The Human Factor
A couple who the Mortgage Resolution Partners plan could have helped fought for their property all the way to jail.
Thursday, August 23, 2012
On March 13, 2011, the same day that a massive tsunami struck the coast of Japan, Robert and Carrie Butler – he’s a cement contractor, she’s a massage therapist/stay-at-home mom – were being handcuffed and put in the back of a Monterey County Sheriff’s patrol car. Their alleged crime: trespassing at their home on Orchard Lane in Prunedale, the home they had been battling for almost two years to save.
It was the third time the sheriff’s department had been out to the property to ask the Butlers to leave. The house, officials said, was no longer theirs to occupy. And yet, nobody could seem to prove how or why their home went into foreclosure in the first place.
The Butlers had a mortgage through New Century Mortgage, a private-label security backed loan on the $650,000 house set on a half-acre in the country. They were underwater on the property, and they knew it. But they were also current on their payments; in 2009, the sought a loan modification.
“Nobody would return our calls,” Carrie Butler says. “And when we finally did get someone on the phone, they said we didn’t qualify for a modification because we were making our payments.”
That sent them down an Alice-in-Wonderland-style rabbit hole as they tried to find the right person who could help them modify the loan. They found their signatures had been forged on some paperwork, that New Century officials had filed other paperwork after the company went bankrupt and that nobody could tell them exactly who owned their mortgage.
They stopped paying until someone could. And in the summer of 2010, they received a notice from Atlantic and Pacific Foreclosure Services that foreclosure had been initiated.
The Butlers did what not very many others in the county have done: They sued.
“We faxed the suit to them to let them know we were serious, and the guy got on the phone and said, ‘What the fuck do you think you’re doing? What makes you think you can get away with this?’” Carrie Butler says. “He was not happy.”
The Butlers staved off the first attempt to auction their home by showing up at the courthouse steps and showing the auctioneer their lawsuit. The second time, the auctioneer told them he was instructed to auction the house anyway.
The suit eventually ended up with an attorney named Michael T. Pines, who represented foreclosed homeowners all over the state, advising them to break into their foreclosed homes and refuse to leave. So that’s what the Butlers did.
The first time the Sheriff’s Department came, in January of 2011, the Butlers left as ordered and called Pines. He told them, “There’s supposed to be a stay on everything, go back in the house.” Pines flew in from San Diego, had a locksmith change the locks and the Butlers went back to their home.
By the second time the sheriffs came, the Butlers had expected trouble; they had already sent their daughters to stay with grandparents. On tsunami day, six patrol cars drove up to their property. The Butlers were arrested, handcuffed and taken to jail. They were released three hours later and ordered to appear in court on trespassing charges.
When they went to court, there was no record of the trespassing case.
In the end, on April 7 of 2011, the foreclosure representative told the Butlers they had three days to remove their property from the home. It’s since been sold and while they lost their initial civil court case, they believe someday they might win their property back.
“In the end, we just tried to take back a little bit of control over our lives,” Carrie Butler says.
Buried in Paper: Who owns your mortgage anyway?
The outfit servicing your home loan may not be the one that owns it, and that’s one of the problems that people like Robert and Carrie Butler faced in the great real estate implosion of 2008. Some banks, such as Bank of America, now only service loans they own; others, like Countrywide Financial Services or New Century Mortgage, bundled the loans and sold them.
“By the third day you sign your papers, the loan is no longer in the system. It’s already been sold and then it’s being traded and nobody can tell you who owns it,” Carrie Butler says.
There are a few ways to find out who owns your mortgage, but it’s not always easy. Borrowers can determine if the federal Freddie Mac or Fannie Mae own it by visiting www.fanniemae.com/homeaffordable or www.freddiemac.com/avoidforeclosure and providing a few pieces of personal information.
Also, according to the website www.mortgageloan.com, the Mortgage Electronic Registration System, or MERS, provides a free service that allows homeowners to find information on the current servicer and owner of a note for most loans registered on the MERS system. As MERS is the common agent for most of the mortgage industry, it means most loans can be tracked through the system at www.mersinc.org.