ESOP Host’s a Successful First Membership Meeting

Cleveland, OH–
Community leaders from throughout the State of Ohio gathered together on Thursday March 24th, 2011 at ESOP to discuss issues effecting their communities. Leadership’s resounding theme was that, “decisions are made in our communities, where we live, work, and worship, without our consent.” Leaders from throughout the state talked about issues with elected officials, development groups, and non-profits who are NOT serving their communities.

Leaders from Hough, Mt. Pleasant, Central City (Toledo), Buckeye-Larchmere, among many other neighborhoods, created a plan of attack on what they want to see done in their communities. Their plan including working with law enforcement, holding elected officials accountable, and working to save habitable vacant houses and demolish inhabitable vacant houses. The group is ready to move into action, including holding US Bank accountable for the millions of dollars they owe the City of Cleveland and taxpayers for back taxes and demolition costs on US Bank owned properties.

Our next step is to host a US Bank specific meeting on Tuesday April 19th 2011 at 6:00pm at ESOP (3631 Perkins Ave.) to discuss issues with US bank owned vacant houses and issues homeowners with US bank mortgages are currently having. This meeting is just the first in a series of monthly membership meetings ESOP’s community organizing team (COT) is having to engage ESOP homeowner’s in ESOP’s community organizing efforts.

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ESOP is a HUD Certified 501(c)3 non-profit foreclosure prevention and community organizing agency. ESOP’s mission is to create organized leadership around issues that impact neighborhoods life. ESOP has ten offices throughout the state of Ohio and has helped over 16,500 homeowners save their homes from foreclosure since 2005. For more information about ESOP and it’s community organizing efforts please contact us at 216.361.0718 ext. 1009 or organize@esop-cleveland.org

US Bank: ‘We still can’t help’

In April, I wrote about a community meeting that went quite badly with US Bank reps. Afterward, I profiled Gregory and Deborah Matthews, homeowners who keep getting screwed over.

We believe US Bank misapplied payments on the Matthews, then filed foreclosure and made them move out of their house in the middle of January.  Then they realized they’d made a mistake and told her she could move back in — to broken water pipes because US Bank hadn’t secured the property.

At April’s meeting, ESOP demanded US Bank to address the Matthews’ case – and many more like theirs — with a sense of urgency and responsibility. The Matthews were promised a call by the end of the day. To US Bank’s credit, they did call, but with more of the same old. Gregory’s unemployment didn’t qualify them for a loan modification and Deborah’s full-time earnings at a non-profit weren’t enough. A denial letter was sent out.

A foreclosure mediation hearing later that month also went nowhere. According to the Matthews, an attorney for US Bank continually interrupted the court magistrate and said that the Matthews were never told to move out of their home. The magistrate, unimpressed with US Bank’s conduct and lack of communication, told the bank rep to keep looking into the Matthews’ case.

Deborah says that during the mediation hearing she asked for an itemized breakdown from US Bank of her payment history to see how and where her payments had been applied, especially since US Bank now wants another $16,000 in full. That was seven weeks ago and nothing has yet been received.

Given the egregious mishandling of the Matthews’ case, we think US Bank needs to do better for this family. Instead, US Bank is threatening to take their home to auction at sheriff sale within a matter of weeks.

In the words of the ESOP Counselor who works with the Matthews, Leannea Taylor: “US Bank’s accountability to their customers really sucks. I know that not all homes can be saved from foreclosure, but these folks, in my humble opinion, have done everything to try to work with the bank in every possible way to figure out a way to save their home and it’s ridiculous what little they have received in return for their tremendous efforts.”

Now the Matthews are on the verge of declaring bankruptcy and Deborah believes they are closer than ever to losing their home because US Bank won’t bend. The final mediation judgment will arrive within the next two weeks.

A quick descent into unemployment, then default

After years earning a comfortable living as a business manager, 54-year-old Pat Carroll’s descent into unemployment was quick and clean.

Not too long ago, the Carroll’s thought they were sitting pretty. Pat’s salary, combined with his wife Joni’s small extra income, put the couple in the market for homeownership. In 2004, they bought a brick Cape Cod and moved in with their teenage daughter.

The first blow came in September 2008. Pat lost his $65,000 job with an architecture firm. It was a few months before a dry cleaning company hired Pat for $48,000 a year – a 25 percent pay cut. Pat thought he’d bounced back. Along with Joni’s wages, it allowed the Carrolls to keep up with the mortgage and other bills.

In May 2009, the dry cleaner cut Pat’s pay to $44,000. By August, Pat was out of that job too. He’d managed to keep up with the mortgage payments so far. But now Pat panicked. He was about to fall behind.

Pat immediately contacted his lender, US Bank. The foremost question on Pat’s mind was: How can you help me? US Bank offered the Carrolls a four-month forbearance during which their monthly payments were halved.

In the meantime, Pat had found Empowering & Strengthening Ohio’s People (ESOP), through its office in Mansfield, and joined a long list of US Bank homeowners facing a similar situation.

The Carroll’s forbearance ended in January, but their situation was worse. Joni had lost her income as well. Now both Pat and Joni were on unemployment, bringing home a fraction of what they’d been earning when they bought their house six years ago. And the Carroll’s mortgage payment had jacked back up to its original amount of $800 a month.

Pat again started calling US Bank. He would get into a 45-minute queue, then wait.  When someone finally got on the line, they had no answers. By now the Carroll’s were three months behind. For Pat, the only way out was to dip into his retirement fund. (The irony is that US Bank refused to look into modification plans for Pat because he was not yet three months behind — even though Pat was staying current by raiding his finite  savings account.)

On April 8, Pat had the chance to confront US Bank executives. ESOP had organized homeowners to come to Cleveland and speak with the bank’s reps . (See my earlier post on that meeting.)

As homeowner after homeowner brought their loan modification woes forward, US Bank execs grew visibly troubled by staff responses. One executive even said: “Our team is just reading the guidelines in a box.”

“Thank you for coming down and telling your story,” said Melissa Borino, US Bank’s Vice President for Community Development, to Pat. “I can’t guarantee what positives will come out of this but…”

Pat spoke up. “I can’t get a $65,000 job in Richland County any more. I know I can’t.” He demanded a permanent modification that would reduce his monthly payments. (The Carroll home, worth $88,000 today, versus its 2004 purchase price of $120,000, is a reflection of Mansfield at large. A  small-town outpost in a mostly rural, farming region, Mansfield has not escaped the economic recession’s effects. Home values throughout the area are depressed by 70 percent.)

“You’re so locked in to your guidelines. You’ve lost track of real people having problems,” Pat told US Bank.  “Acknowledge the issues in my family, in my community, and help me keep my house.”

UPDATE: Pat says the April 8 meeting in Cleveland with US Bank helped him make his case. “I got a personal call from US Bank’s loan mod team,” Pat says. “My file is now going through a re-evaluation under HAMP.” Pat has also landed a $35,000/year job with a state agency, but his homeownership future remains uncertain. “I’m still in a pickle because I still can’t afford my original mortgage payment,” he says. “I still need a modification.”The personal phone call initiated by US Bank is a good sign. But will there be any fire behind what has been nothing less than a smoke-and-mirrors loan servicing show by US Bank?

“Bullshit” buzzer hit during US Bank meeting

Within minutes, the “Bullshit” button went off. A shrill, electronic voice drowned out a US Bank bureaucrat. That’s how the third meeting between US Bank executives, ESOP staff and homeowners started out Thursday afternoon.

Mark Seifert, ESOP’s executive director, sat in a suit and tie at one end of the conference table in ESOP’s downtown Cleveland office, across from two US Bank reps and next to a conference call line filled with US Bank loss mitigation officers.  Also around the table were four homeowners and ESOP board members. In the middle of the table was a battery-powered button that read “Bullshit.” ESOP staff and community organizers flanked the outer ring seats. The packed room, which smelled vaguely of chicken wings and potato salad, was warm. A floor fan hummed along the side. Posters festooned with sharks and bank CEO cellphone numbers hung everywhere.

The question at hand was why US Bank took months, if not years, to process loan modifications, many of which ended in denial. All this after the bank was lauding its implementation in December of a brand new  “team” (the ones on the phone) dedicated to working with non-profits like ESOP.

“We get expired pay stubs in homeowners’ applications,” the US Bank rep said, trying to explain the delay. Seifert’s ruddy complexion turned scarlet.

“That’s bullshit,” Seifert screamed, his fist landing on the table. “I know we send you complete, up-to-date files. I would fire my staff if that wasn’t happening.”

“There is no need to take that tone,” the man on the phone said. But that tone remained in the room, with the “bullshit” button going off a few more times during the two-hour meeting. The tensions were indicative of just how bad US Bank is when it comes to loan modifications.

“What you’re doing is not working,” said Inez Killingsworth, ESOP’s Board President. “We have over 100 files still open. Listen to the homeowners. Let them show you your process is not working.”

With that, homeowner Deborah Matthews, who had called in from Russell’s Point, Ohio, began. Both Deborah and her husband lost their jobs in early 2008. Deborah found work again, but it only paid half of what she’d earned before. Her husband continued to collect unemployment, also a fraction of his salary. As they fell behind on their mortgage, the Matthews called US Bank for help. They were relieved when the bank told them they could make reduced payments as part of partial modification. Shortly afterward, foreclosure papers arrived, to the Matthews’ shock. US Bank had not applied any of their payments and billed them 18 months behind, with late fees to boot. A bank rep told them their house would be sold in January and they should move out. So the Matthews did, only to learn that was incorrect and that US Bank would re-open their modification file. They lost even more money when they gave up their rental lease and moved back into a house that had by now suffered broken pipes and more. Before continuing, Deborah came to ESOP to help her. All she wanted was to stay in her home with a reduced payment plan until the family got back on its feet.

ESOP submitted Matthews’ file on March 23 and received a rare confirmation from US Bank that it was received. So ESOP now wanted to know US Bank’s assessment. It had been only two weeks, yet none of the team members could recollect Matthews’ application.

Seifert looked up at Melissa Borino, a veteran of helping banks work with community groups. Borino had joined US Bank a year ago as a vice president of community development, to help the company with this kind of problem exactly. She’d come in from Chicago for this meeting. Now, she had a pained expression on her face.

“This is exactly what I’m talking about,” Seifert said. Borino nodded. From there, Borino learned that “weekly reviews, ” agreed to in a December meeting, were nothing more than US Bank sending ESOP a list of applications “under review.” The next ESOP knew, the status was changed to “Denied” or “Closed,” without further discussion with ESOP. (With many other lenders, it is standard practice for ESOP to hold weekly meetings in which ESOP counselors take the lead in putting files forward. This allows counselors to highlight which files need attention and make sure banks deal with red flags before they turn into foreclosures.)

Towards the end of the meeting, ESOP homeowners and board members were referring to US Bank’s special loss mitigation officers as the “dream team.” Borino discovered that her “dream team,” less than 20 minutes away in suburban Bedford, was routinely denying modifications and late fee waivers because of a too-strict reading of rules and guidelines.

That alone highlighted how this crisis calls for an end to straitjacketed thinking. Foreclosures aren’t the industry-comfort zone of 5 percent any more. They are far, far beyond that.

As the meeting came to close, Borino was apologetic. She said she had taken lots of notes and needed to investigate the situation further. She thanked the homeowners around the table. Deborah Matthews was promised a call by the end of the day. Then Borino wanted to know where Bedford was and the quickest way to get there.

TO BE CONTINUED…
(I’ll post updates to Deborah Matthews’ predicament and the rest of US Bank’s response as they come in.)

NOTE: A lot more happened at yesterday’s meeting with US Bank, much of it the homeowners who confronted the executives.  Their stories are powerful and speak volumes. I will recount some of them in subsequent, separate posts over the next week. Look for:

“You refused money from a social service agency which had offered to pay half my mortgage!” — Susan Sleighter, Masillon, Ohio

“As soon as I get a job, I’m dumping US Bank.” — Pat Carroll, Mansfield, Ohio

There was one victory during the meeting. US Bank’s Borino agreed to accept $5,000 in rescue funds and give Erick Baker in Cleveland, Ohio, his house back, free and clear. It was a testament to the need for empathy, creativity and a person with authority to immediately approve an out-of-the-box solution.

Will US Bank Change?

Hundreds of homeowners with US Bank mortgages have been getting the runaround. They’ve ended up at ESOP in tears.

When Megan Houston first came to ESOP’s Richland County office in April 2009, she was unemployed, facing foreclosure yet fighting for her home. A sheriff sale was scheduled for July 2009. All the paperwork US Bank required was prepared immediately by ESOP counselors and sent to US Bank, including information that Megan’s fiancé would help Megan to keep making reduced monthly mortgage payments. As Megan’s sheriff sale date approached, she panicked. ESOP contacted the lender. US Bank still had not responded to the full and complete modification packet; and they said they never received the fiancé’s financials! ESOP demanded US Bank halt the sale. But US Bank had no clear answers and made no higher-ups available for further action. Megan lost her home in August.

There are too many Megans out there. Organizers at ESOP have had a 12 percent response rate to this flier, sent to homeowners on March 16. Tons of mortgage files are “pending review” by the Minneaoplis-based US Bank. Most of these homeowners have been waiting for months, if not an entire year, for answers.

All this despite repeated attempts by ESOP to correct the situation. In July, ESOP first met with US Bank. Then again in December. Promises were made to  ESOP, including providing one single person that ESOP could liaison with on all US Bank homeowner files, someone with authority to change loan terms. And to provide an escalation process that would allow ESOP counselors to stop sheriff sales, like in Megan’s case, correct bank mistakes and secure loan modifications instead.

None of these promises have been kept.

A third meeting with US Bank executives is scheduled for April 8 at ESOP’s downtown Cleveland office. We hope executives are coming in good faith as this time ESOP and homeowners want a signed agreement.

If you are a US Bank homeowner who’s tired of delays and diversions, please contact Ashley Diaz, an ESOP Organizer, at 216-361-0718.