Foreclosures: The Scam Continues

For millions of Americans, owning a home is the grandest symbol of accomplishment into the illusion of the “American Dream”. In the United states, we have been indoctrinated to believe being a homeowner signifies success, financial stability and responsibility.

My former husband and I had been renters a few years before the thought ever crossed our minds to look into the prospect of home-ownership. Mostly out of curiosity, we decided to meet with a mortgage lender to see what qualifications (if any) we had and see what the whole lending process entailed.

We set up an appointment with a small local mortgage lender who was sly and charming and offered us a loan right off the bat; seeing that we were both employed and our credit checks came up with decent scores.

We were so disillusioned and eager to have a home of our own for ourselves and our two small children that we short-shortsightedly signed onto a mortgage that was affordable, but still a heavy financial burden. Not convinced by the lender to take on a sub-prime 80/20 loan, interest only or a no-doc loan; (as was originally presented when we first applied and has been the main focus on the burst of the ensuing housing bubble) a conventional Fanny Mae/Freddie Mac loan was readily available with 0 percent down. We completed all the paperwork and the transaction took place in June of 2008, only a few months before the begging of the housing market crash.

Not even a month had passed since we moved in when we received notification via mail from our local mortgage lender that the loan was being sold to a different company called Franklin American. Shortly after that, we received another notice that our mortgage was being sold yet again to Countrywide Financial, which subsequently was bought out by Bank Of America a very short time later. Then the city In New Jersey we moved to sent a letter stating there will be new a tax assessment of all the homes in the area. The result of the new appraisal blindsided us: our home was devalued by 65,000. We were now considered an underwater loan by 124 percent.

Our marriage fell apart soon after for mostly personal reasons (the recession played a major role as well) and the balance of the loan was placed solely on my shoulders. I was relieved to hear that President Obama had signed a new bill to help homeowners like me called the “Making Homes Affordable Program” a.k.a. HAMP, and that it was geared specifically to help struggling underwater homeowners stay in their homes by coming to an agreement on a loan reduction between the lending bank and the homeowner. Seeing as my hours at work were reduced due to economic downturn, and I had lost an entire half of our family income due to impending divorce, I considered this program as a godsend.

I had wasted no time in researching all the details and according to the guidelines, not only did I match all the criteria, but I seemed to be the perfect candidate for it. It was a relief I would be able to keep the roof over my children’s head, eliminating the ongoing fear of escalating debt and homelessness.

First came the initial phone call; which included a very emotional breakdown between myself and the Bank Of America customer service representative. The call delved into my personal life so deeply; I had to start from the beginning and explain to her every detail of my finances and my failed marriage. The customer representative was very understanding and helpful and guided me through the process of applying to the program and the paperwork to fill out arrived within a few days.

I had to provide the Bank Of America with a complete financial summary (calculated by an outside non-profit company Money Management International) in such vivid detail; even down to how much I spent a month to feed my dog, fill my car with gas, and clothe my children. Next was the tax returns, copies of my paychecks and partial-unemployment checks, and finally the “hardship letter” that was advised to me to be a hand-written letter explaining the financial burden that I had fallen into. The good news was, Bank of America agreed to let me pay $400 less a month while they reviewed my application thus relieving my finances to allow me to stay afloat.

All the tasks that were asked of me were completed and faxed over in a timely manner. Nine months plus went by, every payment made on time and in full at the reduced price, and no word on my application. I routinely called Bank of America to check up on my status, but all they ever told me was that they are very glad I am showing interest in my modification and that they would note on my file that I am an active participant in my case. A few times they requested duplicate papers that I had already sent in, but just as a precaution asked for them again and I had it faxed to them the next day if not sooner.

The response letter from Bank Of America arrived like a package and I even had to sign for it. I read each word slow and clear, careful not to misinterpret, and then I saw it, shocked like a confident student who just failed an exam: DENIED. The letter stated that I was denied entry in to program due to incomplete paperwork on my side and I had to now pay back all the money they were gracing me for the past nine months, equivalent to about $4,000.

I immediately made a phone call and asked every question I could to see exactly why I was denied. I demanded to speak with the supervisor and when I finally reached him (after about an hour) he kept repeating that they did not receive the necessary paperwork from me. I frantically debated him over this matter and the only result of the conversation was me filing for an appeal. I asked if I could pay the reduced price during the appeals process and he advised me that that was not an option. He also explained to me that if I did not pay back the graced $4,000, they would report to the credit companies that I am behind on mortgage payments and unless remedied, foreclosure proceedings would begin.

The word echoed in my head over and over… foreclosure. Foreclosure meant my kids would be without a home. Foreclosure meant I would have ruined credit. Foreclosure meant I would have to start all over again. Foreclosure meant that I failed.

I started doing heavy research into other homeowner denials by the mega “too big to fail banks”(with the short list of recipients consisting of Bank Of America, Wells Fargo, Citigroup, and J.P. Morgan Chase) and TARP (Troubles Assets Relief Program).

TARP is the program signed in by President Obama in 2008 that gave $700 billion to the leading mortgage lending banks with the most loans in default. According to the president, only “responsible borrowers” should be allowed to receive HAMP modifications which excludes owners of multiple and muti-million dollar homes and extreme debt-ridden families. The government then gave the banks the power of the final decisions of who, in fact, will receive a modification on their loan with government funded cash via taxpayers.

The biggest problem with TARP was indeed the fact that the greedy mega-banks were in charge of helping homeowners and were left unregulated to do so. The result of such careless oversight was that as of May 2012, 4.3 million people had applied for aid, but only one million had received any help from government sponsored program such as HAMP. Also, it is reported that over four million families have lost their homes to foreclosure since the beginning of 2007 to now; with the hardest hit areas being Nevada (Las Vegas being the leader with 1 in 9 homes in foreclosure and Reno with 1 in 16), Florida (with eleven major cities in the top 25 worst cities to be hit with foreclosure), California (eight major cities listed in the top 25), Arizona and Idaho.

Whistle blower complaints have been filed over Bank Of America stating that “The bank and its agents routinely pretended to have lost homeowners’ documents, failed to credit payments during trial modifications and intentionally misled homeowners about their eligibility for the program”. Many Americans were being denied for the very same reason I was denied. Also, in 2009, Bank of America was caught bullying eligible homeowners of HAMP into their own private and more expensive modification programs, which is a violation of the terms for HAMP.

With all of this data in my back-pocket, I made the decision to not give Bank of America another dime until they accept me into the HAMP program. I waited patiently while my loan went into default and in the meantime the bank sent their photographers out to take shots of my home to see if it was still occupied and maintained. I questioned a man I caught taking photos, and on him was my entire case history. The man was a third party hire, not working directly for Bank of America but for a local construction company. Next were the annoying phone calls that began trying to scare me into making payments that drove me to remove my land-line.

Four months later, Bank of America had results on my appeal: DENIED. The reason this time was that I failed to meet the financial qualifications. Very ironic to be denied entry into a program that was supposed to help struggling homeowners that were hit by economic difficulties.

I made yet another phone call to the bank, this time demanding to know what I can do to stay in my home. Since I am a waitress by trade, they said if I claim more tips on my tax return I could put myself into a higher tax bracket and therefore make the cut off for the program, whether or not I actually made that money. Also, they said I should take on a roommate or offer someone to live in my home and help me pay my mortgage. Fraudulent advice?

Another option they offered was short sale. With this type of transaction, the homeowner must stop making payments and fall behind (this fact did not bother me considering I was already behind in payments). The short sale process can be long, painful and subject to the whim of the bank and the buyers. Many people I have spoken to about short sale told me they were in the selling process, only to be denied for one crazy reason or another right before closing.

The bank also tried to convince me into Deed in Lieu of Foreclosure, meaning I just hand over the house and deed and walk away, but the major problem with that would be, I would still have bad credit and nowhere to live.

I was about to give up, sign on for a short sale or Deed in Lieu and move out, when I stumbled across an article from Zerohedge that led me to a campaign for homeowners that are demanding they see their original mortgage note to prove the bank does/does not hold onto it and therefore may/may not be able to foreclose .

This was something I never heard of before since my war with the bank began, and considering my mortgage was sold three times, I could be a potential victim of fraud. I sent an email to Bank Of America, as provided by the Zerohedge article, demanding to see my note and they did respond in the twenty days they are required by law to do so. I received in response to my inquiry a copy of my mortgage note via mail which was not what I was asking for. I myself have a copy of my mortgage note and I requested to see the original wet-ink note that they should have on their files. I offered to meet a courier within a hundred miles from my home just to prove to me they have it and their answer was that they were not required by law to show me the note, even if I asked for it. I have every right to see my bank note with my signature on it, especially in these circumstances so I sent them another email request to see my note and was denied yet again. This sort of dodging behavior was leading me to believe that Bank of America didn’t have possession of my note and therefore may not have any legal possession of my home.

It was right about this time that I had a final bomb drop: I listened to a report on National Pubic Radio (NPR) that banks can come back and sue short sale/foreclosure victims for the default money owed even many years after the cases are closed if there is a financial asset the bank can sue for. So now not only are Americans facing the nightmare of foreclosure, but we even have to face the fact that they could possibly sue us after-the-fact as well.

So the question I raise is, why are we letting this happen to us and why didn’t the Obama administration do more to help? Many critics have come out to say that the unregulated flow of cash that the mega-banks received to help troubled homeowners and the fact that these banks have not been using the funds as was suggested, was the greatest mistake the Obama administration has made to date. Officials in the administration have said in response that they did what they could with the way the banking and mortgage industry is set up and due to opposition, could not do more.

So what can defaulted homeowners do to stay in their homes and fight off the bank’s constant harassment? First, stay calm. Second, stay in your home. Third, do NOT send the bank any money. Fourth, contact (in writing) your mortgage lender to see your original wet ink mortgage note. More than likely they will deny your right to see it and that is okay; that is the first step that they are admitting they probably don’t have possession of it.

Fifth, if the bank does not agree to let you see the note then sit tight and wait for the sheriff to serve you formal foreclosure papers (and don’t worry, this is not the Old West so don’t be afraid to answer your door. You are not the criminal here, the bank is). And also know, before the sheriff arrives, you technically are not “in” foreclosure but what the banks are calling “pre-foreclosure”.

Sixth, do some research. The internet is the best way to find out all the updates and information on your state’s foreclosure proceedings. I know that here in New Jersey, the sheriff sale of a home is an average of 900 days after the sheriff serves foreclosure papers; which leaves plenty of time to see a lawyer or talk to an advocacy group about your ordeal and be offered some resources you may be able to use.

Seventh, if you have a lawyer in your area who will give you a free consultation, do it. Most likely if you are in foreclosure you cannot afford a lawyer, but at least you might get some legal advice for free on what your next step could be. Foreclosure advocacy groups are popping up all over the country in response to the housing market and bailout scams as well. When searching for an advocacy group in your area, always look for one that is non-profit; most likely ending in .org and not .com. Also look into your states squatter’s rights, especially if you have children.

One thing to keep in mind, this is war between the big banking cartel and you. It all might seem like a frightening place to stand, but you really do have more power than you think. Knowledge is truly power and the most you can do is arm yourself with the know-how to fight back. The reality is, unfortunately, you might lose. A new law could very well pass to force defaulted homeowners out of their homes, but in the meantime live your life as normally as possible; enjoy your children, savor your favorite meal, dance around at a concert, laugh at your high school yearbook picture and have in your back pocket a viable plan B, C, and D just in case you may need it.


Editor’s Note: Andrea Egizi is a journalist who focuses mainly on the the issues of ethics, equality and human rights. She is currently working on a novel. She is a seasoned front line activist and regular contributor to Raging Chicken Press. You can find Andrea on Facebook and Twitter. Photographs one, two, four, five, seven, eight and nine by Steve Rhodes. Photographs three and six by Alex E. Proimos.




15 Responses to Foreclosures: The Scam Continues

  1. Mack Knife October 22, 2012 at 4:10 pm

    Unbelievable. First you blame the mortgage broker because you didn’t conduct any due diligence about a mortgage. Then you blame the recession in part for your divorce. I’m waiting for the blame cast onto your parents for the lousy childhood.

    Basically, your life if a train wreck and everyone including the long dead are to blame for everything.

    Have you considered that you are stupid, your spouse left you for good reason, your lack of performing even basic research got you into financial straights and the government isn’t your mother?

    • aegizi October 22, 2012 at 5:14 pm

      Hi Mack. Looks to me someone spilled you bottle of Jack Daniels this morning as you went to pour it in your coffee mug. Can you get any more ignorant? First off, I didn’t blame the mortgage broker for anything, I just said he was sly and convincing. Second, when did I say I did no research? I obviously did when I didn’t take on the sub-prime loan that he originally wanted me to. And who doesn’t fight over finances? I bet your wife (if you are married() just loves your happy outlook!

  2. Mack Knife October 22, 2012 at 4:19 pm

    Also, you know you signed the mortgage papers so asking to see the original is just game playing, isn’t it? I wonder how your ethics stack up next to the bank’s which you claim is underhanded.

    People like you are what caused the housing market crash. Instead of learning about the housing market, only getting a loan which you could repay even in the event of divorce or one spouse passing away, you bought more house than you could afford. Now you cry about it, write books and blame everyone else but yourself for problems you created.

    No one made you buy a house and no one is to blame for your divorce, both were personal decisions but as it seems, were not made by an adult.

    • aegizi October 22, 2012 at 5:25 pm

      And furthermore, there is no game played, the mortgage/foreclosure market is game enough. And to say people like me cause the market crash, and not Reaganomics is one of the most uptight and ignorant statements I have ever heard. Please do me a favor Sir Mack, GROW A HEART

    • Matt Janovic November 4, 2012 at 2:04 pm

      Who are you really, “Mack”? Everything that Andrea wrote here is exactly what tens, more like millions of Americans are experiencing right now. You proffer no factual information. For example, when she mentions that the banks probably (probably? They don’t, and there are many other examples in non-partisan studies and the press just like hers)don’t really hold her mortgage, she’s stating only what she experienced. There’s little reason to believe this is an atypical experience, but forget you, we don’t care what you think and will be voting accordingly on Tuesday.

      Who are you really? Do you work for a bank, affiliate companies, or a related contractor, law firm, PR firm, in this game of mortgage banking fraud? What you’re doing is advocating widespread, systematized criminality. What does that make you except a liar and conflater spouting baseless hyperbole, lies?

      Crawl back under that corporate rock you slithered from. We don’t care what you think. You are a criminal.

  3. Hossein Turner October 22, 2012 at 5:17 pm

    Mr Knife,

    Your complete lack of constructive criticism and your ad hominem and general vile discredits your post entirely. I suggest you learn how to be a decent human being, before commenting on articles in the future.

    And to condemn Andrea for a mistake – for being preyed on by leverage fraudsters who went on to destroy the world economy by selling toxic assets to other banks which were fraudulenty rated “Triple-A” by complicit ratings agencies; is really silly of you. To pass the blame on to hard working people for the state of the economy, very asinine. Sure – there are irresponsible people who make mistakes and do not learn from them. But Andrea is not one of those people. You should also understand the fact that the lender violated the terms of “due diligence” so as not to deceive. Think I’m making this up? Go on Youtube and search for “Paul Moore HBOS whistleblower” to hear it from the lips of a senior British banker.

  4. Dorothy October 22, 2012 at 5:31 pm

    You are talking to the author like she is the only person that this has ever happened to but I know several people personally that have been screwed royally by the banks and thrown out of their homes in much the same manner that this transpired. And if you bother to read any real news you would know that this is going on all across the country to thousands of people. Actually I was wondering if you were one of those mortgage brokers cause you sure lack the compassion that most normal people have.

    • Kaye Wolf October 24, 2012 at 7:02 am

      Hi Dorothy: I accidentally hit “thumbs down” when I meant to hit “thumbs up” on your reply. (Early, no coffee, and wordpress has their thumbs backwards!) I like your comment.

  5. Devastatedhomeowner October 24, 2012 at 8:26 am

    The psychological effects of the banks behavior is irreversible. Can anyone site published or unpublished cases? I was told that this part alone will have attorney’s bypassing insurance cases and pressing forward for big settlements! Record your conversations with the banks.

  6. QueensForeclosure October 26, 2012 at 7:15 pm

    The author is a perfect example of how and why the “housing bubble” burst.

    politicians like Barney Frank & Chris Dodd insisted that the fact that credit worthy borrowers got homes and less credit worthy borrowers were being cheated out of their “fair share” of the American Dream because of the evil banks Red Lining.

    Why would anyone be surprised that after having the government force the banks to make home loans to people who could ill afford it, the banks figured out how to devise a system where they could DUMP the worthless paper they were forced to write?

    The truth my friends is actually where it always is – somewhere in the middle.

    Many people willingly, and knowingly took loans they couldn’t afford while relying on the ever increasing rise in real estate prices to keep them out of trouble. That worked quite well for a time, until real estate prices began to plateau.

    Once that happened and homeowners couldn’t refinance their way out of trouble the proverbial crap hit the fan, and the rest is history.

    Who could blame Andrea and her estranged husband for wanting their fair share of the American Dream?

    I disagree with the assertion that a tax re-assessment put their house underwater. Those assessments are never accurate and are simply manipulated to create revenue through an ad valorem tax.

    But I am sure it didn’t take long for the house financed at 100% to go underwater after the collapse.

    Put the blame where it really belongs – at the feet of the bleeding hearts who insisted that everyone get their “fair share” of the Dream.

    Be warned now, there are more Fair Share policies coming your way……

  7. Mike October 30, 2012 at 1:14 pm

    I can’t believe you think you are a victim here. Trying to keep something you haven’t paid for makes you just as big a scumbag as the Goldman Sachs of this world.

  8. David November 1, 2012 at 11:06 am

    The reason that the lenders are unwilling to work with the home buyer is this: The mortgages are insured and the properties have to be foreclosed upon before the insurance will pay off the mortgage. The money lender gets the principle of the loan returned and gets the property also. Essentially getting the property for free! That is one reason they give mortgages to those that can’t afford them. Biggest scam in history! Any elected official HAS to be aware of this. It is so obvious as to what is going on. In 2008 the taxpayers bailed out AIG, the insurance group that underwrote the mortgage insurance policies for FHA loans.

  9. Susan November 1, 2012 at 11:18 pm

    Don’t worry you still have time to accomplish your American dream , just stop making mistakes again and again and stop tripping over them again, be careful in your analysis before getting into a deal ,and trust no one but God ,have faith!, there are good companies and better trustworthy brokers look around you properly.

  10. NoMoreBailouts November 2, 2012 at 11:38 am

    Wow Andrea. You are really deluded if you think somehow the banks or government owe you to keep you in “your” home. You took on a house with zero down, got divorced and so had your income cut in half or more and now you’re blaming the banks for kicking you out?

    The banks have done an awful lot wrong but two wrongs do not make a right. I’m still renting and I make considerably more than a waitress but we are not willing to get sucked into the mortgage trap.

    When your financial situation drastically changes and you can no longer afford your mortgage payments does the rest of society owe you a handout? Is that how it’s supposed to work? Are the rest of us who are working hard and renting supposed to subsidize the misfortune of your divorce?

    I don’t appreciate bailing out bankers but I also don’t appreciate bailing out home(loan)owners who can’t afford to live in the homes they’ve taken on with easy financing.

  11. aegizi November 4, 2012 at 5:47 am

    I don’t feel like I am “owed” anything. The fact that I divorced during a mortgage is just an added scenario. The HAMP program was set up TO HELP PEOPLE like me, but was a scam. I would have gave up and sold LIKE I SAID in the article (if anyone took the time to read it) and walk away from the house but because there was a program fresh out designed to help, I was going for it so my kids could be housed. I personally do not care where I live, I just wanted some stability for my children. Does this make me a scumbag like Goldman Sachs? I guess so in your blame-game world.

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