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Paper Rape: The Untold Story of Foreclosure in America In Loving Memory of Linda James

piggybankblog.com | July 21, 2015

By Michelle Darnell

There is a story that has yet to be told. It is Linda’s story. It is a story of pain, suffering, loss, destruction and death. It is the story of the real casualties of the greatest financial scam in history told through the eyes of a foreclosure paralegal. It is the story of broken communities, families and lives that lay scattered like bodies on a battlefield, in the wake of financial schemes and taxpayer bailouts. It is the story that few want to face and even fewer are responding to. It is the story of foreclosure in America.

My life was changed forever 7 years ago. What I personally experienced and what I observed lit a fire within me that I can’t extinguish.

The Crash of 2008

It all started in October, 2008. Please note the brainchild of Wall Street and international banksters: giving subprime loans to anyone who could fog a mirror. They cared little about the qualifications of the borrower as they were going to selloff the risk as a mortgage backed security to investors around the world at a huge profit. Rating agencies like S&P, Fitch and Moody’s gave AAA ratings to these destined-to-fail financial products and they were even peddled to pension funds, municipalities and foreign countries. Banks and Wall Street gurus made billions and then when the Ponzi scheme collapsed, taxpayers bailed them out.

This foreclosure holocaust is a Ponzi scheme that would make Bernie Madoff seem like a saint. Warren Buffet prophetically said, “The mortgage backed security is a weapon of mass destruction,” and he was right.

I describe the destruction, not in dollars and cents, but in lives destroyed. As the rates on the first set of subprime adjustable rate loans adjusted, some homeowners found their payments doubling overnight. As they found they couldn’t pay their mortgage payments, the trickle of foreclosures began.

As these foreclosures occurred, the real estate market then inverted and new construction slowed. Homes lost their values foreclosureovernight. Where once, if someone faced an emergency like a loss of job or spouse or medical emergency, they could just access equity,get a loan or sell their home, but now people underwater owing more than their homes are worth, face foreclosure.

The trickle turned in to a steady flow of defaulted mortgages and wrecked lives. As construction and subsidiary industries dried up, people lost their jobs and then their homes, and the flow became a waterfall.

In 2008 my ex-husband was a contractor. We had never been wealthy but he made a decent living and we were supporting 3 teenagers and a new baby. After The Crash of 2008, work dried up almost overnight. He found himself looking for most any project he could find, even mowing lawns.

He ran across a Craigslist ad for “property preservation“ contractor. He’d go into foreclosed and vacated properties and perform the inspections, lock changes, weatherproofing, photo buckets,estimates for rehabilitation work that would never be done, and trash outs. At the time, we knew nothing about the foreclosure industry and thought this was a just part of the real estate market. We were wrong.

I often worked with my husband. What I walked into was startling. We were given hundreds of work orders throughout Snohomish, Island, Whatcom and King Counties. We inspected mansions, shacks and everything in between. Some had sat empty for years and others we posted the initial notices on the door.

We did this for nickels, always hoping to get the contract for the rehab work,never realizing that we were being used as tools for the bank’s dirty work. The estimates we gave the banks were being used for the Net Present Value calculations used to foreclose on homeowners,but we were oblivious.

The most startling aspect was that most of the houses appeared like the owners had walked out with the clothes on their back. Can you say “Grapes of Wrath?” It was as if they couldn’t even afford a U-Haul to take their belongings; at least Henry Fonda and the Joads had that.

The banks told my husband to just to get rid of the debris. Furniture, clothing, toys, picture albums,bikes, household items and food were all disposed of. At one point I was gathering up what I could to donate it to charity.

I toured homes where stuffed animals and toys lay on the floor just as the children had left them. I helped empty the home of a religious cancer patient once. You could tell by items left in the home. I opened the freezer and the steak was liquefied because the home had been empty for 3 years.

Another home was packed full of tools and a boat. This home had been owned by a small business owner who shot himself,leaving two small children and a wife behind, shortly after being evicted. A home in Blaine that sat empty for a couple years was uninhabitable as a tree had fallen through the roof and the house had been left to rot.

I walked through dozens of homes. I was deeply moved by what I saw and decided to research the issue as I couldn’t believe this many homes would be left abandoned. Seeing such things changes a person. I wondered what would cause someone to leave–not just their home–but all their possessions. Where did these families go?

I spent 6 months researching and what I discovered was essentially a pre-meditated implosion of our economy. 40%of middle class wealth and over 15 million homes have been taken from the people. Sure they took on the loans but they trusted their bankers and “you simply can’t lose in real estate,” right?

I recall a Countrywide loan officer trying to convince me to buy “more home than I could afford” as she told me that I would probably get a raise anyway and if I ever found myself in a financial “jam,” I could just sell the property. However, I am a “glass is half empty” sort of person so I declined. Thank the lord, because that was 2007, just before the crash.

After my research, I decided I couldn’t just sit on my hands, knowing what I now knew. I figured eventually these cases would find their ways into the court system and justice would emerge. (I was naïve back then.)

It was shortly thereafter that I was hired by a law firm in Snohomish County to help set up their mediation program and assist with foreclosure defense litigation. While there I ran across stories I’ll never forget. One in particular motivated me like no other.

Linda's Story

Linda James was a teacher. She had been laid off during the recession. She had owned her home for 15 years. She began worry that she may not be able to pay her mortgage. She had never missed a payment and her credit was stellar. She called Wells Fargo. She asked if there was anything she could do to negotiate the situation. The customer service representative gleefully told her that Wells Fargo was” happy to help,” but that she needed to be 3 months in arrears before they would consider her application for assistance.

This is seemed counter intuitive to Linda. She was concerned what it might do to her credit to miss payments and she could not understand why a bank would be advising her to stop making payments. It made no sense. Skeptical, she kept paying.

But then her financial situation continued to deteriorate. She was still unemployed and the mortgage was getting more and more difficult to manage.

Her house was now worth less than she owed on the mortgage (“underwater”), she was upside down and so she could not sell it. Every time she spoke with Wells Fargo she was told she must be three months behind. She assumed that the bank would not mislead her so she eventually did miss three payments.

She then called the bank again to request the help they suggested and she was told she needed to apply by completing a Request for Modification Application. And so began a 2 year battle to qualify for a modification, destroying her credit, destroying her life and resulting in the loss of her home.

During this time she was diagnosed with cancer. While she was fighting cancer, she was also fighting Wells Fargo. Fortunately, she was rehired as a teacher. So she was working, going to treatments and completing reams of documentation for Wells Fargo to desperately qualify for the modification. Over and over again they would lose her paperwork or say they never received it. She spoke with over a dozen people and would have to restate her situation over and over again. They would request the same documents over and over again saying that the previous ones had gone “stale.”

Then she received her Notice of Trustees Sale. This was not only alarming; it was confusing as she had assumed that Wells Fargo was going to eventually award her with a modification of some sort.

She was still struggling financially and now had medical bills but she was working again and felt she should be able to pay her mortgage payment again. She suggested simply resuming payments in accordance with the original terms. Wells Fargo said she must repay all of the arrears at once or they would sell her property via a trustee sale.

They denied her loan modification and she was advised to reapply multiple times, the classic “delay and deny” strategy that banks do. She did not have the funds to repay what was now 24 months of payments nor did she have funds to hire legal assistance. She was now over her head. She had tried letters to the AG but got “canned” responses.” She was caught in a vice that was quickly tightening all around her,even as she was battling for her life.

By the time she called me, there was little I could do as the house had been sold back to Wells Fargo. They were preparing to evict Linda. By this time she was undergoing stage four cancer treatment. Linda was dying.

An attorney in our office graciously drafted a letter to the Trustee to request that they stall the eviction as Linda was literally on her death bed in Providence hospital in Everett. Wells Fargo agreed to postpone the eviction. However,I received a desperate call from Linda, as she lay in her bed at 8 am one Monday morning, that her neighbors had informed her that someone had thrown her belongings on the front lawn.

I immediately drove to her place. What I saw brought tears to my eyes. 15 years of Linda’s life lay scattered all over her front yard, broken and exposed for all the world to see. Broken picture frames,lamps, couches, and her bed all lay on her front lawn. Some members of her extended family showed up to help take some of it to a storage unit. I called media and they showed up but the story was never aired. I had my own camera man film it as well and take pictures because I could not believe what I saw and wanted the world to know (with Linda’s permission).

Linda and her family were devastated and could not understand the bank’s cruelty and lack of compassion. Nor could Linda understand how she had gotten to this point by taking a bank representative’s advice just a couple years ago. Initially, she had excellent credit and may have been eligible for a re-finance with another lender, but now that option was eliminated and she was at the win of Wells Fargo.

Despite all this, every time I spoke with her she was pleasant and upbeat. I couldn’t fathom how someone could have that sort of strength. She was certainly not the “deadbeat” homeowner that the media and bank advocates like to characterize borrowers as.

I still can’t understand why she was unable to get any sort of help to save her home. I was well aware of the bank malfeasance and that Wells Fargo probably could not even prove they had any interest in the loan but that required litigation to prove. Litigation few homeowners like Linda can afford.

Wells Fargo prosecuting her now, never loaned her the original funds and they probably purchased the loan after the fact for pennies on the dollar. They may have even gotten some of the TARP funds or some other sort of financial windfall!

I’ve seen misrepresentations, backdating of documents, missing or voidable documents, and even outright fraud in the paper work. Lorriane Brown of Docx, is serving time in federal prison for her part in manufacturing documents for foreclosures. Millions of documents were rubber stamped (robo-signed) and destroyed the integrity of a 200 year old title recordation system.

The problem is that to legally prove this, it’ll cost a homeowner thousands. Often courts require them to pay funds equal to their mortgage payment into the court registry as a monthly “bond,” while simultaneously having to fund their litigation. If they had that sort of money, they would not have been at the mercy of the banks to begin with.

Further,the banks have deep pockets and know precisely how much money the homeowner hasbecause the homeowner provides all of their financials during the modificationattempt and they leave no stone unturned. The bank attorneys then use the system to once again delay and drive up the cost of litigation to drain the homeowner’s resources.

The banksters know that with each motion to compel them to cough up evidence, there is more billable time; they know that to send our office a box of worthless documents for us to review in return for our request for production, will cost our client more money. They know the 11 areas of law that this area of law integrates, because they’ve fleets of attorneys.

We often find ourselves facing multiple bank attorneys. It’s not only like a paper rape, it’s like a gang bang.

I call this a cluster**** of a situation and have seen dozens of homeowners violated and left exposed with no protection at all from the government officials charged with protecting their rights and our systems. After all these are just a bunch of “deadbeat”homeowners, right? They deserve what they get. They “bought more house than they can afford.” This is analogous to blaming the girl with the low cut blouse for being raped. She asked for it, right?

After Linda was paper raped and lost everything she had worked her entire life for, after she fought for 2 years for her home and for her life, and after her life had been exposed for all of the world to see on her front lawn that cold Monday morning, Linda died.

This story would be tragic enough if it was an isolated incident, just one case that“slipped through the cracks.” But it’s not. It represents nearly 15 million foreclosures in this country and is not unique to Wells Fargo. All of the international banks follow the same pattern. I suspect it is a business model.

As frustrated as I am with the banks and the government, I am more frustrated with the American people. We will take to the streets to fight for equality. We will march to the capitals to demand our gun rights. We’ll petition for most every cause under the sun but we stand idly by as our neighbors, friends and family are victimized by this tragic banksterism behavior. Despite settlements, investigations and lawsuits indicating the contrary, we accept that this is a deadbeat homeowner/lazy American problem and go about our business. Everything is fine, keep shopping. At least if it’s not happening to me . . . yet.

As I recall Jesus turning over the money changers tables, I wonder where the church is on this. As I see the fraud in the records, I wonder where law enforcement is. As I sit in on hearings and assist valiant attorneys fighting for their clients in David and Goliath battles, I wonder where the justice is.

After nearly 8 years there still has been little response from the public, from our government and certainly not from the financial services industry. Oh, there have been some back door settlements but the banks scoff and pay what amounts to the cost of doing business. The Consumer Financial Protection Bureau was established and here in Washington the WA Foreclosure Fairness Mediation was established, but the banks have found work- arounds.

We’ve several recent Washington State Supreme Court cases finding in favor of the homeowner, but then the banks lobbyists just influence our legislators to write around the law. Many of the legislators I spoke with, did not even really understand the law governing non-judicial foreclosure in our state.

There has been no real response that has stopped the banks in their tracks to the beat goes on. Unfair & unlawful foreclosures continue though I am told “the recession is over.” But then why did King county have a 21% rise in homelessness last year? I have a contact, who is a property preservation contractor. He tells me he’s getting 5-6 properties a week.

I have driven through communities that looked like ghost towns with empty homes (and vacant commercial buildings). I know that each one of these houses tells a story. A story of a family destroyed; a story of sorrow, pain, struggle and sometimes even death; a story that should speak to us all.

This is the story I am trying to tell. It’s the story I will shout from the mountain tops until it gets the response it deserves. I will continue to fight for justice,decency and compassion for borrowers. I will continue to comfort those afflicted. This is my new religion, to do good and to love where love is absent.

I write this story not just to tell the truth but also as a message to my children whom I love so dearly and who have sacrificed so much as I have been in this effort for the last 7 years. I recognize they too have paid a significant price. This is a pain I carry in my heart. I pray that they understand I just can’t quit. I must do what I feel God has called me to do, no matter the cost. I have seen too much.


Back to July 2015 Archive


CFLA was founded by the Nation's Leading Foreclosure Defense Attorneys back in 2007 to serve the Foreclosure Defense Industry and fight pervasive Bank Fraud. Since opening our virtual doors, CFLA has rapidly expanded to become the premier online legal destination for small businesses and consumers. But as the company continues to grow, we're careful to hold true to our original vision. For us, putting the law within reach of millions of people is more than just a novel idea—it's the founding principle, just ask Andrew P. Lehman, J.D.. With convenient locations in Houston and Los Angeles, you can contact Our National Account Specialist and General Manager / Member Damion W. Emholtz at 888-758-2352 for a free Mortgage Fraud Analysis or to obtain samples of work product, including cutting edge Bloomberg Securitization Audits, Litigation Support, Quiet Title Packages, and for more information about our Nationally Accredited and U.S. Department of Education Approved "Mortgage Securitization Analyst Training Certification" Classes (3 days) 24 hours for approved CLE & MCLE Credit (Now Available Online).

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