Hoping for the Best

Last week, we heard someone walking around in the back yard and the dog was going crazy. Then someone started pounding on the front door. We felt really nervous! Was this the sheriff?

When I had my landscaper dig up all of my rose bushes, he misunderstood me and stopped service. I figured we would be out at least within a month, so didn’t bother to correct him. We had gotten a letter from the HOA regarding the overgrowth of the front yard and called him to come back and simply mow the grass.

The person at the door had been sent by the HOA to maintain the lawn, as they thought we had moved out, due to letting the grass grow. He said that about 90% of the time they send him out to properties, the homes have been vacated. Often, he runs across people who are renting the home from the former homeowners, ignorant of the fact that it is a bank-owned property and they are living there illegally – through no fault of their own. Rarely, he said, does he run across people in our situation – fighting the banks and continuing to live in the home.

While I’m grateful it wasn’t the sheriff and that he was so nice, these numbers are a little disconcerting to me. They tell me that most people don’t fight.

With our lawn already taken care of, he left, and our heartrates returned to normal.

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We found a place we loved after a month of searching, and applied, only to be turned down. Turned down because the courts didn’t do their job.

My roommate’s credit report came back saying that she had been evicted in 2009, which is when the first Unlawful Detainer was filed. The case was dismissed in 2011, and she was never evicted. Her name was added to the suit against me by my attorney, because the lender did not follow proper procedure in filing the UD. Federal law requires 90 days’ notice to be given to tenants and they only gave 30 days’ notice to me. Because we were applying to live in an individually-owned condo, the owners said they were uncomfortable with the fact that the eviction happened in the first place, regardless of whether it was standard procedure in a foreclosure, which does show up on my credit history. Apparently, the foreclosure was of less concern than an eviction.

I got a copy of the court files on the UD, and it plainly shows that, not only was the UD dismissed against both of us, but also that the records were sealed! California law dictates that records of any evictions arising from a foreclosure are to be sealed. This was enacted to protect people like us and ensure that we would not end up on the streets after losing our homes.

The eviction process is clearly being exploited, in my opinion, by lenders because people fear evictions and the blights they leave on your credit history. Being evicted, regardless of the reason for it, signals to property owners that you are a potential fiscal liability to them – whether that be damage to property or non-payment of rents. In California, you cannot start the eviction process until 3 months have passed, then it could potentially be another 3 to 6 months to get the tenant out, which substantially cuts into anyone’s profit margin.

But still, this is no fault of our own. Unfortunately, this is not an easy fix where I can go into the courthouse and say, “Um, excuse me, but the court records show that this case was sealed, but the information is still coming up on her credit report.” No, your attorney has to file for an ex parte hearing in front of the judge who initially ordered the case sealed and ask them to fix it by updating the credit agencies.

This is just another example of how jacked this system is. Usually, when there is an item on your credit report, you can file a dispute. In this case, however, the information didn’t show up on the free annual credit report everyone is entitled to. Only corporations requesting your full credit report, which pulls up some information you, as an individual – your own personal information – are not privy to. In my opinion, this is not how things should work!

So, in the meantime, we are continuing to search for a place to live. It really is surprising to me that, almost as soon as places come on the market, they are pulled off. Definitely an indicator of the fact that there has recently been another round of foreclosures – over 1 million since January 2012. In California alone, foreclosures in June actually jumped 18% over 2011, despite the new Homeowner’s Bill of Rights, which wasn’t signed into law until July 2, 2012. With that jump, it’s no wonder that so many people are looking for rental housing right now.

I feel very fortunate that, at least, we’re not being pushed out the door just yet, which brings me to the last piece of news – my loan has been transferred yet again. The lender that foreclosed on me was Aurora Loan Services, a servicer for Lehman Brothers Bank. Yes, of the always-infamous Lehman Brothers. Their banking division remained intact though their investment division failed in September 2008. (The same month I was downsized, and in which I requested a modification – coincidence?) Last year, the bank was renamed Aurora Bank, and my loan was transferred to them. Now, it is owned by NationStar.

A brief review of the search results for NationStar returned do not make me feel very good! There are thousands of complaints against them. Yet, this corporation is on a buying spree, purchasing mortgages from banks seeking to divest themselves of all mortgage loans. Hmmm…

All I can do is hope for the best!

 

Where Do We Go From Here?

Oy, has it been so long? My days have been an endless mash of arising, going to work, and packing. I’ve made time to do a few fun things, but time seems to slip away from me every day.

Gosh, life is funny sometimes. How different things can look when we just flip the telescope in the opposite direction. Wasn’t it just a few months ago that I was dreading having the sheriff ring my doorbell? Well, now I’m anxious to have my doorbell rung! After weeks of waiting, packing in preparation, and living with towers of boxes around my home and only a minimum of necessities, it is almost agonizing to be in such suspense, knowing it’s coming, but not knowing when.

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A friend of mine has been facing difficulties maintaining payments on her home, and says that it will be going into foreclosure in 50 days. It is heartbreaking to hear and see her agony. I know what it’s like to face foreclosure, to drain your savings to save your home, to try to figure out where to can go if you have to leave – without having the funds for a rental. I know the anger, mortification and despair. I know the sleepless nights, listless days, and strained smiles.

Yet, her experience is slightly different from mine because she was not told by her mortgage company to stop making her payments. She simply had to stop making them because she ran out of money. I thought my mortgage company was working with me to keep me in my home. She has been luckier because she stopped making payments in October, so the bank has given her 11 months before initiating the foreclosure.

Learning of her situation made me realize that I had hoped to help people through this blog, but most of what I have written about has been my particular case, which I’m afraid may only help those being told by their lenders to strategically default.

Here’s the thing – if you’ve run out of money, or your payments have ballooned beyond your means, there are still avenues you can take. In my opinion, you should not just throw up your hands and walk away. There are many government programs out there. Yes, I know most of them have not shown to be worth the time to many, but as an eternal optimist, I can only hope that the rules may change as you are going through the process, or Obama might get some cojones and make it mandatory for all lenders – including Fannie May and Freddie Mac to do whatever it takes to make homes affordable. People just now going into foreclosure have the pioneers to thank for getting angry and getting at least some concessions and laws changed – it’s still not enough, but I feel encouraged by hearing more and people acknowledge that homeowner’s rights have not been adequately protected.

Another, last ditch effort would be to research your property’s records at your County Recorder’s office. (And, actually, this tip pretty much applies to every homeowner, regardless of whether you are in foreclosure, in danger of foreclosure, or sitting pretty.) These tips come from Foreclosure Fraud, and you can read how to research your records for evidence of forgery, fabrications, and fraud here.

This is why you should do this: if the lender collecting money from you cannot produce a valid note, you may not owe anything at all, and the lender cannot legally foreclose on you! It’s a scary fact – just because you’re receiving a mortgage statement or receiving default notices doesn’t mean that the particular bank named owns your loan. If you didn’t walk into a bank lobby and apply for a loan, most likely your loan was securitized. If you took out your initial loan 25 years ago, then refinanced without walking into a lobby, your refi may have been securitized too. The truth is that the plan to securitize pools of mortgages was not thought out very well. They were all thrown into the pool, to be shared. And no one can draw a solid line from the homeowner to the bank that owns the mortgage. Even the kiddie’s menu at Denny’s lets you draw a solid line from one end of the maze to the other!

A significant number of cases have been won solely on the basis that the lender cannot prove they own that particular mortgage. Another significant number of cases have been won on the basis that the signatures attached are forged. Make sure you review the note the lender holds – you may simply find a page attached to the end of the note with 4 to 6 lines for printed names and signatures that don’t even identify what the signatures are for. The signature page must identify what document the signatures are being affixed to. I have seen cases where the signatures have been obviously whited out and re-signed – including the home owner’s signature.

Now, just because you discover forgeries, fabrications, or fraud doesn’t mean you won’t have a battle ahead of you. If you discover this before the foreclosure sale, you can file a Lis Pendens with the courts, which prohibits your lender from selling the property. Or, you can file a suit against the mortgage company for taking your payments despite not owning the loan.

Believe me – if you can be proactive, it is better than trying to fight off an Unlawful Detainer (eviction) action, because the majority of judges go with the standard argument that the holder of the note has the right to the property, regardless of how they obtained the note. And eviction cases move very, very quickly.

This is imperative to do, especially now, with experts predicting that foreclosures are due to begin ramping up again. On my local news station the other night, a guy who helps people find homes for purchase or rent was decrying the lack of homes available because there aren’t many foreclosed properties left out there. Really?!?

It is amazing to me, but only 10% of people contest their foreclosures. Can you just imagine, out of the millions and millions of foreclosures happening around the country, just a small fraction of people have put up a fight? It’s true that many people just don’t have the resources to fight. But it is possible to represent yourself successfully, if you are willing to put in the time and effort to learn the laws and how to prepare filings. As one author I recently read questioned (my words) – if you knew you could get away with it, wouldn’t you file millions of foreclosures knowing only a few people would object through the court systems? If you knew you would win 90% of the time, would you do something heinously illegal? If you knew no one, including the President of the United States was going to lift a hand to stop your behavior, what would you, a greedy bankster, do?

Much of the latest news still shows many fraudulent and unethical actions being taken by banks, but with the small uptick in the number of laws dealing with Citizens United and student loan debt being decided in favor of the little people, I am finding a glimmer of hope. It is my fervent hope that some massive changes will roll up out of these smaller, individual ones within the next year. As Alexander Pope wrote a few hundred years ago, “Hope springs eternal…”

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Have you spent all your money to save your home then had to move out? If so, what did you do?

 

The Latest Plan to Save Our Homes

There has been very little activity regarding my case, with the exception of my first civil suit against my lender being dismissed due to “non-payment of filing fees”. It took me and my attorney a few days to figure out what happened. You try going to court multiple times for many months and see if you remember what happened there on a particular day. Note to self: start writing this stuff down on a calendar or a notepad!

Through my life, I have not had much interaction with attorneys. In my experience so far, I find that I have had to constantly remind my attorneys about conversations we’ve had, the facts of my case, and so forth. They don’t whip out my drawer full of files (true fact – my current attorney has a whole drawer in a filing cabinet dedicated solely to me) and review the latest information while talking to me on the phone. Of course, these attorneys don’t have legal secretaries or assistants, or they might be a little better organized. On the other hand, those attorneys with legal secretaries or assistants cost a whole heck of a lot more!

So, it turns out that, while I sent him a check to cover the filing fees, he charged the filing fees to his credit card and the courts only charged him $100.00 of the total $755.00 fee. (Yes, filing fees are that high. I once paid $1,600 to file an appeal.) The receipt he received back via fax did not specify what was charged to him, so until he received his credit card statement, had no idea what occurred. He filed an appeal, and the courts should certainly grant us a reinstatement.

And I’m still anxiously awaiting the ringing of the sheriff…

I just found out on Sunday that the mortgage company has filed a request for an order for eviction. It just makes the sheriff’s visit more imminent. At least I’m prepared.

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The government has announced some good news for homeowners. HAMP2 has been put in place – right on schedule – as of June 1, 2012. It is an expansion on the first version of HAMP, and expands the number of people who may be eligible to qualify, and also covers small rental properties.

I don’t want to enumerate all of the details here, as to who qualifies, but will highlight certain points of interest.

• “If you are not unemployed, but you’re still struggling to make your mortgage payments, you may be eligible…”

The fact is that many people struggling to make their mortgage payments are unemployed, or at least one person in the household has lost their job. Many others received ARM (adjustable-rate mortgage) loans, sold by scheming loan companies as a way to get more people qualified for mortgages to feed the monster securitized loan pool. When you have an ARM loan, you have low payments initially, but those payments balloon at some point, typically 5 to 10 years into the loan. So, if you got your loan during the height of the housing craze (2004-2006), your payments may be ballooning now. At the time you inked your name on the document, the plan was that you would refinance before the payments went up, because you would have established your good credit by then. With the tanking of the economy, credit terms have become very restrictive and it has become difficult for many people to refinance, virtually ensuring higher rates of default.

•  “Homeowners who previously received a HAMP trial period plan, but defaulted in their trial payments”…OR… “Homeowners who previously received a HAMP permanent modification, but defaulted in their payments, therefore losing good standing”.

(Find all the details here.)

Unfortunately, more than half of homeowners who received a modification at the beginning of 2009 defaulted again after 9 months. Many believe that this is because the modification didn’t go far enough. Many people just got their original loan principal extended another 10 years to drop the payment. Then again, who could have predicted that this recession would have dragged on as long as it has? Almost six years, with no end in sight. It’s no wonder that, in these uncertain times, so many people would have difficulty maintaining their payments. Fortunately, if you were one of those lucky enough to receive a HAMP modification but unlucky enough not to be able to maintain your good standing, you get a second chance. That’s a rarity.

Martin Andelman wrote a very interesting post last week, and I believe what he is saying is right. He has spent a lot of time interviewing people, trying to make sense of things over the years, and while I’ll let you read the full text here, the point he’s trying to make is that part of the reason there has been such an epic fail on the part of the banks and the government is that none of these actions have ever needed to be taken before. Yes, people have missed payments and been foreclosed on since the beginning of time, but in recent years, there have been different rules for lending that require different rules to deal with the fallout. And those rules were never developed. So why hasn’t anything more substantial been developed by now?

Most effective businesses take some time to ponder the pros and cons, or put together a SWAT analysis before launching a new product. Those businesses know that this is essential to their longevity. After all, they didn’t go into business to make a bunch of money then go out of business as soon as they had made enough. No, they want to continue to bring in the profits. And they know that there is no one out there who will bail them out if they make a bad business decision.

That is the key difference. The financial powers that be knew the government would bail them out, to preserve our economy. They were reminded of it every time they opened a new branch and put up a plaque that said “FDIC Insured”. When the barriers between standard banking and investment firms were dissolved, they became TBTF – Too Big To Fail. With their hands in every financial pot, it became impossible to segregate their influence from the economy as a whole.

I have an extremely difficult time believing that no one involved with the setup of the mortgage loan securitization process never said, “What is the worst outcome that we could possibly create?” or even, “How long can we keep this artificial bubble from popping?” and, even better, “Could what happened to S&Ls and junk bonds in the 80s happen again?” Hindsight is 20/20, as they say. Unfortunately, with so much history to draw on, it’s starting to be more like 20/100. If people would just take the blinders off and recognize that whenever variability exists, provisions need to be made to encounter any situations in which variability becomes the norm, rather than the exception. After all, it’s no secret that this country (and all countries) goes through periods of ups and downs.

So, yay that HAMP 2 is available, and I sincerely hope it helps more homeowners than HAMP 1 did. And not just a band-aid, either – I hope this makes a huge impact. Now, if we could just get Ed DeMarco of Fannie Mae and Freddie Mac to see the light and save us taxpayers some money, we could get some serious help for underwater homeowners!

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Anyone wondering what happened to their request for an Independent Foreclosure Review?

Probably not very many of you. Apparently, only 4.5% of people who were sent the form responded. You have until July 31st to respond. I don’t know how much good it will do, but it certainly can’t hurt to submit your information! You must call to request a form if you haven’t received one yet.