[nfb-talk] A Worthier Cause

Tue Dec 7 03:12:42 UTC 2010

PS: The same applies to investment companies.  I took out an IRA one year 
and tried putting it in an online trading site to manage myself. (I 
recommend avoiding that as well. It can be a time waster and a money pit if 
you don't stay on top of it.) Anyway, I left my account alone for a year or 
so as we moved and I just couldn't deal with it. But I got an email 
(fortunately not paper) saying that if i didn't contact them they would put 
my account in unclaimed status and I would have only a short grace period in 
which to claim it, after which the company would own it.  I was appalled. 
How could they claim my IRA???
Which reminds me, I need to get that money out of there and roll it overto 
something else.
Anyway, thought I'd mention it.
--le

----- Original Message ----- 
From: "Joe Orozco" <jsorozco at gmail.com>
To: "'NFB Talk Mailing List'" <nfb-talk at nfbnet.org>
Sent: Monday, December 06, 2010 3:45 PM
Subject: [nfb-talk] A Worthier Cause

Maybe ABC should consider devoting its show to topics like the one below
rather than trying to help isolated families but do not help the problem.
Sorry for the off-topic post, but it's in the realm of what our office does,
and I thought it might help us explore other aspects of the popular subject
recently discussed.--Joe

December 3, 2010

A Happy Ending to a Raw, but Common, Tale

  By JOE NOCERA
<http://topics.nytimes.com/top/news/business/columns/josephnocera/?inline=ny
t-per>

Lilla Roberts is a 73-year-old retired physical therapist, a pleasant,
engaging woman who moved to this country from Jamaica 46 years ago. In 1988,
she bought a small house in Jamaica, Queens, putting down $25,000, and
taking out a mortgage for around $120,000. For many years, she religiously
made her mortgage payments.

Like most homes in this part of Queens, this one is a little on the
ramshackle side: a small, two-story home, part brick, part faded gray
siding, with a red awning out front and a large backyard. But she raised her
children and several of her grandchildren in this home. Her life's memories
are in this home. It means a lot to her.

"My whole life is here," she said on Tuesday, when I visited her. "Every
penny I ever had I put into this house."

Ms. Roberts pointed down. "I finished the basement," she said. She pointed
up. "I had to put in new windows and repair all the rotting wood," she said,
referring to an upstairs apartment she rents out.

She pointed toward the back of the house, to the yard beyond her cramped
kitchen and her two crowded bedrooms. "I love my garden," she said. She
paused, and then sighed. Between her pension, Social Security
<http://topics.nytimes.com/top/reference/timestopics/subjects/s/social_secur
ity_us/index.html?inline=nyt-classifier>  and rental income, she said, "I
have enough income to pay my mortgage. I would love to enjoy the rest of my
life here."

Sitting across from Ms. Roberts was Elizabeth Lynch, a 30-something lawyer
who works for MFY Legal Services. Ms. Lynch is a foreclosure specialist who
has spent the last few months trying desperately to keep Ms. Roberts from
losing her home. In 2007, a year after a refinancing, Ms. Roberts suffered a
temporary setback that caused her to stop paying her mortgage for less than
a year. Given her situation - steady income, a history of reliability - you
would think that she would be a perfect candidate for a mortgage
modification.

Instead, her servicer, Bank of America
<http://topics.nytimes.com/top/news/business/companies/bank_of_america_corpo
ration/index.html?inline=nyt-org> , foreclosed on the property in late
August and handed it off to Fannie Mae
<http://topics.nytimes.com/top/news/business/companies/fannie_mae/index.html
?inline=nyt-org> , which owned the mortgage. Ms. Roberts first learned this
when she saw Fannie Mae's eviction notice taped to her front door.

As part of her effort to save Ms. Roberts' house, Ms. Lynch filed a lawsuit
to undo the foreclosure, on the grounds that fraud had been committed at
various points along the way. Although such suits rarely succeed, a judge
agreed to hear the case in early January.

Another part of her effort, though, was to try to create some media
interest, which is how I got involved. "With all of the foreclosure cases I
have seen," Ms. Lynch wrote in an e-mail, "this is the one that gets at me
the most."

Truth to tell, Ms. Roberts's story got to me too. Even putting aside the
possibility of fraud, nobody should have to endure what she's been through.
Since March 2008 - that's right, two and a half years - she has spent nearly
$30,000 trying to hold onto her home. She has had to deal with a nasty
foreclosure mill law firm, with servicing employees who gave her the
runaround and with a foreclosure process that took place behind her back.
And she has had to deal with the anxiety of not knowing whether she would be
able to keep her home.

Yes, there are people who took out mortgages knowing they could never pay
the money back. Ms. Roberts is not one of them. Rather, she is one of the
many Americans, mostly poor and lower-middle class, who have been devastated
by a system that is as rapacious, uncaring - and sloppy - in tossing people
out of their homes as it once was in foisting predatory mortgages on them.

Two days after I spoke with Ms. Roberts, Bank of America and Fannie Mae
acknowledged that foreclosing on her home had been a mistake, and they vowed
to give her back the house. "We are going to work with her on a loan
modification
<http://topics.nytimes.com/your-money/loans/loan-modifications/index.html?in
line=nyt-classifier> ," a Bank of America spokesman promised.

Yet, while Ms. Roberts's story has a happy ending, it is hard to get too
excited - not when so many others are in the same awful place, losing homes
as much because of the system's callousness as because of their own
precarious finances.

.

Ms. Roberts's troubles began with the rotting wood and upstairs windows. In
2006, her longtime tenant, who paid her $600 a month, moved out; she needed
to fix the apartment before she could get a new tenant. The only way she
could afford it was by refinancing her home.

The company that gave her the new mortgage was a now-bankrupt outfit,
Mortgage Lenders Network, which a former employee described to me as "one of
the bad actors" during the subprime bubble. It is hard to know now what kind
of mortgage Ms. Roberts got; although it had a fixed interest rate below 6
percent, Ms. Roberts recalls having very little cash left over after the
repairs were made - even though, at more than $300,000, the new mortgage was
more than double the size of her original mortgage. Her new monthly payment
was around $1,700 a month, a $500 increase. But with a new renter paying
$900 a month, she felt it was well within her means.

Sometime in 2007, however, the tenant stopped paying his rent. Thanks to New
York's tough rental laws, she couldn't easily evict him. Without that $900 a
month, she couldn't make ends meet and still pay her mortgage. Thus it was
that in March 2008, she requested a mortgage modification from her servicer,
the Wilshire Credit Corporation, a division of Merrill Lynch
<http://topics.nytimes.com/top/news/business/companies/merrill_lynch_and_com
pany/index.html?inline=nyt-org>  that specialized in delinquent mortgages.

What happened over the course of the next few years can only be described as
Kafka-esque. Wilshire Credit asked her for a hardship letter; she sent one.
Nothing happened. Three separate times, Wilshire set up short-term payment
agreements - two of which included $7,000 upfront payments - claiming that
it would make a decision on a long-term modification once the agreement
expired. She paid every penny - to no avail.

Sometimes, when she was between short-term agreements, Wilshire would refuse
to take her check. Sometimes, it cashed them. Sometimes she was told her
request for a modification had been denied. Other times she was told it was
being considered. At one point, the foreclosure mill law firm of Steven J.
Baum, which represented Wilshire, tried to get her to waive her legal rights
as part of the third short-term agreement. (The firm would not discuss the
details of the case on the record.) All the while, behind Ms. Roberts's
back, Wilshire was inching toward foreclosure.

In March 2010, Bank of America, which got Wilshire when it bought Merrill
Lynch in 2008, sold the servicing company to I.B.M.
<http://topics.nytimes.com/top/news/business/companies/international_busines
s_machines/index.html?inline=nyt-org>  As part of the deal, though, it kept
Wilshire's servicing clients.

Was life any better with the mighty Bank of America now servicing her
mortgage? Not a chance. Bank of America took her money in May and June. But
in July and again in August, a bank employee told her not to send a payment
because the bank was close to offering her a new repayment plan. Instead, in
late August, the bank foreclosed and turned the property over to Fannie Mae.

After taking on Ms. Roberts's case, Ms. Lynch uncovered the unseemly back
story - a story that is playing out in poor neighborhoods all over the
country. She found clear evidence of robosigning. She also discovered that
the transfer of the mortgage from Mortgage Lenders Network to Wilshire
appeared to have been backdated by two years - making it appear that it took
place before M.L.N.'s bankruptcy. Assets cannot be sold by a bankrupt
company without the assent of a trustee, thus suggesting that the transfer
of Ms. Roberts's mortgage might have been improper. And she found evidence
that Ms. Roberts had never been served with the foreclosure papers -
something Ms. Roberts swore to in an affidavit. These are the grounds for
her lawsuit.

But as I discovered when I began asking around, the story is even worse than
that. Why did Fannie Mae begin eviction proceedings? Because Bank of America
claimed, wrongly, that Ms. Roberts was a deadbeat who hadn't made a mortgage
payment since March 2008. When Fannie Mae asked the bank to double-check,
Bank of America simply repeated this false information. In other words, Ms.
Roberts was being thrown out of her house because of Bank of America's
carelessness.

Stunned at what I was hearing, I sent James Mahoney, a bank spokesman, a
copy of Ms. Roberts's legal complaint, which documented all the payments
she'd made over the year. Less than 24 hours later, he called to tell me
that the bank had requested a "rescission" of the foreclosure sale to Fannie
Mae - and that "this decision is receiving favorable consideration from
Fannie."

To Mr. Mahoney, this reversal showed that Bank of America was trying to do
right by homeowners. "We have made 700,000 mortgage modifications this
year," he said. He described the bank's willingness to give Ms. Roberts a
loan modification as a "microcosm of Bank of America's role" in the
foreclosure crisis. I agree that it's a microcosm, though not necessarily in
the same way that Mr. Mahoney does.

To my surprise, when I called Ms. Lynch with the good news late Thursday,
she did not jump for joy. Although she was pleased for her client, she was
furious at what she saw as Bank of America's presumption.

"It's offensive that BofA thinks a foreclosure action, an eviction notice of
an elderly woman sitting in her house fearing that she will spend the
remainder of her days in a shelter, is some sort of party invitation that
can be 'rescinded,' " she wrote in an e-mail. "Their disrespect for the law
is appalling. But it is a pattern of behavior that led to this crisis and
that is continuing to keep this country in this crisis."

Let's face it: Ms. Roberts got a break. Because she had a dogged lawyer, who
had the wit to get a New York Times columnist interested in her case, a
terrible mistake was uncovered. As a result, an unjustified foreclosure may
well be reversed.

But it has to make you wonder how many other people have lost their homes
because of similar mistakes. I can't bear to venture a guess. It's too
sickening to contemplate.

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