“WE ARE NOT DEADBEATS!” Said Sherry Hernandez
Posted by Piggybankblog on 11/29/10
Update by Sherry on 05/27/11 - click here
The following email was sent to us On December 6th, 2010, we go to trial against Bank of America (Countrywide) to try and save our home. Case #BC379300 Department 53, Judge John P. Shook,
Los Angeles Superior Court
111 N. Hill Street in Los Angeles
After four long years we are about to go to trail against Countrywide (B of A) in a civil case brought before the Los Angeles Superior Court.
We are not unique in this, many Americans are angry and have sued in an attempt to recover their losses brought on by predatory lending. What makes our case unique is that we DID negotiate at the table before we signed and in spite of these negotiations, Countrywide did not honor them.
I am enclosing a copy of the signed and notarized prepayment penalty that we negotiated at the table on March 29, 2006. Originally, the general manager at Countrywide promised us that there would be no prepayment penalty, but when we sat down at the table, the attached prepayment penalty addendum was attached. We called the general manager, George Rivas, while we were at the table with the notary and he told us that he was not able to get it through with no prepayment penalty, but asked us if we could agree to just one year. We reluctantly agreed and made the adjustment at the table on the attached addendum. We asked the notary if he could notarize the change as it was, and he said he could notarize anything, if they did not agree, we would have to sign the whole contract all over again. Obviously, we did not have a copy machine there at the restaurant, at 7 pm at night, where they sent us to sign our loan docs. This copy was sent to us, by Countrywide after they refused to honor the one year prepayment agreement.
Two weeks later, after we were already in possession of our home. Mr. Rivas, General Manager for Countrywide send home an single page additional prepayment addendum with our daughter assuring us that he needed it to get the loan docs approved, but that he would honor the one year that was notarized in our contract, as promised.
Our story is, of course, a long one, and one that should be settled in a court of law, however, the judge has already inferred that he is not going to accept our evidence into our trial because B of A has filled in limine’s to have the evidence and the testimony of the general manager removed.
Countrywide does not deny that what happened to us is wrong, what they deny is that they have any responsibility in it. You see, that is the beauty of a corporation, the customers, like you and I, are rarely able to find a decision maker or a policy maker that can take a look at our problem and make a decision. Corporate policy forbids individual employees from making policy decisions and those who make those decisions are inaccessible. Consequently, when an exception happens the file is shuffled from desk to desk, like a hot potato, no one wanting to address the issue or follow it up to completion. The employee’s job is not to make a decision or an evaluation and if they should, then the company disavows the employee and denies all association, leaving the customer holding the bag and the corporation holding the profits.
As a family, we are incensed that our seventh amendment rights are being violated. We asked for a jury trial, because after what has happened to us, we are not sure who we can trust anymore and now that our trial date is almost upon us the judge has already stacked the deck against us by not allowing our evidence. This kind of favoritism toward the large corporations should not be allowed. It is costing our family everything to get this far, only to have our evidence removed before it can be seen by a jury.
So much has been said about the homeowners and our collective greed. They have pointed at us and told us we had the right to negotiate for a better loan, yet here is an example of how much power we really had. We negotiated and it was not honored. This was to be our retirement home. WE ARE NOT DEADBEATS! We have worked hard all of our lives and have paid our debts, even if it meant working two or three jobs. We are too old to keep up that kind of pace any longer and now that we have reached an age where we should be planning our retirement we are struggling to make ends meet and to obtain some semblance of justice.
We would be more than happy to share our complete story in hopes that it may help someone else. Especially, if we cannot have our case heard fairly in open court, it can be aired openly in the court of public opinion.
Her name is Sherry Hernandez AND SHE IS FIGHTING BACK!
You may contact Sherry through us at: firstname.lastname@example.org
Written by Sherry Hernandez
By March 2007, we had lost two prospective loans due to the 3-year prepayment penalty. With dropping loan values, our loan was now over 80% of the value of the property and loan companies would not lend above an 80/20 ratio. Brokers and Real Estate Agencies were becoming desperate for business and the market was saturated with people making cold calls to homeowners in hopes of convincing them to refinance. The rates were dropping and so with the promise of a slightly better rate, the brokers began their barrage of calls.
All of the brokers we talked with advised us to seek legal representation. Something was coming down, they all agreed, and the lenders had been guilty of “predatory” practices. A good lawyer could get us our money back for the difference in the prepayment penalty, meanwhile, we would have to pay it if we wanted to save our home and get out of the toxic loan.
Making phone calls and following up with lenders and with Countrywide had become a full time job. Countrywide, rarely, if ever called back. They would put us off a week or two weeks while they did “research” and then would not remember me when I called back. Time was passing and our debt was increasing.
We had realized that we were going to get no help from anyone to fix this problem. We owned two homes and so we were hard to sympathize with. It didn’t matter that the current home was our retirement home that we had saved all of our lives for, and that we planned on selling our other home in a few years to pay this one off. None of those things matter to anyone else. Our plans for retirement were our plans and others were struggling just to hand on to their homes. The market was filling with a glut of panicked homeowners who were finding that they could no longer meet their payments. The reasons didn’t matter to the lenders, their battle cry was that the homeowners were “deadbeats” who got in over their heads. The fact that the lenders offered fraudulent contracts with the odds stacked in their favor, or that they out and out lied was getting swept under the proverbial rug. The finger of the financiers was getting pointed directly into the faces of the unsuspecting home buyers, and many of us harbored the guilt because up until now, we had worked hard to be model citizens. We were citizens with a dream, with hope of a better future.
We were forced to take out a loan on our other property to pay down the prepayment penalty, but by then we had lost two loans and had to reapply again. While we were looking for the best deal in interest the lenders began rejecting us for too many inquiries on our credit report. At this point we had a substantial amount in our savings account and we were looking to refinance our loan and pay off the 2nd. We would have to alter our retirement plans somewhat, but we could still make it workable. On our next payoff report for yet another refinance, we found that Countrywide had not paid our property taxes. I had called them twice to verify that they had been paid and they assured me they took care of it through the internet, but here was the payoff report showing unpaid taxes of $10,000.00. The loan company would not refinance us with this amount outstanding. I called Countrywide, again, and again they denied responsibility, two months later I managed to prove to them that it was their fault, by then, of course, we had lost the loan.
Brokers were more than willing to work with us on refinancing. I began to see a pattern and I began to discover that all loans were being funneled through the same channels, there was no competition, there was only Fanny Mae and Freddie Mac. I would make a simple inquiry and two days later I would have preliminary loan docs in the mail. I would ask about loan rates, and they would quote me the ARM rate, if I insisted on knowing the “real” rate, they hemmed and hawed until they felt cornered enough to give it to me. One broker, Omar, quoted me a 4.5% loan rate and when he sent the paperwork it was 7.5% ARM with a 4.5% starting. I had been adamant about not getting an ARM, so when I called him to object, he stated that he could not get a rate lower than 7.5, but if I was willing to go with a 30 year fixed for now at 7.75, he would fix me up with a lower rate in 6 months. At this point, I was pretty sure that in six months he would be in some other part of the world.
I was able to get in touch with the former manager of Countrywide. He actually apologized and made an attempt to help. He was one of those telling us that Countrywide was in trouble. He had ceased working there shortly after completing our loan. He promised to make a few phone calls and see what he could do, but after a matter of time he stopped answering my calls also. I wonder now if he was just stalling for time.
We had letters out to the BBB, Department of Consumer Affairs and Department of Corporations, as well as numerous letters and faxes to Countrywide. All of this took time. All of this ate into our equity as we continued to pay the 8.5% and 13% loan payment. We tried to pay down the second in order to make up for the loss on the 1st, but time and the emotional slump took its toll on our moral. We were in a daze as to how this could happen in the United States of America.
Countrywide did not address my issues to the BBB, instead they talked about the property taxes and promised to make good on them. They simply glazed over my issue on the prepayment penalty, which was the one I had written about. The Department of Consumer Affairs referred us to the Department of Corporations.
By July 2007, Countrywide sent us their final answer on the matter. They were denying us release from the prepayment penalty. By that time, they had already made the additional cost from the penalty by just holding us hostage to a toxic loan. We were losing our equity at the rate of $2,300.00 per month and the property values were dropping. We had already lost the $80,0000.00 down payment we had placed on the loan when we first got it.
We had consulted several lawyers previously, but having never used the legal system before, we wanted to avoid that venue. We now sought one out in earnest and we went with one recommended by the broker that we were working with at that time.
After giving our case to a lawyer and paying the $5000 retainer fee, I felt some relief. At least now I could concentrate on getting out from under the toxic loan that held us in a snare trap. Tired of the games and manipulations of the many brokers I consulted, I went to the Forbes 500 site and looked for a reputable lender. The first thing I asked was if they carried their own paper. I was also tired of being redirected to Freddie Mac and Fannie Mae. Best Rate Financial assured me that they did carry their own paper much of the time, they also sold the loans, but we did not need to worry, they were a reputable firm. They offered us an interest rate of 5.75% on a ten year interest only. It was the best I felt we could do at this point, we would have to worry about the refinance again in 10 years, but at least we wouldn’t be paying 8.75% now, and there would be no prepayment penalty, so we could pay the principle down at our own pace.
In August of 2007, Countrywide agreed to release us from the prepayment penalty. They did this they said in a letter dated August 28th, 2007 due to a letter they received from the Department of Corporations. I was never privy to this letter, but in April of 2006, the Department of Corporations sent out a general memo labeling prepayment penalties as predator and called upon Corporations to cease this practice.
We had already lost two or three loans already, which meant we had forked out over $1,500 in property appraisals. Everyone was looking to continue supplementing their income from the middle class, and the middle class was losing their resources. We had more money going out than coming in, and we could see it was going to get worse if we didn’t do something soon. Meanwhile Countrywide did nothing to help or apologize for the money they had already extorted from us with their fraudulent prepayment penalty.
Our lawyer requested a refinance from Countrywide at a low interest rate. They were unwilling to comply. Later, they said they would consider it, but we had to go through a qualification procedure. At this point we knew we couldn’t trust them. Best Rate Financial was ready to give us a loan, we went with them. Our plan was to pay down the 2nd mortgage and carry only a 1st. Countrywide had sold our 1st to Wells Fargo and kept the 2nd. There was not enough time to consolidate the loans. We had to refinance just the 1st in order to get out of the toxic loan from Countrywide. Due to the stall tactics employed by Countrywide, the payoff of our loan was $50,000 more than the original loan, that did not include loan costs and origination fees and appraisals.
Our attorney tried to negotiate to reimburse our costs. Countrywide would not agree. At one point they offered $10,000.00. We felt this was ludicrous considering the amount they had cost us in actual increased principle and time and aggravation. They mocked us with their depraved indifference.
By January of 2008, less than two years after moving in to our new home, we had a new loan that was $50,000.00 more than our previous loan. Our property was slowly losing value and Countrywide was becoming exposed as a predatory lender. They were about to go under and Bank of America was talking about buying them out. They were the biggest lender in the United States, and primarily responsible for plunging our country into the biggest depression since the great depression of the 1920’s, yet the bankers were blaming the middle-class homeowners for our audacity at wanting to buy homes for our family. We were the greedy ones yet they were the ones that lent us the money based on our ability to repay. They are the ones that steered many of us into these loans when we went in looking for conventional loans. So then they turned around and blamed the brokers….
October 7, 2011
Today I went to Occupy LA once again. I was astounded by what I saw. The front of city hall had become tent city. Hundreds of people were there holding signs, milling about, interacting and sharing ideals.
It had grown since Monday and they were working on organization. They had a food tent, a media site, and an information booth. They had a resource tent where they distributed books and clothing. We came around lunchtime and the were serving a hot lunch provided by some of the neighboring businesses.
They are organizing committees to help keep order; legal, medical, media, distribution, kitchen, publicity, etc. One young woman was volunteering her time to lead a Pilates class on the lawn.
There were occasional patrolmen from the police department walking by, but for the most part the police were far from view. They had not interrupted, nor disturbed the gatherings and meetings.
The demonstration was peaceful, groups of people were milling about with different agendas. One group carried signs denouncing the wars and military force and asking for our troops to come back home. Another group was asking for reform on student loan policies.
Across the street the trial for Michael Jackson’s physician was going on. There were a large crowd of protesters there also, sometimes wandering over and mingling with the Occupy LA movement. A homeless man wandered through the crowd asking for money, oblivious to the fact that a few feet away from him lunch was being served without charge, oblivious to either cause.
Sitting on her orthopedic chair on the sidewalk holding a sign identifying herself with the 99% was a woman who looked to be in her late 70’s or early 80’s. She smiled at those who passed by and stared at her and indulgently allowed those who stopped to take pictures and ask questions.
She told me that she had a PhD in Clinical Psychology and she was out there to be part of the protest, part of the 99% seeking equal rights under the law.
All over the country people are coming out in masse to express their dislike of our current circumstances.