operated under a state charter.

Initially, Wells responded to the state’s subpoena. But on July 26, 2008, the branches were put under the control of Wells Fargo Bank, which is nationally chartered. Wells promptly informed the state of this new situation and ceased cooperation.

With such maneuvers, Ms. Madigan said, “it was much easier for people in the banking industry or any other industry to hide their misconduct . . .

” . . . After the Clearing House decision there was “a virtual parade of national officers of national banks” coming through, ostensibly eager to find a common ground to help stop the flow of foreclosures that are running as high as 7,000 a month in Arizona . . . But Mr. Goddard, a former mayor of Phoenix, said the lenders were often unable or unwilling to provide him with elementary information, including how many and what kind of loans they have in the state . . . banks have been imploring Mr. Goddard to tell homeowners in default to get in touch with them, opening a dialogue . . . But the homeowners say they call and get no response.

“People call and get a runaround,” Mr. Goddard said. “The paperwork gets lost. It’s time to stop this absurd dance.”

During the past few weeks of reading blogs about families losing their homes, it’s clear that a significant number of people in the U.S. have decided that those families surely did something to deserve the loss, i.e. went in over their heads, did not have savings in the bank, basically screwed up somewhere.

That is just not so in thousands of cases. To wit:

“There are 14.5 million officially unemployed people in the United States and 2.5 million job openings. In other words, for every six people looking for work, there is one job to fill . . . these are Labor Department numbers . . . if the reality were twice as bad, it’d be no surprise.”

Those are frightening stats. As these numbers clearly illustrate, even those who had the recommend 6 months savings, or even 12 months savings, many are in trouble as it can easily take 12 months to a couple of years at this juncture to find work at any salary and especially, perhaps for the most qualified as they are told they are “over-qualified.”

I’m repeatedly shocked by the caliber of people I meet who were laid off months ago . . . and a few a year or more ago. These are individuals who had never been unemployed in 20 or 30 years worth of work. It’s very sad. Not only for the people who lost their income and now must lose their homes, but also for those people in denial about the reality Americans are living through today and who would rather blame them for their troubles than to help.

Quite interesting to note that the bulk of the blog posts are during working hours and how quickly they end at 5:00 p.m. This means, of course, given the self-righteous tone and the time of day, that a considerable number of working people must be writing those blogs.

Surely there is a bright side? Perhaps the self-righteous bloggers will soon be fired for misuse of company time and equipment; then people who really want to work can take over the newly vacant position and use the income to save their homes. Then watch the tables turn.

During some years as Executive Director of a major fundraiser established to assist people with a one-time critical need, it was clear that the most bizarre things can happen to anyone. Everytime I read one of their stories, I thought “There but for God go I.” Might be a good time for all of us, especially the stone-throwers, to keep that in mind.

Everytime I hear a story like the following . . . which is happening frequently lately, I think of Steven Segal’s movie “Above The Law.”

The Foreclosure Survival Guide: Keep Your House or Walk Away With Money in Your Pocket This book from Nolo Press is excellent (as are all Nolo Press books). It will help you make decisions that will help save your home or help you walk away with grace (and money). That said, I am working on my own soon-to-be-published own guide as after 18 months of “negotiations” with Wells Fargo Bank — servicer of my note (a term I did not know 18 months ago) — the bank finally gave me a five-year stay of execution. I have a 20 pound, six-inch-thick binder of who said what to whom. It was nothing short of a nightmare. What would have been a rough six months in my life turned into 18 months of fear, sleeplessness, anger, etc. and my goal is to pay off this loan and never deal with this bank again. The Guide contains: Ways to negotiate, workout proposals, links to foreclosure laws by state, legal defenses of borrower, things lenders do not want you to know, letters requesting validation of debt, FTC and HUD complaints . . .

Interesting that the $12 million house squatter, Cheronda Guyton, a Wells Fargo executive, is scheduled to speak at the 1009 Trigild Lender Conference on October 21-23, 2009 at the US Grant Hotel in San Diego. Think she’ll show up?

Excerpted from
Wall Street Journal, Associated Press, Los Angeles Business Times, Denver Post and various websites.

Wall Street has long worried that the hundreds of thousands of foreclosed houses in the U.S. are losing even more value as they become havens for vandals, vermin and drug dealers looking for a place to crash.

Here’s an unusual squatter: A senior vice president at Wells Fargo & Co., who is in charge of many of the bank’s foreclosed properties reportedly moved into a 3800 square foot, two story beach house in gated Malibu Colony last May after the bank foreclosed on the property.

It’s outrageous to take over a property like that, not make it available and then put someone from the bank in it,” said Phillip Roman, an 18-year Colony resident who lives a few homes away from the property.

Wells Fargo said in a written statement that it would conduct a thorough investigation of the allegations by neighbors, but said it wouldn’t “discuss specific team member situations/issues for privacy reasons.” The bank also said its ethics code wouldn’t allow employees to make personal use of property that has been surrendered to satisfy debts.

and

Such conduct would pose a conflict of interest, said W. Michael Hoffman, executive director of the Center for Business Ethics at Bentley University in Waltham, Mass. “For a business to allow this to happen in today’s ethically charged climate is quite suicidal,” he said.

According to an LA Times article, a Wells executive, who is responsible for the bank’s foreclosed commercial properties, was seen throwing parties at a $12 million beach house in Malibu, California, which the previous owners had to surrender to Wells to satisfy debts. According to the article, Wells Fargo had refused to show the house to prospective buyers, perplexing local real estate agents.

Adding fuel to what must be a public-relations nightmare for the bank is the fact that the couple who lost the home in foreclosure had to give up the property because they were victims of Bernie Madoff’s ponzi scheme.

The Times interviewed neighbors who said they spotted the Wells executive, Cheronda Guyton, throwing lavish parties at the sleek, modern house with a patio overlooking the Pacific. At one party, guests arrived by yacht.

According to the Times, Guyton couldn’t be reached at her downtown Los Angeles office and Wells Fargo declined to discuss Guyton but said the bank will “conduct a thorough investigation of the allegations.”

It hasn’t been a great week for Wells, one of the nation’s largest mortgage lenders. Banks like Wells are taking heat for failing to modify troubled mortgages quickly enough as part of the Obama administration’s $75 billion foreclosure prevent plan. According to the Treasury, Wells Fargo has started trial mediations for 11% of its eligible borrowers who are at least 60 days overdue. That lags behind the average 12% rate of modifications among the nation’s lenders. Congressional leaders say lenders need to move faster to prevent another wave of foreclosures from stalling the housing recovery.

“It appears that at least one Wells executive involved in this effort may have been a bit, well, distracted in recent months.

More:

The house was foreclosed and wasn’t available for rent. The residents of Malibu Colony have told the newspaper that Guyton is one of the executives of Wells Fargo & Co. and that a Volvo with a registry date of year 2007 is also seen often in the garage. Upon investigation, it was learned that the car belongs to Ms. Guyton.

When the media tried to contact Cheronda Guyton, all the calls made to her office number were unsuccessful while there’s no number listed against her present home address. Previous residents of the home have accused the bank of acting against the agreement which states that the home will not used for any marketing purposes. However, the bank says that the agreement was valid for only a certain period of time and that the bank was listing the house for sale.

and

“Residents in the gated community told the Los Angeles Times that a woman they believed to be Cheronda Guyton took up occupancy at the home in May. Residents said they obtained Guyton’s name from the community’s guards, who had issued her a homeowner’s parking pass.”

The bank’s agreement with the prior owner required it to keep the home — a 3,800-square-foot, two-story structure built in the early 1990s — off the market for a period of time, Wells Fargo said in a statement to the paper. What awaits Guyton remains to be seen as Wells Fargo investigates the matter. But one thing is sure: Her days of partying in the celebrity-laden Malibu are done. – George White

and

Such conduct would pose a conflict of interest, said W. Michael Hoffman, executive director of the Center for Business Ethics at Bentley University in Waltham, Mass.
“For a business to allow this to happen in today’s ethically charged climate is quite suicidal,” he said. And because Madoff’s fraud was the root cause of the situation, he added, “it’s like rubbing salt into the wounds of a national tragedy.”

Malibu Colony stretches three-quarters of a mile along the beach in the heart of Malibu. Its residents include actor Tom Hanks, former Univision Chairman A. Jerrold Perenchio and high-profile investment banker Michael Tennenbaum.

Colony residents said the woman they believe to be Guyton, along with her husband and two children, took up occupancy at 106 Malibu Colony Road shortly after Lawrence Elins turned it over to Wells Fargo Bank on May 13.

When a Los Angeles Times reporter used the buzzer at the home’s steel gate on Labor Day, a woman answered the intercom but declined to identify herself or come to the gate.

When asked whether the home had been foreclosed on, she said, “it’s not foreclosed. It’s owned by Collin Equities” — a Wells Fargo unit that liquidates foreclosure properties.

The woman on the intercom denied that she was living at the house or had been using it periodically over the summer. Asked whether she could say why she was at the home, she answered, “No, I cannot.”

and

The AP said it could not reach Guyton for comment.

Lastly, if it is true that there is an agreement to hold the house “off the market for a period of time,” per Wells Fargo, why is there a website built to show the home: 106 Malibu Colony AND if the house is actually on the market, why wasn’t it being shown to prospective buyers or renters on or around March 13, 2009, which is when the domain was registered through 1and1.com as 106malibucolony.com?

Real Estate agents do not register a name UNTIL they have the listing; it addition to having its own site, it is on Zillow “available for lease” at $65,000 per month long-term or $100,000 per month during summer through Coldwell Banker.

Speaking of Coldwell Banker, most real estate agents contacted by the L.A. Times re the incident expressed surprise over the use of the home and many were appalled. However, per the Times, agent Farrell “Burt” Bakman of Coldwell Banker in Beverly Hills, said he saw no problem with a lender using a property “as some sort of a bonus.” And there you have yet another example of what is wrong in America. A bonus for what? Foreclosure? This is absolutely insane.

Realized — just today actually — that I’ve been upset for the past several months ’cause for the First Time In My Life I am scared. “Frightened” is not in my nature. I’ve actually had nightmares and dreamed of the “Wolf at The Door,” in banker’s clothing.

Of course that made me mad at the mortgage lenders scaring me, so I’m reaching out to the only people I think that can do anything about it, which would be producers of movies and television series. (Book publishers could also, but the traditional book publishing process is staggeringly slow, and too many people no longer read.)

One of the most important things to many (most) of us is housing. For millions of Americans, that is now threatened and little is being done about it. Lots of diatribe; no actual results. If I . . . as the 5th generation of my family in California (and 7th in Maine) . . . am frightened, how do the new(er) immigrants feel about moving to the Land of the Free and the Home of the Brave with the promise of a home, a chicken in every pot and two cars in every garage? Many escaped from Wherever to find peace, opportunity and freedom only to be told “Oh, too bad, you have to move. You have lost your home. Oh, you didn’t read the mortgage papers correctly. All 9,000 words. So sorry.”

Recently in The San Francisco Chronicle, Matier and Ross commented about a man who has lost his home because the “bank” wouldn’t negotiate. What about naming the banks when these stories are told. Matier & Ross must have wanted to as they are responsible journalists, but I’d bet my eye-teeth that they were stopped at the corporate level because that “bank” is probably an advertiser. So much for truth in journalism.

Some weeks ago, the Santa Rosa Press Democrat told the story of James Madison, a Santa Rosa Coldwell Banker agent, who is proud of how much money he is making by “helping” people get out of their homes so he could sell them to someone else. He has approached CRYING men who have to leave their homes. I don’t know James Madison. I don’t want to know him. He is a shark swimming in blood-filled waters. I feel sorry for his wife and children. I feel sorry for him. What goes around comes around.

If magazine/newspaper advertisers cover the expenses — and they do with print as subscriber income has never even covered the cost of paper — then the paper sells out as appropriate to underwrite the bottom line . . . especially now with dwindling dollars from all directions. Hey, it’s business.

Some banks need to have their Charters pulled (which was suggested to me by a successful politial activist.) I have filed a Congressional Inquiry into the bank I am most upset with (name to come later). They are taking tax-payer dollars and they are not helping taxpayers.

Danny DeVito produced Erin Brockovich. First letter is going to him. Hollywood Reporter reaches everyone we need. Letter went to them this a.m. Clint Eastwood kissed me once at a cast party — his idea, not mine — however, maybe I can get through to him (and occasionally I’m sorry I missed what that might have lead to; I left for yet another party).

Of course, I wrote to Dr. Phil — in the section asking to send in stories about American cities that have parties that disagree . . . well, the whole of America disagrees on this one, although we have recently been diverted by news attention to flagging underwriting for medications (this IS a seriously drugged society . . . whether it be with actual prescriptions or food or “toys). People who have secure housing, be they apartment dwellers or home owners, think those of us in danger did “something to deserve it.” Well, they would be wrong. And I understand the “comfort” in thinking, “I did nothing wrong ever, so this dreadful economy won’t touch me.” Guess again. For 16 years I ran a successful fundraiser with this at the top of my mind: “There but for God go I.”

I love “Leverage,” “Burn Notice,” “Bones,” various “CSIs,” all of “Law and Order,” Lie to Me,” etc. A story on one or all of these is precisely what is needed to bring the expletive deleted banks to their knees (while somehow preserving jobs for all the fine people that are actually on the front lines).

Do you know that Wells Fargo has TWO, count ‘em two, class action suits against them? And do you know that Wells is now owned by a Texan? What IS it with that state?

More later . . .

And if you happen to be connected to a producer, PLEASE let me know and/or forward this.

What hard-working people are going through is positively insane. It’s just plain wrong. In a recent Twitter post, William F. Kane noted that according to Cuomo – Yahoo! News “Bonuses paid to executives at nine banks that received U.S. government bailout money in 2008 were greater than net income at some of the banks, the office of New York Attorney General Andrew Cuomo said on Thursday.”

From CNNMoney:

Why can’t mortgage servicers process more than 9 percent of the applications of borrowers eligible for a government retooling of their loans?

1. Fax machines. Most loan servicers require that applications be faxed. “It’s archaic. Given all the problems we’ve had with lost faxes, it seems unreasonable to use a fax system,” says Michael van Zalingen, director of homeownership services for Neighborhood Housing Services of Chicago.
2. Too many forms. Each servicer has its own form, as does Freddie Mac and Fannie Mae.
   Outdated info. By the time the multiple forms get through the fax machine, the information is outdated and applicants have to start all over.
3. Green personnel. Servicers are hiring and training staff by the thousands and most of them haven’t been on the job long enough to understand the process.
4. Too complicated to comprehend. Some eligible borrowers are receiving loan modification offers without even applying, but the paperwork is such gobbledygook that they mistake it for trash and throw the offers away.

Source: CNNMoney.com, Tami Lubby (08/11/2009)

Proposed for Numbers:

While listening to his neighbor’s harrowing story of being moved out his home due to foreclosure, Charlie’s brain was automatically calculating the probability of more than three million families all making the same financial mistakes and losing their homes. That’s ten million displaced people.

Like many people, until someone close was affected, a neighbor that he knew to be responsible and hardworking, Charlie hadn’t thought about the odds of millions of people being irresponsible to such a degree that they lost their homes. He went to his board to figure this out . . .

WHAT IF each of the major crime dramas, i.e. “Lie to Me,” ” Criminal Minds,” “Without A Trace,” various “CSI” programs, “Burn Notice,” “Numbers,” “The Closer,” “Leverage,” the new “White Collar Crime” (which is excellent — check out the “young blue eyes” lead), Hawaii 5.0, etc. presents their spin on our current mortgage nightmares/foreclosures during a season, all on separate evenings so they don’t touch each other’s ratings.

This real estate debacle is war on our own soil, so what about staging a national fundraiser through crime television programs, each of whom present their own take on the story of an individual or family (a real family) who has lost their home through foreclosure? And what about photographing just one day in every state; every state has dozens of foreclosures per day.

WHY? ‘Cause SOMEONE has to do something effective! And because many denizens of Hollywood care deeply about their craft and country. Movies and television dramas do bring truth to light and light to truth.

These are the images you see on the news. You seldom see the men, women, children, dogs, cats, birds, etc. that have had to move. Some of these people have been out of work for awhile and have no money to move and/or can’t find rentals that will accept their pets. Where do they go? What happens to the uprooted children?

Have you done the math for the millions of homes that have been lost to foreclosure? It’s a shocking revelation. Surely lending institutions are not thinking of their future. Two million foreclosures (this year alone) translates to an average of 2.6 people per home (5.2 million people), times a 50% expected population growth by 2050 (41 years). More than 10 million people, all passing down the stories of how they lost their home because Wells Fargo or Bank of America or Chase would not assist even though they received billions in taxpayer dollars to help families keep their homes.

If the lenders think this is going to go away, it isn’t. People in the Southern United States are STILL upset over the Civil War which ended in 1865.

Think about the goodwill of such a project. And, again, that audience. Many of these shows have audiences exceeding 2 million anyway; this could add a few million more viewers to each show.

Depending on your position in our home foreclosure saga, you will be damned or you will be praised.