"I did not lose my home, they stole it from me," explains Bertha Herrera, 63-year-old chaplain from Van Nuys, Calif. Bertha was evicted from her home of 32 years at gunpoint by LA County Sheriffs on Jan. 5, 2012. An hour later, with her possessions spread out over the lawn she'd tended since Jimmy Carter was in office, while a dozen Occupy LA and Occupy the Hood activists helped gather her belongings, 10 LAPD squad cars arrived to "protect and serve" the crew Coldwell Banker had sent over to board up her house.
Bertha had been late on one payment.
"There must be more to the story," you might insist. Yes, plenty more. But first, check your assumptions. Are you thinking the homeowner probably did something wrong? Or are you thinking the banks and auction house and Sheriff and LAPD probably did something wrong?
While many are still content to blame their neighbors for "buying too much house," many more are peeling back the curtain to see what has really happened to their neighbors.
Even if you don't own a house or you're not staring down foreclosure at this minute, don't think you can skip safely past the graveyards of U-Hauls and lockboxes. The sheer scale of the fraud calls into serious question who owns what in America. It has collapsed the economy surrounding you. All of this directly affects you. Whistling while plugging your ears won't work for long.
You can start to see the whole picture by taking in one story at a time. Here's Bertha's story:
- Bertha bought the house in 1979, had refinanced twice and never had any problems making payments
- The last loan was to pay for unexpected medical costs
- Original lender sold her loan -- Bertha had had four different loan servicers in three years
- Bertha insisted on a loan modification because payments were applied to interest and rate was about to vary
- After Bertha pressed for months, bank rep suddenly pressured Bertha into signing a loan mod: bank told her she would not need to make payments for three months, faxed her only the final page, and gave her only 24 hours to return it signed and witnessed -- Bertha didn't get the full document until weeks later
- As agreed, Bertha didn't send June's payment. On July 5 she received a letter from the bank saying she'd broken the loan mod agreement
- She immediately sent payment, but the bank applied it to insurance and taxes, which she'd already paid. When shown proof, bank said they'd credit her account -- they never did
- The bank required an all-or-nothing lump sum of close to $7,000 in late fees plus the full mortgage payments
- Bertha hired an agent to help her, but the agent purposefully made payment arrangements out of Bertha's reach
- Bertha filed complaints with the Office of the Comptroller of the Currency, her Congressman, and the California Department of Corporations, which delayed the sale
- Bertha hired an attorney but they never filed anything in court, wanted an additional $1,500 a month, and told her, "The bank wants to know what it would take to get you out of the house -- they want you out by Jan 8." Bertha asked, "Whose side are you on?"
- The bank claimed they served a "tall, slender woman" with papers for default -- "I am 5 feet tall and I'm not slender," Bertha explains, "I was never served."
- The Bank of New York Mellon foreclosed and auctioned the home -- to themselves.
- Coldwell Banker posted signs on the door for Bertha's roommate: "This home is no longer owned by the person you've rented it from. Call us and we'll provide you with $6,000 in moving fees." Roommate's son sees the note and calls Coldwell. Bertha intervenes.
- On December 26th, with knock on the door, she was served notice of eviction -- exactly when everyone would be on vacation
- LA County Sheriffs evict Bertha with guns drawn on Jan 5.
In a nutshell, the bank used high pressure tactics to rush a signature on a loan modification for which they did not give her full documentation and flat out told her: "Don't send us any money for three months." When she skipped that first month's payment, the bank said she'd violated the agreement and started the foreclosure ball a-rolling. They refused to correct mistakes, delayed mailings and lied about the serving of paperwork.
Outrageous in itself, but that's not even the half of it.
The underbelly of the deceit is the stuff only mortgage geeks and auditors would understand. The banks hide mountains of fraud behind towers of mumbo-jumbo like "self-assigned" or "substitution of trustee." But there are plenty of plain old swindles to go around too such as destroying documents, misrepresenting products, forging signatures and magically recreating needed paperwork out of thin air.
A recent audit in San Francisco County by the county assessor-recorders office essentially declares foreclosure law to be extinct: 99 percent of foreclosures had questionable activity, 84 percent had a clear violation of law, and over two-thirds had four or more violations.
"Many of these actions, if not all of these actions, render many of these foreclosures invalid," said San Francisco County Assessor-Recorder Phil Ting. "California's foreclosure process appears utterly broken," says Lou Pizante, a principal at Aequitas, the consulting firm that performed the audit.
The families behind these statistics have had to struggle not only with the loss of their homes and life savings, but also with the heavy cloak of presumption of guilt that society throws over them.
"It's really a nightmare," says Bertha Herrera. "You think, 'I just need to go to this next person and they'll correct this obvious mistake.' There's always that hope... until you're evicted at gunpoint.
"It's like sleeping, dreaming, you want to wake up. When it looked clear that I wouldn't be able to hang onto the house, it's too late to make any arrangements, to pack, to look for another place. It's not the normal type of move where you pack slowly, label everything. It's all of a sudden, like a train wreck. There's not even time to get boxes. It's a horrifying experience.
"There's a lot of betrayal. You work a lifetime -- I was a social worker. I started up homes for women with addiction, was an advocate for children in the court system. I worked for women in domestic violence and for children with disabilities -- all this energy and effort for years and years.
"I arrived in this country in 1971 with one suitcase -- worked hard, saved up money. I put every penny back in my house to make it comfortable for me, my family, my grandchildren. You feel your country has let you down. The system that was supposed to be helping the people... by the people, for the people... is not there.
"You have stress, you're tired, then the adrenaline comes, then you collapse for a few days, you become lethargic. You wish you could become angry and throw punches, but who do you throw punches to?
"Who am I fighting against? They're hiding behind black walls. Everybody is helping them, no one is helping us. Judges help them, attorneys help them, government helps them.
"The bottom line is that there comes a time when there's nothing but despair.
"It is the most cruel form of abuse in the history of the U.S. -- if the government is helping the banks behind the scenes, may God have mercy on them.
"They may be getting rich -- anybody can rob and steal, that is not heroic -- that is a shameful blemish on the financial system of this country. If I were a wife of one of those bankers, I wouldn't even dare... how can they drive their fancy cars and wear their minks when they're destroying families?
"Anyone can be a delinquent, anyone can be a gangster -- they are nothing but gangsters.
"We have 13 million people having post traumatic stress disorder. When they wake up out of their mesmerizing experience and snap?... I would be very frightened.
"The hope that God is for justice... that's what keeps me together. The reason I continue to be a part of the [Occupy] movement is that I have grandchildren -- I want this nonsense to stop -- I want to see them have the promise of tomorrow, not this usurping, greedy system -- it may be a pebble in the pond, but it will cause ripples."