10 Outrageous Foreclosure Stories
Foreclosures have skyrocketed virtually every month since the collapse of the housing market. Across the country, people who bought homes at inflated prices and took adjustable rate mortgages are losing the properties to foreclosure in record numbers as home values decline. (To put the sheer quantity into context, consider this: foreclosures are reported to have “fallen slightly” during August, according to the Washington Post, because there were “only” 358,471 foreclosure filings nationwide during that month. That’s an 18% increase from August 2008!) However, not every story follows the typical “homeowner borrowed too much, homeowner loses home” formula. The stories below run the gamut from weird to tragic to outrageous, capturing some of the less common events on today’s foreclosure scene.
Executive Foreclosure Squatting
The typical foreclosure story is rather common: homeowner can no longer make payments, homeowner goes into foreclosure and loses the home, home goes on the market. But every once in a while a foreclosed home or two falls off the back of the proverbial truck, as DS News reported on September 11, 2009. According to the story, Wells Fargo executive Cheronda Guyton was found to have:
“…moved into a $12 million mansion in Malibu, California, and turned it into an exclusive party pad just after the owners – a couple whose savings were wiped out in Bernie Madoff’s ponzi scheme – surrendered the house to Wells Fargo to settle their debts.”
The bank also reportedly “refused to show the home to would-be buyers” while the disgraced exec was living it up, infuriating local real estate agents. What’s worse is that Guyton is not just an executive in some extraneous department, but a senior vice president responsible for foreclosed properties. In other words, precisely the type of person who should know better. Speculation has surfaced that the bank may have been complicit in the entire scam in efforts to keep the mansion in its inventory of “available housing that’s not brought to market, out of fears doing so would drive down its sales value.”
Evicting the Elderly
While Orange County deputy Dan Mendoza is quick to point out that evictions are nothing more than “business disagreements”, stories like these remind us of the human element. On September 10, 2009, Reuters tells the heartbreaking story of Mendoza’s assignment to evict a “70-year-old woman named Aida, who only speaks Spanish and cries with worry over her grandchildren’s belongings.” After discussing how Mendoza had to summon paramedics to calm the elderly woman’s stress-induced stomach pains, the article highlights some of the other things eviction offers are encountering on today’s foreclosure eviction scene:
“Mendoza talks about finding senior citizens, small kids and pitbulls left behind in the homes. Figueroa says many homes are in appalling state, with mold eating through the roof, meat rotting in the refrigerator and animal feces and urine soiling the carpet. One older man was growing marijuana upstairs, another took his life when deputies arrived.”
Foreclosure Suicide
It’s one thing to hold parties in a foreclosed mansion or lose your home, but to be so terrified of foreclosure that you take your own life is truly something else. Fox News broke the heart-wrenching story in July 2009 of Carlene Balderrama, a 53 year old Massachusetts mother who apparently committed suicide by gunshot when it became clear that she was to lose her home. Complicating matters is the fact that Balderrama’s husband, John, claims to have had no knowledge of the impending foreclosure until now.
“I had no clue,” he told The Associated Press. He said that unbeknownst to him, his wife had been fielding letters from the mortgage company, PHH Mortgage Corp., and shredding them.
Chillingly, Fox reports that Carlene had faxed a letter to her mortgage company on Tuesday July 22 to warn that “by the time you foreclose on my house I’ll be dead.” She is also said to have left a suicide note advising her family to “take the insurance money and pay for the house.” Even more confusing is John’s income as a plumber: $95,000 per year, or roughly $6,932 a month after taxes. Why was paying the mortgage on a $230,000 home so difficult that his wife saw suicide as the only way out?
House Set Ablaze, Kids Poisoned
In the same tragic vein as the last story comes the woman who apparently set fire to her house and attempted to poison her kids in anticipation of foreclosure. Thirty-three year old Tanya Friedly of Detroit was “accused of taking her children out of school early Nov. 18, slipping a sedative in their hot chocolate and setting her own bed on fire in a suicide attempt.” Luckily, the children got away and summoned emergency services, while neighbors pulled Friedly from the inferno. Friedly’s mother, quoted for the story, suggested that her daughter’s bizarre and reprehensible actions may have stemmed from circumstances like “taking new medications for depression and anxiety, her boyfriend lost his job and she was faced with losing her home to foreclosure.” Early reports from psychiatrists indicated that Friedly “does not understand the charges” – assault with intent to murder and arson – brought against her, but she has since “regained competency” by taking anti-anxiety medication and will soon stand trial.
Arizona Couple Forced to Relocate
A somewhat similar case involves an elderly couple in Tucson, Arizona being forced out of their dream home by foreclosure. In a state where one out of every 135 housing units is in foreclosure (the nation’s third highest foreclosure rate, according to AZ StarNet), the story remains gripping.
“The couple’s saga is painful to their daughter, Marybel Ramírez, who bought the house for her parents in 2004 after they all moved here from Douglas. But she lost her job, then depleted her savings and couldn’t refinance. Then, her husband lost his job and the young couple had to survive on what was left of their savings, as well as unemployment benefits and food stamps.”
Once the mortgage payments stopped, there was nothing, not even an attempt at a payment plan, standing between Jesús and Irma Terán and foreclosure of the home they had put so much into – “about $6,000 in this house in upgrades — a tile floor, wrought-iron bars over the windows and screen doors, ceiling fans, shelving in the garage and new paint”, according to AZ StarNet. Aside from noting that Irma was “ghost-white, too weak and ill to see her prized possessions” being packed up, the story simply concludes with Marybel’s somber acknowledgment that she “cannot change reality.”
Foreclosure Protesters Kicked and Pepper Sprayed
The wave of foreclosures has engulfed many homeowners who are beloved by their neighbors and communities, leading to protests and rallies aimed at getting their foreclosures called off. This was the case in Clinton, Minnesota in September, when a planned eviction was obstructed by a squad of activist protesters. The scene got ugly in a hurry, as IndyBay.org reports:
“After rallying the crowd, a handful of activists crossed the yellow tape roping off Clinton Avenue on either side of the house and were promptly assaulted by the police with kicks and pepper spray. Other supporters crossed the now-removed yellow tape from the opposite direction to ensure the activists’ safety. Officers responded aggressively; one shoved someone to the ground with a two-handed shove to the chest. A TC Indymedia volunteer was sprayed directly in the face while on the “public” side of the police tape.”
Others who simply sat down in front of the house in civil disobedience were nevertheless arrested for “obstruction of legal process”, though these people were never officially charged with anything and have since been released. Why the protesters were violently apprehended instead of simply arrested remains unexplained.
The Accidental Eviction (or was it?)
With hundreds of thousands of new foreclosure filings piling up each month, mistakes are inevitable. When a mistake winds up wrongly putting someone’s house into foreclosure auction, however, it’s worth a second look. The Wall Street Journal tells us about Anna Ramirez, a Homestead, Florida woman who “discovered her belongings in the front yard, and a man demanding she vacate the home he won at auction for $87,000.” Already bewildered by what was going on, NBC Miami reports that Ramirez and her family were even given a “leave in 3 hours or else” ultimatum by local police! Ramirez complained that the bank “took the house from right under my feet” and indeed, it was only several days later when the whole mess was linked to an error in the Miami-Dade clerk’s office. Ramirez is now back in her home, but claims that her belongings have been damaged and that she is “exploring legal options.”
But it gets better. An update to the original WSJ story claims that the foreclosure was not in error because the mortgage on Ms. Ramirez’ Florida home had not been paid “in some time.” In a case where no one seems to know the full truth and surprises keep coming out of the woodwork, a commenter on the article spoke for many of us when he wondered “who are the people who run these banks and why do they still have jobs?”
State Rep Foreclosure
It appears that government officials are not exempt from the foreclosure crisis either. In an August 23 story, the Miami Herald reveals that Florida State Rep. Erik Fresen is in foreclosure after failing to make mortgage payments on his home for over a year. The 2014 Florida House Speaker hopeful apparently “owes nearly $615,000 in principal, interest and late fees”, and claims to be “the victim of the banking crisis meltdown and sloppy record keeping by the bank.” Fresen and his attorney also claim to have spent hours on the phone with Chase loan officials to no avail. Unfortunately for Fresen, Chase does not appear to be in any mood for posturing. Spokeswoman Nancy Norris had stern remarks for the State Rep, bluntly stating that “refusing to pay your mortgage isn’t going to bring us to the table any faster. We will eventually foreclose. It’s bad for us, and it’s bad for you.”
The Near Save
A common theme of today’s foreclosure surge is homeowners and banks attempting to find other alternatives. Unfortunately (as we have already seen) these attempts are not always made. But even when they are, that is apparently no guarantee of keeping one’s home. A New Hampshire Public Radio story describes the plight of Sharon Gagnon, who thought she had negotiated a payment extension under the federal Making Home Affordable Program but instead expressed shock and indignation when “a real estate agent came by and told her she [and her husband] didn’t own her house anymore.” Gagnon did her best to patiently explain the agreement she and Chase had reached to the agent, noting that she now had a three month window to come up with some payment money before any kind of foreclosure proceedings began. But according to Gagnon:
“And she’s like, well, I hope Chase didn’t screw you was her response.”
What happened next only added more confusion to the situation. The bank, which had previously accepted the mortgage modification and Gagnon’s check that accompanied it, mysteriously sent the check back without explanation. As Gagnon then explains:
“And the next thing I know is there’s an eviction notice on the door, from the sheriff, telling us we need to be out by September 15th. This was on august 10th. So, naturally that was a whole other level of panic. Now not only are they telling me they own my house. They’re kicking me out of it.”
Chase wont comment on the matter other than to say that it is “under investigation” at present. NHPR claims that Sharon Gagnon’s situation was “unusual in New Hampshire” and blamed both the bureaucratic behavior of banks as well as the aggressiveness zeal with which they pursue foreclosure cases today.
Send in The Catfish
Distressed homeowners aren’t the only ones with mounting costs in the foreclosure surge. Municipal governments are finding themselves swamped with huge bills for common foreclosure tasks, such as cleanup and maintenance. A code enforcement officer in Florida, for example, reported that the town of Wellington was spending $7,000 per month on chemicals just to keep foreclosed swimming pools in sanitary condition! But let not your heart be troubled. While reports of government waste and inefficiency are on the rise, the town of Wellington has discovered a truly cost-effective alternative to chemicals – catfish. NBC Los Angeles breaks it down for us:
“At a typical home, the town drops 15 algae-eating fish in the pool to keep the water clean. In addition to being a potential health hazard, Mitchell believes that cleaner more sanitary pools will make the houses more attractive to buyers, as will the lower fees for upkeep.”
Asked to explain the emergence of her idea, Debra Mitchell offered “Some of us got clever and decided to try the fish-eating…er algae eating fish.”
In Henderson, NV a house in beautiful gated community, people did not wait to be forclosed on and stripped the house. They took the built in appliances water heater air conditioner and even the garage doors. This is a horrible situation for the neighbors and for the bank. I tnink there are just as many stories like this as there are outrages foreclosre stories.
Comment by Eik — September 15, 2009 @ 4:25 pm
There is a bright side to all this. Millions and millions of brainwashed, dumbed down “patriots” are starting to realise who runs the show and for whom. There is only one party in America: The biz party repubs and the biz party dems. America is no longer acting as an ideal for the world but as a warning. 20 or 30 more years of this and maybe u brain dead slaves will take to the streets. Your masters will turn their hired guns on u but eventually the people win.
Comment by garry walsh — September 15, 2009 @ 6:32 pm
rather nauseating, isn’t it? we moved too often to secure a mortgage in this last housing bubble, and i was devastated. but now i’m happy to see we’re not stuck in a losing prospect or worse. i feel so sorry for these poor people who (mostly) just did what the banks told them to…
Comment by sarah jane — September 15, 2009 @ 7:09 pm
I’m going through foreclosure myself right now. I thought my situation was a disaster but some of these people make me feel as though I’m taking a walk in the park. Evicting the elderly? C’mon, man, that’s just sick.
Comment by Dustin — September 16, 2009 @ 1:34 am
So just because you’re elderly, you don’t have to pay your bills? This whole crisis stems from people trying to buy houses they can’t afford. Try living within your means and you won’t have to deal with a foreclosure.
Comment by Nick — September 16, 2009 @ 7:09 am
Learn to pay your bills and you won’t have to worry about a foreclosure. Too many people living beyond their means and buying more than they can afford.
Comment by John — September 16, 2009 @ 8:43 am
Yeah those meanie old republicans, the same group of people that make all those nice things possible because manufacturing, creating, importing, etc. them is a profitable business, most of the time. By the time the democrats are done robbing everyone to give to the pathetic, needy, victims of the world there won’t be anything left to steal, no one to manufacture the goods, no one with motivation to do the business that makes all the things we take for granted, and we can all be poor together. We can have nothing together, and have no opportunity to be better as individuals or collectively. Democrats and Robinhooded thinkers don’t understand that you can’t just take and take and not expect the coffer to eventually be empty. How does it go? Americans are enamored of equality they’d rather be equal in slavery than unequal in freedom.
Comment by Kevin — September 16, 2009 @ 7:17 pm
Huh, you mean to tell me you enter into a contract, borrow money from someone, and then have to pay it back? That is so neocon right wing republican mean. Seriously, how dare they expect you to pay back the loan. That is so not nice. We have a RIGHT to a house. We have a RIGHT to a big house that someone else should pay for. Let’s look to our European neighbors for guidance. We are all such important unique little snowflakes in the world that everyone else should to foot our bill for us. Good and bad happens to us all. Sometimes it’s really bad. But you took a chance and you lost. Don’t want it to happen again, don’t extend yourself, rent, or hold out for a cheap place that you can buy with cash. You aren’t entitled to anything and neither am I, and you are not entitled to me paying for you via the federalies.
Comment by Walker — September 16, 2009 @ 7:21 pm
I do understand that most of the people have their home foreclosed probably did try to live out of their means. However, there still are people who lost their jobs 2-3 years ago, and because they are baby boomers are finding it difficult to find new ones. They have managed to pay their mortgage payments from their savings for as long as they could. What about these people. I’m so sad to see that Americans have forgotten that we are only as strong as our weakest link. And I know that whoever John is, would sure like someone to help feed his mouth and those of his children if God forbid he need it. Not being able to make it through the hard times without a little help doesn’t make you a bad person. Not being willing to help your fellow brothern does. Figure it out! YOU are what is wrong with America!
Comment by Tina — September 16, 2009 @ 7:36 pm
And therein lies the problem….”learn to pay your bills…” And how many of these same Americans believe the banks should have been bailed out rather than their neighbors? The banks are not only receiving money to tide them over during the recession but they are also receiving breaks on their interest payments due on their notes ( some as long a two to five years of no payments), something none of these institutions will offer to their customers (think of all the increased charges for your checking account, your credit cards and now the banks even manipulate your deposits to charge you money on debit purchases. Just think what a program like that could have meant to the average American who is struggling because they were lied to? This was never about “learning to pay your bills…many of these people who have lost and will loose their homes have been working and paying their bills for years, many for decades. This has always been about greed!
Comment by Allene E. Swienckowski — September 16, 2009 @ 9:07 pm
Here is the part that grabs me: 3 years ago many people had equity in their homes. Over the past 3 years they have lost their entire equity investment due to devaluation…but the mortgage amount didn’t change…how is that fair?? When investors put up their money to buy mortgage backed securities or buy into mortgage pools it is an investment. It used to be considered a safe investment but times have changed. Why not have the investors in the mortgage pools and securities take a “haircut” and voluntarily reduce the value of their (no longer so safe) investment and consequently reduce the mortgage balances for the under water homes? I think this would keep many homeowners from abandoning their homes and becoming part of a foreclosure statistic. An agreement could be put in place that if the home appreciates when it is sold that the lender/ investor would split the appreciation on a proportional share with the home owner. I think any rational investor would agree with this rather than face losing even more of the investment when the homes are sold for 20 cents on the dollar at the foreclosure auction.
Comment by David — September 19, 2009 @ 4:23 pm
There are multiple reasons for all these foreclosures. Some are due to people buying more than they could prudently afford. Many are due to people assuming real estate values would forever continue to rise. Some are due to policies the feds put into place forcing banks to make loans to people who couldn’t truly qualify for them. Now some people want to force others to bail out those in need. Sorry, but that’s wrong. Charity that isn’t voluntary is thievery. People who lost their homes can move into apartments and begin the long process of restoring their credit and saving for a new house. In the meanwhile, apartment life in the U.S. beats life in most other countries hands down.
Comment by Marty — September 23, 2009 @ 9:44 pm
Buying a home is a BIG BIG BIG deal. Thats why they require 20% down, an immaculate credit record, a super-stable job, and several steady sources of income. Or, at least they did until the mid-90s when this snowball started gathering steam.
Comment by desing — September 24, 2009 @ 12:36 am
I have to say that some of you are incredible. This R/E market was designed to take advantage of inflated home prices, inticing folks to BELIEVE in the “american dream” (and yes I used a lower case “a” in american)of home ownership and falling victim to a gigantic goverment sponsored ponsi scheme. Those of you who have summed up the crisis, to people are living above their means, I can only hope it does not happen to you or someone you love. You people make me sick, with your contrite, know it all, small minded concept of what life SHOULD be. REALITY CHCECK, try living in the real world like the people referenced in this article, and see how it feels. I wish we could return to an era where people truly cared for each other and not simply thier return on investment.
Comment by Golightly — October 29, 2009 @ 8:27 am
A bomb on the bailout money reaches across the nation all the way to Alabama – right to my front door. I am pressed against a deadline of 2 weeks to find a place to call home. I want to get this story out to let all those being affected in some way by the infamous monies given to “Corporate America” to assist those in need is being rerouted in executive bonuses! I know that I am not alone. Please read my story….
The Death of the American Dream – My Story
The rich get richer and the little man gets jilted. When will the madness end? The American Dream for many is directly linked to the famous line from the Declaration of Independence, “Life, liberty and the pursuit of happiness.” After having served my country in the military for twenty – years, I surely thought this dream would be well within my grasp. Unfortunately, my pursuit of happiness was derailed after being erroneously foreclosed on by Bank of America in 2005.
This is not the typical foreclosure story. This is not about being foreclosed on due to an adjustable rate mortgage. Nor is it about making interest-only payments. We were locked into a 30 year fixed rate that we paid every month, faithfully. Suddenly, there began an onslaught of harassing letters, as well as phone calls, threatening to seize my home due to late payments. They also made delinquent reports to the credit bureau. After researching on our side, we would submit canceled checks showing they’d received and processed our payments. After “research” on their end, they would issue an apology until the next 6 months. Imagine our surprise when we received a couple of letters from Bank of America finally admitting the error had occurred on their part.
In January of 2005, my fear became a reality. After the negative credit reporting, harassing phone calls, and threatening letters, Bank of America foreclosed on my home and sold my property to one of their subsidiary companies. It was as if they were forcing us into foreclosure. They snatched my property from under me and sold it for a profit, inevitably leaving my family homeless. Nevertheless, as they conspired behind my back, I continued to pay my homeowner’s insurance, property taxes, in addition to the principal mortgage payment plus interest to the court system pending litigation.
Since having retained legal counsel, Bank of America proposes to collect all the payments I have been making for the past 5 years (including the ones they returned) totaling over $30,000 in addition to the insurance claim payment and apply that to the principal balance. They agree to relinquish the property, that has incurred additional damage (fire, water, mold, etc.), and give $6,000.
I was insulted at the offer. After putting our life on hold for the past 9 years, unable to make major life decisions, and living in constant uncertainty, this is the best that they can offer? I am not sure whether to laugh or cry. This has really been a slap in the face as a man trying to provide a stable home for his family. As if times are not challenging enough, corporate America decides to get over on the little person; where is the justice in that?
Comment by Larry Smith — December 18, 2009 @ 8:22 am
I feel for all of you folks, those who have been faced with foreclosure/bankruptcy and those who don’t seem to have a clue as to what is going on. Ignorant statements like “live within your means” and “pay your bills” only exposes your lack of conscious thought. It matters not how and why people are in need, we help them because they need it. Anyone who thinks eviction is ever the proper thing to do should live to be evicted themselves. Only through experience can we understand the plight of our fellow human beings. If people could just let go of their precious egos for a moment and see what a world we have blindly created.
Fortunately the greedy bastards got so sloppy in their money crazed stupor that they can’t even produce the original note and transfers were never properly documented! Make them produce the original note before they try to steal your home without the legal right! Fight for your home, don’t give up!
Comment by JD — January 23, 2010 @ 5:34 pm
I find it sad how critical some folks are of these people who have fallen into foreclosure. As a real estate agent I realize that there were a lot of people who were approved for more than they could afford and bought in the highest bracket of what they were pre-approved for. There were also a lot of people who were told by their bank that if they did a five year adjustable that they could just refinance before the $ came due and jump into a 30-fixed while the rates were good.
The fact is that not all these people who are in foreclosure are where they are because they bought more than they could afford. The economy took a dive and people are losing their jobs, and if they could find another job they would. I see these people everyday, I talk to them everyday. They have families and friends and a house that they want to keep. But if you were making $20 an hour and got laid off, what are you going to do? Get a job at mcdonalds for $8, like that is going to pay the bills.
Before you make comments about people, ask yourself seriously………what would you do if you lost your job tomorrow? No job is THAT safe…..and what would you do if your spouse soon after lost their job??? Or, if, god forbid, you or someone in your family became ill or got in an accident. Hospital bills add up quickly.
And FYI for any one out there doing anything with the bank…..GET EVERYTHING IN WRITING BEFORE YOU SEND THEM ANY PAYMENTS…….ASK THEM TO FAX YOU THE AGREEMENT YOU HAVE DISCUSSED WITH THEM, OR EMAIL IT…….JUST BECAUSE SOMEONE TELLS YOU OVER THE PHONE THAT THEY WILL WORK WITH YOU, DOES NOT MEAN THEY HAVE THE POWER TO MAKE IT BE TRUE…..
Comment by Carolyn — January 28, 2010 @ 10:07 pm
Indeed they are outrageous. In fact I came across one of those that stresses the lucrativeness of a foreclosed property. In particular, that blog is no stresses only one side of the coin which is the sweet advantage of a prospective buyer. God its really very disgusting and it makes me sick. I myself almost got caught in this outrage but by sheer determination, I spared my family from complete humiliation. Here is what I wrote in that blog. Obviously the blog owner never bothered to publish it.
http://badrra.wordpress.com/2009/07/13/angels-and-demons/
Comment by badrra — February 6, 2010 @ 2:16 pm
I was just foreclosed on with a California house and $350k mortgage. I see the bank put it up for sale at a $170k asking price. Seems they should have danced with me when we had a $240k offer in front of us, but they didn’t want to take my calls. Thank God I had stellar credit, great income, and qualified for another mortgage before stopping payment on the first one. (And NO, I did NOT have to show the house as rented… I qualified without lying). I put 5% down with a well-known, conventional bank, so this “You have to put 20% down” stuff is crap. I love the house, I’ll be in it forever. So I don’t care about the 7 year credit hit… it’s fine by me. The loan on the CA house was non-recourse in a non-recourse state, no deficiency judment by the bank (well, no “judgment” at all – non-judicial foreclosure). Free and clear there. Gaps on non-recourse foreclosures do not result in Cancellation of Debt income, so free and clear with the IRS. Walking away is the BEST business decision I ever made. I feel free again.
Comment by gladitsdone — February 11, 2010 @ 6:38 am