Hat tip to DS for sending in David Streitfeld’s article from the N.Y. Times:
DENMARK, Me. — The house that set off the national furor over faulty foreclosures is blue-gray and weathered. The porch is piled with furniture and knickknacks awaiting the next yard sale. In the driveway is a busted pickup truck. No one who lives there is going anywhere anytime soon.
In 2003, her brother-in-law at the time offered to sell her a house on property adjacent to his. It was across from a noisy construction supply site. But it was ringed by maple, evergreen and willow trees, and who does not want to be a homeowner, especially when GMAC Mortgage will give you a loan for the entire purchase price and then another loan to improve the property?
“I was very happy,” she remembered. “It was a new beginning.”
Nicolle Bradbury bought this house seven years ago for $75,000, a major step up from the trailer she had been living in with her family. But she lost her job and the $474 monthly mortgage payment became difficult, then impossible.
It should have been a routine foreclosure, with Mrs. Bradbury joining the anonymous millions quietly dispossessed since the recession began. But she was savvy enough to contact a nonprofit group, Pine Tree Legal Assistance, where for once in her 38 years, she caught a break.
Her file was pulled, more or less at random, by Thomas A. Cox, a retired lawyer who volunteers at Pine Tree. He happened to know something about foreclosures because when he worked for a bank he did them all the time. Twenty years later, he had switched sides and, he says, was trying to make amends.
Mr. Cox realized almost immediately that Mrs. Bradbury’s foreclosure file did not look right. The documents from the lender, GMAC Mortgage, were approved by an employee whose title was “limited signing officer,” an indication to the lawyer that his knowledge of the case was effectively nonexistent.
Mr. Cox eventually won the right to depose the employee, who casually acknowledged that he had prepared 400 foreclosures a day for GMAC and that contrary to his sworn statements, they had not been reviewed by him or anyone else.
“A lot of people say we just want a free ride,” Mrs. Bradbury said. “That’s not it. I’ve worked since I was 14. I’m not lazy. I’m just trying to keep us together. If we lost the house, my family would have to break up.”
It has been two years since she last paid the mortgage, which surprises even her lawyers.
“Had GMAC followed the legal requirements, she would have lost her home a long time ago,” acknowledged Geoffrey S. Lewis, another lawyer handling her case. GMAC, which this week expanded its foreclosure freeze to the entire country, is not giving up on Mrs. Bradbury. It will try for the third time to evict her when the case goes to trial this winter.
If Mrs. Bradbury is not quite victorious, she is still in her house, and for her that is the only thing that counts. If she can get her pickup fixed, she will go back to looking for a job. “I am not leaving,” she said this week, standing out on her front lawn, the autumn splendor spread all around her. “We have nowhere to go.”
http://www.nytimes.com/2010/10/15/business/15maine.html?pagewanted=1&_r=1&th&emc=th
“If Mrs. Bradbury is not quite victorious, she is still in her house, and for her that is the only thing that counts. If she can get her pickup fixed, she will go back to looking for a job.”
Jim, maybe you can loan her your Chevy?
Two thieves taking each other to court is always good entertainment.
Mr. Streitfeld, can you verify that she drives a Ford?
How can you work since 14, not pay her mortgage in 2+ years and not have the money to get a used car and an apartment to rent?
Excuse my skepticism. Is she snorting the money?
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“Jim, maybe you can loan her your Chevy?”
Maholo, 3rd Generation, for the chuckle. *Grin* I must remember not to be drinking anything while watching JtR’s videos or reading posts here on bubbleinfo. Looking into “keyboard insurance”…
@Josie, There are many people who live virtually hand to mouth in this country. Not saying such people make ideal homeowners, but that speaks to GMAC’s irresponsible loan practices.
I propose a new term to describe folks who have mortgages: controllers. That is, if you own your home outright, you own it – you’re an owner. If you have a mortgage, you’re a controller – you control it, but until you make your last mortgage payment, you don’t truly own it. If you rent, you’re a renter.
Mrs. Bradbury thinks because she has a mortgage that she “owns” the house when, in fact, she does not. She “controls” it until she either (1) stops making payments and gets foreclosed upon (which happened in her case), or (2) pays off the mortgage in its entirety.
She says, “If we lost the house, my family would have to break up.” Break up? Really? Won’t they just move to a rental? Are there no other residential housing units available in Denmark, Maine? This all sounds too far-fetched to believe.
I’m sorry Mrs. Bradbury is losing her home, but she’s got plenty of alternatives, none of which she seems willing to pursue. After all, she’s found a scape goat, so why bother?
Except, Ha, that isn’t legally accurate. The house is owned by the person you deem the controller. Go to the county records office (or whoever controls property recording in her area) and you’ll see her name. You’ll also see a note recorded. If the note were expunded (through subsequent agreement, pay off, litigation, whatever) then she would own the house free and clear.
It’s simple. She owns the house, but the house is collateral for a loan used to purchase that house. If she can’t pay the loan, the house goes to the bank and of course at that point it’s not hers anymore. This isn’t a new concept, it’s like thousands of years old.
The only thing really new is it now takes about 14 months to transfer the collateral to the bank. People are more than happy to work the system both ways here. The only thing off in her comments is her saying she doesn’t want a free ride but here she is sitting in her free ride. Otherwise it is what it is.
Well sdbri, that’s true at the basic level, but it misses out on the key issue, which is who owns the note and has the right to exercise the rights as the debt holder? After these mortgages were sliced and diced into a million pieces and sold as part of securities, who knows. That’s one of the issues. This isn’t I borrow money from Fred my banker and Fred and his bank come reclaim the house if default. This is I go to Fred my Broker who I never see again and isn’t my Banker. And the servicer may also not be my banker. In a foreclosure, the note holder has to prove they are the note holder. They can’t necessarily do that. That’s the new concept.
This is simply rushed and shoddy paperwork regardless of what was done to debt ownership. Two different issues here, I was just responding to comments about the concept of home ownership with a mortgage. There is a distinction between outright ownership, but that doesn’t mean we need to stop calling them owners. Of course, the lady’s comments certainly don’t help her.
OT – Jim, those two $0 sales were “all cash”. I didn’t find out the sold price because the listing agent of the previous transactions wouldn’t divulge that info to my agent since he had to pay a minimum amount to have it post at -0-. I surmise it may have been out-of-state buyers bringing cash from a previous sale. It makes sense to me. There are rumors that the state will become a disclosure state in the near future if pending legislation is signed into law.
Once again, mahalo for your always excellent counsel.