Down the Up Escalator (21 page)

“No matter how many times they ask, I’ve always complied in full,” Balty said.

“I bet you didn’t submit this in full,” I said, indicating a request for utility bills and death certificates.

“Well, there hadn’t been any death in the family. That was my response.” He had, however, resubmitted the utility bills.

One letter I pulled from the pile indicated that Balty’s case was being transferred to another unit within the bank. To me that sounded hopeful, especially since he’d been transferred to the Hope Team. (“It had something to do with the stimulus package,” Balty said.) More recently, he’d been transferred to the Escalation Q Unit. An escalation also sounded hopeful. But in Balty’s experience each transfer meant that he had to start all over with someone new.

The letter on the top of the pile was in answer to a formal complaint he’d lodged. I read a paragraph:

The bank’s own description of its “repetitive and lengthy” process with “unforeseen occurrences beyond anyone’s control” sounded a lot like Balty’s description.

After examining this and other documents, I still couldn’t make up my mind whether Bank of America’s modification process was carefully crafted to squeeze out the last possible payment—I could imagine a consultant saying, “Statistics indicate that people will continue to pay for an average of two and a half months if given a direct phone extension to call”—or if it was an ad hoc agglomeration of procedures that grew up while the bank tried to figure out what to do with all these underwater houses.

Whether the process was planned or ad hoc, the bank was stalling. To prevent homeowners from stalling in return, its first modification communication warned that any mortgage payments missed during the negotiations may be reported to credit bureaus and that the bank could go forward with foreclosure regardless of the state of the negotiations.

I could understand why the bank would want to delay making a decision while the borrower was still paying in full. But I was losing track of Balty’s strategy. Mr. Alatas was fifty-five years old and unemployed. There seemed to be no way he could go on paying any mortgage, no matter how modified, unless he found a good
job. But that was statistically unlikely. Mightn’t it be better to stop paying his mortgage sooner and save some cash for the inevitable move?

As Balty continued pulling documents from the pile, I remembered a scene from
Catch-22
. Yossarian is tending a soldier’s arm wound when he notices that the man’s guts are spilling out. Since there’s nothing he can do about the guts, he turns back and busies himself bandaging the arm. Was Balty’s meticulous form filing a way to hold the truly insoluble at bay?

“What if you tried to sell now?” I asked the Alatases.

“I think we would owe about twice as much as we could get from a sale,” Balty answered.

“Well, what if you just stopped paying?”

“That’s what everybody says,” Debbie said with a sigh. “But we’ve worked really hard to have good credit.”

“And maintain that credit,” Balty added. “And besides, it’s …” He seemed almost embarrassed as he said the next word: “Ethics. It’s a question of ethics or—”

“Feeling responsible,” his wife said to help him out.

“My parents did not cross two continents and live on three continents in order to move backward. They were serious about what they wanted out of life for themselves and for their future generations, and that meant living up to traditional values and commitments.”

To Balty’s father, honor had required remaining loyal to the Dutch colonial army till the very last minute. His son seemed to be almost as loyal to Bank of America.

So they sat amid the lemon trees in a landscaped cul-de-sac out of which they daren’t send their child to play. They were trapped sociologically, trapped ethically, and trapped financially.

As I was leaving, Debbie gave me some lemons, and Balty printed out a map to my next stop. I couldn’t imagine the Alatases stealing away from their house in the middle of the night. But it was even harder to imagine them paying all that Bank of America demands on their underwater property. Something’s gotta give. As the couple waved from the doorway, I worried that it would be Balty’s heart.

Two Surprises

A year later I checked back with the Alatases and got two surprises.

First, Balty has a full-time, permanent executive job. He works at his former level for a company that does the same kind of training as his old firm. He’d taken a $15,000 pay cut, but, he said, “Everyone in my position is ready to make that kind of sacrifice. We’re just happy to be working.”

“How’d you find it?” I asked.

“I spotted it on Craigslist, I called, I came in, they hired me.”

“You must have been a perfect fit,” I said.

“I am a perfect fit,” he answered factually. “But when I came on board, I kept looking over my shoulder, sure that I was going to get axed. My program is growing, my supervisor likes what I’m doing, but I’m still looking over my shoulder. It’s PTSD [post-traumatic stress disorder]. I’m sure it’s not that uncommon for folks who’ve gone through what we’ve gone through in the last few years. I wonder how long it lasts.”

Follow-up studies from previous recessions indicate that after a decade most workers who’d been laid off hadn’t reached their pre-layoff expected earning levels. But I’ve never seen a study of how
long it takes to recover pre-layoff emotional levels. I have no idea how long Balty’s PTSD is likely to last.

I wonder about the lasting emotional effects on children who’ve watched their parents live through long bouts of unemployment or other forms of insecurity.

“How’s Stefan?” I asked. “Is Debbie homeschooling him?”

When their four-year-old hadn’t made it through the lottery for Vallejo’s one charter school, the Alatases enrolled him in a Catholic preschool. “We liked the program and he
loves
it. My other children were athletes, but school is going to be his thing!”

Even over the phone (Balty was talking to me on his commute from work), I could feel the warmth as he described his son singing his heart out in a preschool choral performance.

“But it’s five hundred a month, and that is cheap for a private school. Five hundred a month for kindergarten?”

Schools open in September, but Balty hadn’t started his new job until November. I wondered aloud how the couple had paid Stefan’s fees in the interim. “Your in-laws again or …?”

Here’s where I got the second surprise.

After a year and a half of negotiations, Bank of America had formally rejected the Alatases’ request for a mortgage modification.

“When Bank of America sent us that letter ‘you’ve been denied,’ we stopped paying.”

“You stopped paying your mortgage?!”

“What I’ve told every single Bank of America person who’s called since then is ‘We worked with you in good faith for a year and a half. I understand that from your perspective me continuing paying you would look good. But if I pay for another year and a half, what will change?’ Now we’re using some of that money for school fees.”

“So what do you think is gonna happen?”

“The bank basically says, ‘Well, we haven’t moved on your house.’ And I say, ‘If you want it, come take it. I was out of work for fifteen months; we depleted our savings; we paid you in full for a year and a half. You’ve taken practically everything else we have. If you want this house, come take it.’ They haven’t done that yet.”

“You know, Balty, you sound terrific.”

“We’re still willing to work with them if they give us something. But right now we’re not paying them anything, if that makes sense?”

“Not only does it make sense,” I said, “it seems almost liberating.”

“It truly is,” Balty agreed. “Before we were kind of feeling like we were bad consumers, we weren’t responsible people, all those things. But after having tried to work with the bank for a year and a half, I know that we were not irresponsible.
I know we’re not deadbeats
.”

“Was that a dog?” I asked.

“Well, I just got home,” Balty answered. “Did you want to check in with Debbie?”

When I heard Debbie’s voice—sweet and still tired sounding—I sputtered about how often I’d put off calling them. “I feel like a ghoul calling people whose bad outcome is my story. But Balty’s job, Stefan’s school, you’re my first happy ending.”

“Yes, we’re thrilled,” she said.

“What will you do now?” I asked. “Do you want to stay in the house as long as you can, or are you just waiting for a chance to move on, or to …?”

Debbie cut off the list of options. “I kind of resigned myself a while back to taking it one day at a time. If you try to plan, there’s so many ifs that it gets overwhelming.”

What a surprise! Balty Alatas stopped paying his mortgage and intends to live for free till either they kick him out or he finds it convenient to leave. I had been looking for a trickster ready to say, “Show me the mortgage.” But here was a solid citizen saying, “Okay, you own this house. But so what?”

Her Day in Court

When I was in California in 2009, creditors seemed to be foreclosing slowly, or at least erratically. In 2011 a group of mortgage investors who used Bank of America as their servicer were awarded billions of dollars for losses suffered due to delayed foreclosures. Their lawsuit revealed that the bank had been taking an average of a year and a half from a default to foreclosure. Other mortgage servicers were having similar, though perhaps less extreme, difficulties dealing with all the delinquencies. That’s one reason why savvy borrowers like Cindi, Amanda, Balty, and Bibi San Antonio had the leeway to investigate their options and, on occasion, even time their ousters to suit their own convenience. But that wasn’t the case for everyone.

There had been over half a million repossessions in California between 2007 and 2009. Many of them involved agonizing uncertainty, as I was reminded when I attended a court session in the predominantly black city of Richmond, California.

————

There were no microphones in the Contra Costa County courtroom, so I missed a lot of what was said. But at one point the defendant, a solid woman with a strong voice, asked, “When will this happen, Your Honor?”

The judge replied with an emphatic iambic: “The house belongs to them!”

The evictees in
Wells Fargo v. Epps
were a sixty-year-old woman and a tall, elderly gentleman so frail he seemed slightly transparent.

“Mr. Dorsey is claiming tenancy in the property,” the bank’s lawyer explained to the judge.

“You were a bona fide tenant before the foreclosure procedure started?” the judge asked the frail man. (A tenant has ninety days to vacate after a foreclosure.) Mr. Dorsey handed papers to the bailiff. The judge and the bank’s lawyer mumbled over the rent receipts and leases. Something predated something else, I thought I heard. For that or other reasons the documents weren’t good enough to delay the eviction.

Mrs. Epps tried another tack.

“I had been working with the mortgage company for a year for a modification. They told me I could go to NACA”—the Neighborhood Assistance Corporation of America is a private organization whose counselors help homeowners negotiate with their mortgage servicers—“but two weeks later they took the property.”

“If someone misled you,” the judge said, cutting her off, “you may have a cause of action in
another
court. But
not
in
this
court.” And once again he uttered that iambic finality: “The house belongs to them.”

Mrs. Epps shoved her papers into her purse and headed toward the hallway. She still had some will in her walk, but Mr. Dorsey moved like a wraith.

I was at the courthouse to meet a blind woman in a wheelchair who was also losing her home. A Legal Aid lawyer had already set up the interview. All I could do was pursue this Mrs. Epps into the hallway to see if I could meet her later.

“I fell behind to bury my son,” she explained as soon as I introduced myself. “He was killed in an unsolved murder … I called them [the mortgage company] and said, ‘I have to bury my child; I need two months. Will you work with me?’ They said …”

I asked if we could meet for lunch, but Mrs. Epps, a home health aide, was going straight back to her patient. She suggested that we meet at the Mexicali Rose in Oakland that evening.

“My Head Feels Like a Pincushion”

When I arrived at the restaurant, Alice Epps was already seated. Alone in a booth for four, she looked small, but she reinflated when we started to talk.

“I can’t believe what happened today … Put ’em on a separate plate,” she told the waiter when I said I’d skip the French fries that come with the pork chops and rice and beans. “I’ll take ’em home.”

The word “home” seemed to remind Mrs. Epps about the imminent visit from the sheriff and the four floors of furnishings waiting there. “I hear they hold your things ten days before they dump ’em.”

Mr. Dorsey was also waiting back home for her. “I phoned him to come eat with us. He said he felt too weak to get off the bed.” Mr. Dorsey is a diabetic. The county pays Mrs. Epps to care for him a few hours a week. By a separate arrangement, she’s also his landlady.

In her agitation Alice began telling me about the many mortgage
“shams”—that was a word she used frequently—that she’d encountered. Mrs. Epps had bought her house in Richmond for $35,000 in 1972. By the late 1980s she’d paid off her mortgage and owned the house free and clear. During the housing boom Alice got letters and almost daily phone calls offering her first tens of thousands and then hundreds of thousands of dollars in refinance loans against the increased value of her home. She ignored them until her daughter started college.

“I saw what she was paying for rent, and I said, ‘Eight hundred dollars a month!’ You could be paying off a house note for that money.” Meanwhile, her married son was renting next door. “I was so comfortable with my child next door to me.” This was the son who was killed. So Alice made the fateful decision to leverage her primary asset.