Attorney General Kamala D. Harris Convenes Roundtable with Foreclosure Victims

>>ATTORNEY GENERAL KAMALA D. HARRIS: I wanted to be here today to hear these stories and I've been receiving letters, and I will be meeting with more people, because this is an issue that is about people and about these stories. There are a lot of people who are debating and talking about it and thinking about it from a perspective that is intellectual, or perhaps political or academic, but the reality is this issue is about each of you at this table and the experiences that you've had. >>MALE MODERATOR: I want to start with the homeowners' stories. So, I'm wondering if we could just start with you, Denise? >>DENISE COLLINS: I'm sorry. [crying] It's just a house.... My name is Denise Collins. I owned a home in San Francisco and bought my first home as an adult in 1997. Worked hard, paid the home, loved San Francisco, loved the Bayview in spite of the so-called bad reputation, made it my home after coming here from Southern California. In May of, March, excuse me, January 2009, I was behind in my payment on my loan payment one month. All the prevailing wisdom told me to call the lenders right away. I did so and called them right away. I cut off my security system. I stopped cable. I sold my car. I cut my expenses down to the bare minimum so I could just have, you know, enough to pay my mortgage. I went with what my lender told me. I trusted my lender to give me good, sound advice and I believed him. After months and months of haggling and sending paperwork, and going back and back and forth, and I'm sure you're going to hear this a lot, I got in June of 2009, I went down to pay my taxes. They had already paid my taxes, my property taxes. Prior to that in May, they told me I was denied, that I needed to start the process all over again. Moving forward, later on in July, once again, I'm sending paperwork to them, faxing paperwork. This time, I started backing it up with sending it by mail. They would send me documents. I would say, "What is this?" They would say, "We don't know...have any idea what it is." Come August, they told me my home was on the chopping block to be foreclosed upon. I immediately called them. I called HOPE NOW. I called everybody I could call. I called NACA. I called everyone to stop the process. I told them that you know you're violating the provision of the HAMP that allows homeowners while they're in loan modification, being reviewed for a loan modification, that you should stop the clock on them. Continued to speak with them and this time, with their permission, I am speaking with them and I am taping my conversations with these people. In September...on September 10th, I called them. I said I need to know what paperwork you now need because here we go again with starting the process all over again. I was informed by the lender's lawyer that the home was being closed...foreclosed on on Monday the 13th. This was 3:45 p.m. on a Friday. I immediately called a lawyer. I got a lawyer on Monday morning. There was nothing else I could do. He told me, he gave me a letter to go down to the steps. I stood on the steps of the courthouse and had to be humiliated and passed out a pendens, a lis pendens notifications to anybody that wanted to buy the property, letting them know that if they buy that property that the home's going to be subject to litigation. I litigated with my...through an attorney--it cost me a lot of money, busted me--and what I found from it is that these home...these lenders are completely empowered, they are sanctioned and they are unchecked by the government. I had no...and all the blame, all the fault went on me. I am still in the home. I've had to for...I've had to declare bankruptcy because then my lender told me that they were going to come after me for all the lawyer fees. So, now I'm...now I'm in foreclosure. So, from one phone call, let me back up. From one phone call where they were sending me prior to that all this information telling me that they could send me, they could help, that we could help, we have programs, we can help. From one phone call to my lender, now here we are, November of 2011, that one phone call has been the bane of my existence for over, what, now two years, almost two years. It was the worst phone call that I've ever made, and I am completely destitute because of it. And that's my story, and that's why I called, and that's why I contacted Kamala Harris because at that point, I had nowhere else to go. And it needed to be exposed and I cannot believe personally that my lender is not doing this to many of other...the homeowners in California. And that's my story. >>ATTORNEY GENERAL KAMALA D. HARRIS: I thank you for your courage, and so the way that I come at it, as I discussed earlier, is actually from a number of places. It comes from having been the District Attorney of San Francisco and creating that unit, and we prosecuted the individual that we heard Jacqueline talk about and charged him, someone who was, as we have seen in this environment, fits into that category of a scam artist essentially: those who have a broker's license or a law degree or a real estate license who have been predators preying on the trust that homeowners have, because--let's also be clear about what we're often talking about--we're talking about folks who have believed in the American Dream, which says as we heard...as we heard you talk about on behalf of Aurora. It is about people who believe that if you hold down a job or two, and you work very hard and you pay your taxes on time--Jacqueline talked about that--you pay your bills on time and you live an honest life, that one of the rewards you will receive is to have a home in which you can raise your children, in which you can count on the fact that you will be able to live even in times of illness, and a place that also represents the future in terms of not only your retirement but your children's education. So, when we're talking about hard-working, law-abiding folks who are losing their homes, it's a very big issue that impacts not only those individuals but entire communities. There was a discussion about blight. I know as a career prosecutor there is often the discussion about how that then extends into concerns about public safety for an entire community. So, this is a big issue, and it is for that reason that back in the earlier part of this year we created the Mortgage Fraud Strike Force in my Office, in the Attorney General's Office. And I pulled together some of the brightest lawyers in the Office from the Consumer Fraud Division, the Corporate Fraud Division, and the Criminal Division, together with sworn law enforcement officers to deal with this issue in the many ways that it presents itself, and we have heard those many ways in the stories we heard today. And so, you know, Paul outlined it, Kevin outlined it. What we heard were stories about everything from the origination process to the issue of servicing, to the issue of modification and then another issue, which we can discuss more at another time, which is the whole securitization point, right? There are many junctures during this process at which we really have to focus and understand that it's...it's not monolithic, meaning it has many different angles. And so we created that unit in the AG's Office with the mind and the idea that we are going to require that people who commit wrongdoing, who violate the law, who make false presentations and claims about what they can do for you, that those people will be met with consequence and accountability. And so we have been prosecuting and litigating a number of cases, and you've, I'm sure, heard or read about some of them, involving everything from law firms who've been charging folks $4,000 to $10,000 if they want to join a lawsuit against the bank--when by the way you shouldn't have to pay money to do that-- to the work that we have been doing through that unit in the negotiation discussions for the first almost nine months of the year in Washington, D.C. with the banks, to what we are doing in terms of taking an independent path and dealing with the reality which is our priority, which is that we have to work as hard as we can to bring California as much relief as is possible, and to bring the homeowners of California as much relief as is possible. And so that has been...that has been the focus, and it has been about dealing then with the litigation piece and the vigorous aspect with which we should be prosecuting those cases. There is then also the work that we need to do, and again this is why your stories have been so important: the work of reform. Paul talked about that. What you've all talked about are broken systems, as much as anything. What you've all talked about is having an experience--that is unfortunately not unique to the folks at this table-- where you were led to believe you were walking down one path and come to find out you were walking down an entirely different path, a system in which you are being required to understand documents that are intricate and complex, if not confusing. So, we've heard the story of someone who decided I've got to figure this out; I'm going to go and get a real estate license. Well, you shouldn't have to get a real estate license in order to understand how to buy a home and keep that home. So, clearly there is a need for reform, and that is an area of focus for us as well, and what we can do to help make that possible. I believe, as much as anything, it will be a function of not only the level of involvement that all of you at this table have, but it is going to be also about folding in the Legislature. And so we've begun having those conversations with leading members, especially in California, but also in national legislature and in Congress, around what we can do to reform the laws, first of California and then of our country, to make this process easier and to make it more transparent and, in that way, fair to the homeowner. So, there's the area of prosecution and the area of reform, and then there is the area of community education. You know, again, as a career prosecutor, I've always believed that if you're going to achieve the goal of public safety, for example, let's not be in a position of constantly reacting to crime after it occurs. Let's also focus on prevention before it happens, right? Well, on this issue, prevention means helping homeowners understand the system and know their rights. And that's where MEDA and a lot of the other organizations come into play and you, as community leaders by virtue of sitting at this table, come into play... which is getting the word out around what we can do to let people know their rights and to understand the process as it currently exists, until we are able to reform it so that it is as it should be. And it is on those areas that I am mostly focused, specifically, as it relates to both the prosecution piece but also more importantly the reform piece, and back to Paul's point about the immediacy is this dual-track issue. This is a problem. It is a huge problem, because we have set up a system that expects you to be on two tracks at the same time. `You're one homeowner, living on those two tracks but nobody on those two tracks is talking to each other, and the rules for how you're supposed to participate on each is different. A resounding theme at this table! And I've heard it visiting everywhere from Visalia to Fresno to Redding to, you know, up in Del Norte County. Is you say that you tell the folks that you've given them their documents, and then they don't acknowledge that they've received them. You ask...you call up people and ask them for advice, they give you no advice or wrong advice. You are on the process of foreclosure and then, God forbid, you have to end up finding out--because some strangers have been knocking at your door--that your home was sold on the courthouse steps. So, that needs to be dealt with immediately, and that is, as a priority, a key issue for us and for me, which is the whole dual-track issue. And then there is the issue of just what it means to be compassionate and what it means to realize that when we have a broken system which needs reform and in particular the dual-track issue, wouldn't it be the right thing to do especially during the holiday season to put a pause button, to let these folks figure out how to stay in their homes but not kick them out of their homes during the holidays? And I completely support that. So, again, I want to thank everybody here. You are symbols of courage. You're also unfortunately the stories that are...that is the story of many folks probably. Paul Leonard has told us over a million who cannot be in this room and here with us today, but your voices are really voices for them. And for that, I thank you for your leadership and your courage.