Lillie Mae Washington Photo: James Seymour

Lillie Mae Washington may have been conned into an outrageous mortgage by a firm that had its license revoked. Ocwen Financial wants to evict her anyway.

— By Nick Baumann

 

That includes Ocwen, Washington's mortgage servicer, which she says has been trying for over a year to evict her from the home where she has lived for nearly four decades. Washington paid Ocwen—a giant company that services hundreds of thousands of mortgages in all 50 states, often on behalf of big Wall Street banks that hold the mortgages—as long as she could afford to, but the payments were more than three times higher than what she expected when she signed the mortgage documents. A judge's mediation order temporarily stopped Washington from being kicked out late last month, but her lawyer is far from confident that she won't be asked to leave again.

Many of the original defendants in Washington's case are now either insolvent or out of business—in short, they're gone. But the documents in Washington's case make it clear that the defendants believe they can't be held responsible for fraud at mortgage origination. Mitch Abdallah, Washington's latest lawyer, doesn't see it that way. "Once you're responsible for a bad act," he says, "you can't wash your hands of the taint by simply signing the dirty document to someone else."

"At this stage in life we're not supposed to have this happening," Washington told me by phone last Friday. "At this stage in life there should not be all this going on."

Washington's story starts the way many similar tales of alleged mortgage fraud do: with a call from a salesman.

In October 2006, a representative from a company called Home Loans Direct called Washington's home and arranged an appointment to visit. Washington's son Hobert, who was a co-owner of the house, had already signed the mortgage separately, without Lillie Mae's knowledge. Hobert Washington was suffering from Alzheimer's, and his "cognitive impairment would have been immediately visible and obvious to anyone who spoke and interacted with him," according to court documents. Hobert had incontinence problems, an eye that bulged out of its socket, and fell frequently, says his brother, Bobby Washington.

Hobert "invited the lenders into her home," Abdallah says. "The son suffered from Alzheimer's, so he wasn't in the best of shape to be giving advice or counseling his mother. They sat down and offered her a loan that she probably shouldn't have taken and was filled with representations that aren't accurate."

According to court filings, the salesman came to Washington's house and promised that she could get a fixed-rate loan at "about 6 percent," pay "no more than $700 a month," and even get $80,000 for repairs. He said the payments would not start for six months. Washington signed on the dotted line.

According to legal documents, the loan agent had Washington sign a standard mortgage form without even showing her key documents that outlined information on how much she was borrowing, how much interest she'd be paying, and how much her payments would be.

Perhaps Washington was foolish to rely on the salesman's verbal representations, but federal law is clear. It requires that disclosures about mortgage terms be made "clearly and conspicuously," "grouped together," "in writing," and "in a form the consumer may keep," all "before consummation of the transaction." Washington alleges that the disclosures made to her failed to meet many of those conditions.

Home Loans Direct, the company that allegedly sold Washington the mortgage, no longer has a real estate license. It surrendered the license in 2008 during a state investigation, according to records from the California Department of Real Estate. In addition, one of the company's officers, Jorge Ricardo Cruz, had his license suspended and later revoked. A California Department of Real Estate document [PDF] obtained by Mother Jones explains that Home Loans Direct surrendered its license after deciding not to contest allegations that it:

knowingly advertised, printed, displayed, published, distributed, or caused or permitted to be advertised, printed, displayed, published, distributed, statements or representations with regard to the rates, terms, or conditions for making, purchasing, or negotiating loans on real property which were false, misleading, or deceptive.

 

 

 

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http://motherjones.com/politics/2011/08/96-year-old-foreclosure-ocwen