Fallout: The Financial Crisis

Take my house? I’m moving into yours

Bob Moon Jul 9, 2010
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Fallout: The Financial Crisis

Take my house? I’m moving into yours

Bob Moon Jul 9, 2010
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TEXT OF INTERVIEW

Tess Vigeland: Tried getting attention from your bank lately? A lot of people with mortgages have and we’ve heard the stories of how that goes. Well, here’s a novel strategy that’s the street equivalent of snapping your fingers in front of the CEO’s face: Bring all your furniture and other things from the house that’s about to be foreclosed on and try to move into the high-rise office of a bank executive.

It happened this week here in Los Angeles, and our senior business correspondent Bob Moon went to see if it got the attention of the good people at JPMorgan Chase. Quite the publicity stunt, eh Bob?

Bob Moon: Uh huh, and a confrontational one at first, as you might expect, Tess. A crowd of maybe 50 demonstrators…

Crowd, chanting: What do we want? Justice. When do we want it? Now!

…and a U-Haul truck backs up to this office tower, and unloads not really all their furniture, just a couple of easy chairs, a table and lamp, an inflatable mattress…

Lynn Mottley: We brought this to let you know, you continue to put us out of our homes, we will move into your home.

That was community activist Lynn Mottley. She was there demanding to know why Debora and Tommy Beard have been kept negotiating over two years for an affordable loan modification. Mr. Beard told me their payments were lowered temporarily, but now they’re back in foreclosure:

Tommy Beard: We can afford to make the payments that they gave us for the trial modification, and that’s what we want — not the triple payments that they have presented to us, and we can’t afford that. That’s over our paychecks, both of ours together.

Vigeland: Now I have to ask, Bob, you say this has been going on for a couple of years?

Moon: Uh huh.

Vigeland: Well, did they succeed in getting the bank executives to, you know, come down and explain?

Well, not the chairman of Chase California, Peter Barker. But the bank did send down a spokesman, Gary Kishner. And he sounded almost apologetic about the runaround these folks have gotten when they’ve called at different times and heard conflicting promises and advice. He as much as admitted that’s been happening, and he suggested the most effective way to request a loan modification is face-to-face, at one of the special Chase Homeownership Centers that the bank has located in hard-hit areas of the country.

Gary Kishner: We invite… Please, we, we beg borrowers to, please, if you’re in trouble, set up an appointment, come in and meet with a counselor. That counselor will be your single point of contact throughout the process.

And those centers are on the Chase.com website, and we’ll link to them online here at Marketplace.

Vigeland: And how did that go over with the homeowners there?

Moon: Well, the bank’s people really pushed this idea. Listen to what happened when a boy named Angel Martinez grabbed the microphone to help his mother:

Angel Martinez: When she was talking on the phone, they said she was one of the families that qualifies.

Angel’s mother speaks briefly in Spanish

Angel: When she called again, they said that it was an old application, and she needed to fill out new information.

Chase executive: Ask your mom, does she have all the information with her?

Martinez: Yes, she does.

Gary Kishner: OK, can you come now? Right from here, we can go over to the branch, it’s a block away. We have a loan counselor that we brought him in from the loan center, and we can sit down and look at your case.

Vigeland: Sounds like a happy ending, maybe?

Moon: Well, I’d like to end on an upbeat note, Tess, but I asked the Chase spokesman about the flip side of that:

Moon: In the case of a lot of these people, is it possible they just simply are in homes they cannot afford?

Kishner: Yes, yes, it is possible.

Moon: The answer may ultimately be that “you cannot keep your home”?

Kishner: Our priority is to keep people in their homes. If we’re not able to do that, we review their options. Sometimes it’s the short sale, sometimes it’s a deed in lieu of foreclosure. But we try to educate the borrower on what their options are if modification is not an option. From there, it’s their decision on what course of action they’re going to take.

Moon: Now a “short sale,” by the way, is when the mortgage-holder allows the homeowner to sell it for less than they owe.

Vigeland: Right.

Moon: And that typically forgives the remainder of the loan. That “deed in lieu of foreclosure” he was talking about is when the borrower and mortgage-holder agree to just have the homeowner sign the property back over to the lender.

Vigeland: So you don’t get to keep your home, but you don’t necessarily have to go through a foreclosure, which of course is far more damaging to things like your credit score.

Moon: That’s right. Sad story to tell, either way.

Vigeland: Marketplace senior business correspondent Bob Moon, thanks so much.

Moon: Thanks, Tess.

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