Foreclosure Hero: Man Pesters Executives, Saves Friend's House

Lee Castillo, 34, is an IT systems engineer with zero experience in the mortgage industry.  But when he found out that his friend had been scammed by a loan modification company and was a week away from losing his home, Castillo decided to get involved.
"He had been trying to work with CitiMortgage and OneWest bank to get a loan modification, and they made it extremely difficult for him, especially since English was not his first language," Castillo told HuffPost. "He came to me and said he needed to find a place to rent because the bank kept saying they didn't receive all the documents they needed and that they were gonna foreclose. So I said, let me look into this for you and see what's going on."

Castillo's friend in need, Julio Salazar, says he started losing income from his Falls Church, Va., hair-cutting business last March due to the recession.  When he could no longer afford his $1,700 monthly mortgage payments, he sought the help of Friendly Financial Services, a loan modification "specialist" in Miami.

The company referred Salazar's case to a mortgage lawyer named Robert Rosenwasser, who charged Salazar $2,300 up front and then failed to send in all the applicable financial materials to OneWest bank.

Homeowners are never supposed to pay upfront for loan modifications. Charging money upfront is illegal in Florida, and a federal ban on collecting upfront fees took effect Jan. 31. Frank Dorman, a spokesman for the Federal Trade Commission, told HuffPost that loan modification scams have increased with the recession to take advantage of increased foreclosure.

"We advise people to avoid any company or individual that requires a fee in advance, guarantees to stop a foreclosure or modify a loan, or advises the homeowner to stop paying the mortgage company," he said. "Many of the complaints received by the FTC include not being able to contact the company after paying for mortgage refinance services, not being able to get their money back, and not receiving proper help from the company after paying for services."

Salazar received no help after paying Rosenwasser the $2,300 fee.

"I got a foreclosure letter after three months," Salazar, 40, told HuffPost. "They took my money and did nothing."

Rosenwasser told HuffPost his employee did send in all the appropriate forms on Salazar's behalf and that Salazar must have had a "false impression of what was going on with his file," but OneWest bank confirmed that it did not receive a complete financial package from Rosenwasser and that he did not respond to their follow-up requests for more documents.

"Our loss mitigation services are free of charge," said David Rodriguez, a OneWest executive who worked on Salazar's case. "Anyone or any company asking for money up-front should be thoroughly examined before a customer agrees to pay for such services."

When Salazar said he was ready to give up and walk away from his mortgage, Castillo convinced him not to and promised to personally stop the foreclosure from happening. He became authorized to work on his friend's behalf, sent OneWest bank a complete financial package just weeks before the sale date, and started digging up the contact information of various bank executives to rally them around his cause.

"I met with the director at OneWest, I went to the president of Freddie Mac, the lender, and I even got Congressman Gerry Connolly's office involved," he told HuffPost. "You can get to these people in the executive offices. You have to be smart enough to navigate the web, but you can get ahold of them and pester the hell out of them until they do something. I said, 'Look, if you fix this and get this through, then I don't have to bother you anymore, but if you don't then you're gonna hear from me every day until we get this resolved.'"

It was a smart tactic: Banks are notoriously uncooperative with homeowners seeking modifications. Homeowners typically never speak to the same person twice when they call their banks.

One week before the sale date on Salazar's house, OneWest agreed to a permanent loan modification -- from $1,700 a month down to $850 -- and stopped the foreclosure.

Salazar says he immediately called Rosenwasser to ask for his money back, but the lawyer refused.

"I called them when I found out Lee was able to help me and I told them, 'You didn't do nothing. Give me half back,'" he said. "And they said no, because I broke the rules by having Lee call the bank. I thought that was funny -- I broke the rules by trying to save my house."

Despite having navigated a notoriously frustrating process and rescued his friend's home within weeks, Castillo says he is no hero -- he just did what any neighbor should do.
"I'm not a religious person, but I am very fortunate to have a really good job, and I think it's my duty as a human being, when another human being is going through a hard time, I need to step up to the plate and help," he said. "I think if we as Americans or neighbors or friends took the time to get to know someone and take on someone's cause, well, imagine if everybody did that?"