Down the Up Escalator (15 page)

Judge Schack noted in his decision that the address of the plaintiff, HSBC, is care of the large mortgage servicer Ocwen at 1661 Worthington Road, suite 100, in West Palm Beach, Florida, while the mortgage assignment was executed by one Scott Anderson, vice president of MERS, who gives his address as 1661 Worthington Road, suite 100. The judge, who not only reads the documents but remembers them, went on to cite previous foreclosure requests in which both Deutsche Bank and a Goldman Sachs real estate subsidiary were also said to be housed in the same suite 100. On one document Scott Anderson swore that he was HSBC’s servicing agent, and two days later he swore that he was a vice president of MERS.

“Did Mr. Anderson change his employer between June 13th and June 15th?” Judge Schack asked. “The Court is concerned that there may be fraud on the part of HSBC, or at least malfeasance.”

So before the Elsemeer foreclosure could go forward, Judge Schack demanded to see “an affidavit from Scott Anderson clarifying his employment history for the past three years … and an affidavit by an officer of HSBC explaining why HSBC purchased a nonperforming loan from Delta Funding Corporation, and why HSBC, OCWEN, MERS, Deutsche Bank and Goldman Sachs all share office space in Suite 100.”

In a general way, I could give him some of the answers myself. A mortgage servicer is delegated by the mortgage owner (which may
be a bank or an investor group) to handle collections and other contacts with the homeowner. Ocwen may have serviced some mortgages for all the banks the decision mentions. So it might be convenient for them to use Ocwen’s address for certain mortgage-related dealings.

MERS is a private registry set up in 1995 by Fannie Mae, Freddie Mac, and other major lenders to keep track of mortgages as they change hands in the Grand Allamande of securitization. One of MERS’s primary functions is to thwart my show-me-the-mortgage scenario through careful record keeping. But as we learned in the fallout of the robo-signing scandal, some twenty thousand people like Ocwen’s Scott Anderson, at mortgage companies around the country, were allowed to log in to the MERS computerized mortgage registry and make changes. In the middle of a gold rush this procedure for registering claims invites error at the very least.

The mortgage of Susana Elsemeer of Decatur Street in Brooklyn may have passed through many of Scott Anderson’s “employers” on its way to being lumped with thousands of others into Renaissance Home Equity Loan Trust 2006-4. Every step from originating this mortgage to foreclosing may have been sloppy and deliberately obfuscated, but was it any more malfeasant than the rest of the U.S. mortgage system? Does the judge really believe there’s fraud afoot in suite 100?

“If you’re going to take away someone’s house,” says Judge Schack, “it better be legal and correct.”

He handed me a copy of the Elsemeer decision, but I couldn’t extract the human story from the legalese, so I peppered him with questions. “No,” he told me, he’d never gotten that employment history from Scott Anderson. “Yes,” any corrected foreclosure papers would have to come back to him if the company had tried
to straighten it out. That made it likely that the matter had been settled out of court.

“So how did it end? Who got the house?”

When he shrugs, Judge Schack looks even more like one of those Russian dolls. But that was the only response he could make. All he can tell me about Susana Elsemeer and her co-defendant, Samuel Elsemeer, is “I bought them some time.”

“This Is My Tara”

I drove down the shopping street nearest the Elsemeer home looking for a supermarket, but all I saw were a couple of dismal food marts. A peeling three-story building with an empty storefront bore the sign “For Sale $1,000 Down, No Closing Cost.”

But as soon as we turned onto Decatur, we were on a tree-lined block of nineteenth-century Brooklyn. Six-Sixty was one of the most elegant town houses on the street.

No one answered on the parlor floor, but a male head emerged from the below-street-level door and told me that Susana Elsemeer was sleeping. I asked if I could speak to the co-owner, Samuel Elsemeer. “That’s me,” he said. “Susana is my mother.”

Samuel, a large young black man, made me comfortable in the kitchen on the ground floor, or “servants” floor, and went to check on his mother. “She’ll be right down,” he reported. Susana Elsemeer soon scurried in, lively as a squirrel. At the mention of Judge Schack’s name, she seemed to do a delighted little skip-hop.

Eager to be interviewed, Susana emphatically said, “I’ve lived in this house all my life,” giving me time to copy it down. But she quickly corrected the facile sound bite. “Well, I traveled a little,
and I was married a little. But I’ve lived in this house”—she did the calculations—“maybe fifty of my fifty-nine years.”

Her parents bought the house on the GI Bill in 1951, then raised their family and died there. At that time Susana was back living on Decatur Street with little Samuel. She had to buy her brother’s and sister’s shares of the house if she wanted to stay.

“That was only fair,” she pointed out. Still, she couldn’t help remembering, “I did all the shoveling snow and the heating and that stuff while their names were still on the title.” She had also helped pay off her parents’ mortgage from her earnings as a freelance typist when Samuel was a toddler.

“So I took out a mortgage loan to pay them off, and I used the leftover to replace all the windows. Then there was a water main break—that cost me $6,000 … later roofing, and then …” According to the foreclosure papers, there was a consolidated debt of $463,817.64 when Susana Elsemeer missed a payment in 2007.

By then she was working as a school secretary and boarding foreign youngsters from a Manhattan language school to pay the mortgage. “Because I had a young man in the home, I chose to host young guys—from seventeen to twenty-five or so is what they sent. Samuel would take them out in the mornings to the subway and point them in the right direction. He still gets birthday cards from one of the French kids that we entertained.

“It was very good money.”

“How much?” I asked.

“One eighty-five a week for a room upstairs and two meals.”

“Wait, you served breakfasts, worked full-time, and then cooked dinner every single night for a crowd of students?!”

“Well, I’m a big cooker, Samuel will tell you. Some things I don’t know how to make small.”

“Still,” I said, remembering my own single parenthood, “some nights you just want to eat a spoonful of peanut butter and sit there and stare.”

“Especially when I was the suspensions secretary at the high school. I was stressed, stressed, stressed. But in the beginning Samuel helped me. If I was tired, I put a good face on it for the kids.

“Then Samuel went off to the Job Corps to learn a trade and get his GED, and then I had the knee surgery, and then the recession came and the students dried up. First it got sporadic, but after Lehman Brothers and all that craziness the bottom dropped out. So at that point in time I was dealing with empty-nest syndrome
and
empty-pocket syndrome.”

That’s when Susana missed a payment and began the process of negotiating a series of forbearance agreements with her mortgage servicer. A forbearance agreement allows a debtor to pay a lesser amount and defer the rest, plus interest, to an agreed later time.

“What was it like dealing with Ocwen?” I asked.

“Ocwen?” Angst came into her voice. “I was working at a high-stress job; I was taking an Access-a-Ride back and forth to Manhattan, sometimes traveling four hours a day. Then you get home and call Ocwen, and it says, ‘The waiting time will be an hour and a half.’ ”

“They actually
said
an hour and a half?” I asked dubiously.

“Do you remember that, Samuel? They would say, ‘Waiting time two hours,’ ‘Waiting time two hours forty minutes.’ So you take your food upstairs and sit at the phone after work; you sit on the weekends. I called for months, and they would put me in a queue.”

“You must have gotten through to somebody, sometime?” I said.

“Yes, and you know what happened. I’ll never forget that. I waited and I got to someone in Indian customer service, and he
said he was going to transfer me to somebody else, and I said to him, ‘Please don’t put me back in that queue again.’ I said to him, ‘I have waited so long.’ I said, ‘
Please
, are you
sure
you’re going to connect me to a person?’ And he put me right back in the queue.”

“This was at a time when you were going into another default?”

“Yes. There was one time that I even had a check that sat in my dresser and I couldn’t get in touch with anyone.”

“So how did you …?”

“I wrote to the New York State Banking Department and—”

“You needed the New York State Banking Department to contact your own mortgage company?”

“What I found out is you don’t talk to customer service. What I found out is you’ve got to get through to the people who have the authority to make these decisions, and they did that. So this was a learning process.”

“That must have felt terrible,” I said stupidly.

“I felt like David facing Goliath, only I had no rock and I had no slingshot and I wouldn’t have known what to do with it if I had it. I felt small, powerless, put-upon, ignored—all of those good things.

“But Samuel will tell you, I’ve stood and I’ve fought for this house for a long time. I’m smart and I’m educated, in certain ways, and if I’m determined to find something out, you’re not going to keep it away from me. I contacted the New York State Banking Department, and then the office of the ombudsman from Ocwen called me, and we worked out a forbearance agreement.

“But it was a bad agreement because at that point in time I didn’t understand the difference between a forbearance and a loan modification.” A forbearance agreement temporarily lowers a monthly payment, but you still owe all of your remaining mortgage plus additional interest. A modification permanently changes the terms
of the mortgage by lowering either the interest rate or, less frequently, the principal that’s owed. “Besides, I just wasn’t financially stabilized at that point. When I had the students, I could pay it; when I didn’t have the students, I couldn’t pay it. This was one of my darkest points. I was in an agreement, but I couldn’t keep it.”

“So what did you do?”

“I stayed awake nights and I worried and I cried and I prayed and I did all that stuff. I thought about taking in foster children. I thought maybe it would be nice to have some older girls. You know, be a role model, a power woman. But I’m getting older. I mean, the interaction with the students was intense. You can imagine young girls and their problems and dramas. I said, ‘I’m going to have to do something; I’m going to have to declare bankruptcy. Let me first start out with a consumer credit counseling service.’

“I was in such a state, I was so embarrassed. You know how they tell you to bring your bills. I had paper all over this place, and all I could do is take everything in a shopping bag. The lady would ask to see something, and I would just pull stuff out. I said, ‘I’m not usually like this; I’m a secretary. I work with paper all day long.’

“Finally, she looked at the things and she said, ‘You’re asking for the wrong thing. This is not going to work. You have to go back and tell them that you need a loan
modification
.’

“I got to be the queen of modifications and forbearances. I was in two forbearance agreements that I couldn’t keep, then a modification.

“Then one August morning—schools were closed for the summer, and I was sitting upstairs worrying—a miracle came through the mailbox.

“At that point in time I was current on my latest forbearance agreement, so I thought I was safe for another month. What I
didn’t know until aftersight is just because I was in an agreement didn’t mean I was
safe
, because meanwhile they were going ahead with foreclosure, and rightly so.” Banks in modification negotiations reserve the right to continue with foreclosure and often go ahead. “So these two things were going along parallel with each other, and then out of the blue his decision came.”

Susana Elsemeer may not have heard about the bank’s foreclosure petition, but she saw immediately that Judge Schack’s answer to it bought her time. But time to do what?

“It took
two
miracles. If Judge Schack had said ‘fine’ and rubber-stamped it, everything would have been different. And the second miracle—maybe it was not the
best
of miracles …” Susana stopped herself short and directed her voice upward. “I’m sorry, God, I shouldn’t have said that.” Then she turned back to explain the lesser miracle to me.

“What happened is, when I first got working, I didn’t officially work for the city. I officially joined the Department of Education in 1994. I wasn’t aware for a couple of years that I could change my pension tier. Tier one is the old-timers, and naturally they have the best deal. I put in for a conversion, which is, I worked for the city for fourteen years, but now I’d be given credit, in certain ways, for twenty years. It takes a long time, but sometime during that summer they must have juggled the numbers. In the fall I got a statement. I barely had any money because, naturally, I’d taken out loans on my pension all along. But suddenly my pension—not the 401(k) part, but the other part—had an available loan of like $11,000. At that point I knew for certain,
I can manage
.

“You know something. To this day, and I am a woman of faith, to this day I don’t know why I got sent a copy of that decision. It didn’t make any sense at first, because I didn’t know I was in foreclosure.

But I read those first couple of paragraphs, and I laughed myself to death. All the problems I had with Ocwen seemed to be distilled in those paragraphs. I just sat down, I called up my girlfriend, and we laughed and laughed and laughed and laughed because she knew everything that was going on with me and Ocwen. She has a little kid’s voice and she said, ‘He certainly seemed angry with them.’ And I said to her, ‘Let me tell you something, I don’t know what this is all about,’ I said, ‘but there’s something good in it for me because they were the bad guys and he just chased them all back to this little room. All those big banks in one little room.’ I was just so tickled.”