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Foreclosure foiled

 Spare Change News (USA) 04 June 2019

Homeowners facing foreclosure scored a major victory after a local bank decided to discontinue court proceedings to evict a Chelsea family who declared bankruptcy earlier this year. As Adam Sennott reports, Deutsche Bank dropped its eviction case against the family of Chelsea resident Daniel Baptista due to a potential legal dogfight from Baptista who was being advised by the Chelsea City-Wide Tenants Association of the Chelsea Collaborative.  - By Adam Sennott

According to a June 13th article on the USA Today's website by AP Business Writer Alan Zibel, in the month of May alone 261,255 homes across the United States received at least one foreclosure filing, up 48% from May 2008. Zibel's article also quoted Rick Sharga, RealtyTrac's vice president of marketing as saying,  "About 50 to 60% of borrowers who receive foreclosure filings are likely to lose their homes, Sharga said. The rest are likely to be able to sell or refinance."

Rachel English, Community Organizer for the Chelsea City-Wide Tenants Association, noticed this trend in foreclosures. "One of the things that we see a lot is that the banks are blaming the home owners, and they are saying it's the home owners' fault that they couldn't afford this mortgage. We always like to look at this from a larger prospective of, there was a system of speculating on the loans of breaking up the loans, of assigning people predatory loans. For example foreclosing on people even when the bank that is trying to evict them doesn't own the house. So there is definitely much more then just the individual homeowners signing something that he or she didn't understand. There's in some cases a very deliberate attempt by the banks to make money, and make it off people they knew they could take advantage of."

Homeowners facing foreclosure scored a major victory after a local bank decided to discontinue court proceedings to evict a Chelsea family who declared bankruptcy earlier this year.

Deutsche Bank dropped its eviction case against the family of Chelsea resident Daniel Baptista due to a potential legal dogfight from Baptista who was being advised by the Chelsea City-Wide Tenants Association of the Chelsea Collaborative.

According to their website, the Chelsea City-Wide Tenants Association of the Chelsea Collaborative is an organization dedicated to protecting the rights of low income tenants living in public housing, and protecting public and affordable private housing in the city of Chelsea.

"What the Chelsea City-Wide Tenants Association does is that we kind of prevent eviction after foreclosure," said Rachel English, Community Organizer for the Chelsea City-Wide Tenants Association. "Because the biggest practice is after foreclosure they will try to evict anyone who is in the building."

English added, "We go door knocking and we talk with people, and then on the foreclosure day we say, 'Hey listen, these are your rights. Know your rights, you don't have to leave the house, you can fight it in court."

This is exactly what Daniel Baptista, a native of Cape Verde who has owned his home on Library Street in Chelsea for nearly 20 years, did when he nearly lost him home after deciding to refinance his mortgage in 2004 with the help of Fremont Investment and Loan Cooperation.

"I refinance my home in 2004, and they tell me six months after I have the right to go and refinance again to lower my mortgage." said Daniel Baptista. "But after that I tried to refinance, but they [didn't] talk to me, and they changed to another bank, or a different bank it [the interest rate] kept going up, and up, and up, and never go down, and right now the interest I have it at is 12.5 [percent]."

The City Wide-Tenants Association's press release states stated that after the Baptista family became responsible for payments they could not afford, they declared bankruptcy in an attempt to avoid having their house foreclosed on.

"He had been told he could refinance, but within a couple months of Fremont Investment selling him the loan it went over to another servicer," said English. "And the new servicer, HomeEq (now owned by Barclays Capital) wouldn't let him refinance, so eventually Fremont tried to foreclose on the house in February of 2009."

However, Fremont Investment and Loan had begun to have troubles of their own. According to a March 7, 2019 press release by the Federal Deposit Insurance Cooperation, (FDIC) a cease and desist order was issued against Fremont Investment and Loan after the FDIC found that they issuing subprime mortgage loans which amplified the chances that a borrower would have to default, or else the bank would lose money.

The FDIC's press release read, "In taking this action, the FDIC found that the bank was operating without effective risk management policies and procedures in place in relation to its subprime mortgage and commercial real estate lending operations. The FDIC determined, among other things, that the bank had been operating without adequate subprime mortgage loan underwriting criteria, and that it was marketing and extending subprime mortgage loans in a way that substantially increased the likelihood of borrower default or other loss to the bank."

According to their website, on June 18, 2019 Fremont Investment and Loan (now known as Fremont General) filed for chapter 11 bankruptcy. Soon after Fremont declared bankruptcy they attempted to assign the deed to Mr. Baptista's house to Deutshe Bank.

Chelsea City-Wide Tenants Association of the Chelsea Collaborative's stated in their press release, "In Daniel's case, Fremont foreclosed and then later tried to assign title of the house to Deutsche Bank, who is now trying to get Daniel and his family out of the house."

However, Deutsche Bank's attempt to evict the Baptista family would not go very far after the Chelsea Collaborative used an example from another court case to prove that Mr. Baptista still legally owned the house, not Deutsche Bank.

According to the Chelsea Collaborative's press release, the prior case they used was the U.S. Bank National Association v. Antonio Ibanez, in which the Massachusetts Land Court declared "assigning mortgages post-foreclosure means that such foreclosures are invalid."

Though Mr. Baptista was able to keep his home, the City-Wide Tenants Association of the Chelsea Collaborative hopes other home owners facing foreclosure will realize from this case that they have rights, and can fight to keep their homes.

"That's actually the most important point," English said.  "Mr. Baptista didn't actually win his case, what happened is the case was dismissed. The reason the case was dismissed was the banks dismissed it themselves, that they realized that the foreclosure they had done isn't valid. So home owners should know if they are being taken to court that the need to look through all the deeds, or they should get a lawyer to help them look through all the deeds to make sure that the foreclosure is valid."

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