need to add title here

There goes the neighborhood

December 18, 2011 1:38 PM

Bank foreclosures and abandonment are causing high home vacancy levels in neighborhoods across the country. Scott Pelley travels to Cleveland, a city that's fighting back against blight.

There Goes the Neighborhood
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by DuAllServices May 16, 2012 5:22 PM EDT
In the Twin Cities, we have a lot of foreclosures, but the cities have yet to begin demolishing homes. I spend a lot of time working on cleaning up these properties for the banks, so I get to see what they look like when people are evicted, and what they choose to leave behind. Check out this website for some fascinating pics of what these houses look like: www.duallservices.com/blog
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by 1Super-man February 1, 2012 1:30 PM EST
This mortgage crisis is putting all of us in frenzy. But the banks aren't telling us the facts; they keep feeding us empty promises. There seems to be no relief within this mortgage crisis. Check this website www.nationwidepropertysolutions.com. They provide audits which show who really owns your loan and investigate wrongful foreclosures and the truth to this mortgage mess.
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by dhk11 January 7, 2012 12:52 AM EST
September 2008, our family began to struggle to handle the interest only mortgage we had with Countrywide. Although we had yet to be late on any mortgage payment and had always paid in full, we began to be alert to ways of reducing our rate on our loan.
On the evening of November 20, 2008, we saw a live local news broadcast from the Sacramento Housing and Redevelopment Agency encouraging the public to attend a free mortgage refinance workshop where lenders such as Washington Mutual, Wells Fargo, Countrywide, Chase, IndyMac Bank, Bank of America, and Wachovia were on site providing "one-on-one" sessions with loan modification specialists to help struggling homeowners process loan modification applications. We quickly rushed down to Sacramento to attend the event.
Countrywide required a 3 month forbearance agreement be filled out. Within 2 weeks Countrywide sent a letter indicating they had modified our existing loan, reducing the rate to 4 percent with payments to begin March 2009. The letter further stated there was nothing we needed to do further to receive this rate. We began making payments as agreed on times starting March 2009.

The loan was sold to Bank of American May 2009; they suddenly started charging late fees pointing to the old 7.125 percent rate. We provided them paperwork and they later reversed the late fees. Bank of America then sold the servicing to Residential Credit Solutions (RCS) July 2009.

After making payments for 6 months on time at the new rate, RCS returned our August 2009 payment on 8/10/2009 along with a "Notice of Intent to Take Legal Action" dated 8/24/2009 demanding over 19,000 dollars in interest and late fees pointing to the OLD 7.125 percent interest rate.

We sent RCS the documents substantiating the agreement, but they would not acknowledge them saying Countrywide did not setup the loan correctly. RCS continued to foreclosure.

After spending over 34,000 in attorney fees, which are "non recoverable" in California, I finally ran out of money and ended up going Pro Per. I wrote my own complaint, summons, Ex Parte Application for TRO, Order to Show Cause, and Proposed Order submitting more than 300 pages of evidence of never being late. The bank's attorney showed up to the hearing; it was a sweet victory to hear the judge sternly reprimand the banks actions and Grant the Enjoinment stopping the foreclosure until the case can be heard!

All enjoinments require bonds in the event the court was out of their mind and the defendants actually prove the enjoinment was not correct. The court ordered our normal mortgage payment, which we gladly have made the last 3 months. However, for the month of January, we are to come up with 35,000 for interest they refused to accept as part of the bond.

RCS remarkably tried to later argue by filing a Demurer stating I had not made payments for over 2 years and that we had made payments we had not, which caused me to file the First Amended Complaint referenced above adding an additional Cause of Action for an Accounting. I filed the amended complaint a few days before the demure hearing causing the court to cancel the defendants demure (another sweet victory).

We have tried in SO MANY ways to work something out with RCS/FANNIE MAE, but I believe there is just too much money on the table to be made from FDIC Loss Share Agreement reimbursements that cause corrupt individuals at the top to turn away from actually granting a modification. That is why so many HAMP loans never really work.

I have learned SO MUCH from this experience. My attorney, who now resides in the background ($350.00 an hour) has written off many hours lately because I think he gets a kick out of a pro-per guy going in and knocking down bank attorney with evidence and subject matter. I tell him, this was as hard as my Master's Degree Thesis and I really would rather he do this, but I really need to keep the money at this point.

I can easily provide all my evidence to anyone that might want it. We can provide copies of the original Complaint and First Amended Complaint filed as well as the Judges order to the original Complaint.


We are appalled at what has happened to good people of America. The economic collapse can easily be attributed to corrupt individuals who have abused relaxed lending laws instantiated earlier this decade. We hope our story shows just how bad financial institutions have become. Currently Nevada's Attorney General, Catherine Cortez Masto, has led an unbelievable fight against Bank of America (I have personally had to argue with B of A attorneys about our loan agreement). California Attorney General, Attorney General Harris, recently joined Catherine Cortez Masto to form a joint investigation alliance designed to assist homeowners who have been harmed by misconduct and fraud in the mortgage industry.

However, I think we need to make ourselves heard. I wish us the best.
Doug Kelley
Rocklin, CA
dhk.kelleyATgmail.com
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by scaredtodeathofyou December 28, 2011 12:39 AM EST
This is greed at its finest.. you would think banks would step in and write down the principals on these properties, after all a little bit of money is better than nothing and here.. We bailed out the banks!! Where is the gratitude in this greedy country!! Hard working people deserve a break thanks to our finest government we can say we are poor!
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by GAK62 December 25, 2011 4:06 PM EST
Why is the city left with the bill of demolishing all these houses. The banks OWN these properties!
If the banks refuse to pay for the demolition of the house, then they have forfeited the property to the city.
Why can't the city then just hand the property back to the original owner?
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by kbbpll December 24, 2011 1:49 PM EST
If anyone has an update on Linda Bizzelle and the others in this story, please post.
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by PamMarron December 22, 2011 6:14 AM EST
Thanks for shedding a serious light on the plight of underwater homes in the 60 Minutes segment entitled "There Goes the Neighborhood!" We are also seeing the growing trend where banks decide not to accept taking properties back into REO pools in Florida. Here's the question: If banks can refuse to take their property back, avoiding further responsibility for taxes and other debt to their bottom line, aren't the banks in effect, strategically defaulting on these properties?

A strategic default is the decision by a borrower to stop making payments (i.e., to default) on a debt despite having the financial ability to make payments.

Underwater homeowners that short sell their home must prove hardship, often starting with the bank telling them they must be in default on their mortgage payment in order to be processed for short sale approval. Often, the short sale occurs after homeowners have dipped into or wiped out savings and 401k's, and don't have the vast difference of funds needed between what is owed and what the property can now sell for. Often, these short sellers are perceived as strategic defaulters when they are still employed, and vilified as the reason our property values continue to fall.

In the 60 Minutes segment, banks elect not to go to the sheriff's sale, avoiding the debt of improvement or demolition to the homes they own. This cost is then left up to budget strained cities, towns and municipalities to deal with, along with the task of figuring out what to do afterwards with these abandoned properties.

In light of all of the press that shows banks are making record profits, this seems like the banks are strategically defaulting on their own properties. The difference is that the loss is written off on the bottom line, with no destruction of credit, reduction in assets, or inability to repurchase a home again for a prolonged time.

These same banks and lending institutions put additional underwriting guidelines, called overlays, on current mortgage products that prolong the ability for past homeowners who have gone through a short sale from obtaining another mortgage. And we wonder where all the homebuyers are? They are renting in our neighborhoods, because we have made it so extremely hard for them to get a mortgage, and those that do look are disgusted or can't afford the cost it would take to bring these homes back to a livable condition.

Pam Marron
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by Bob-91355 December 21, 2011 4:56 PM EST
We are still a republic, with local and state governments. Talk to your local officials about changing foreclosure law. Simply, ask for a law that will not allow the foreclose process to complete, before the bank has a real buyer for the property. Not a shell company, but a real owner with community interest. Then after the sale have the foreclosed owner move out. People get out and talk to your local government, find out what they need to act. Believe me, the banks are not following the letter of the law, and people are not standing up and fighting in court. The masses may be good people, but they are shell shocked. Are you?
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by looier December 21, 2011 4:45 PM EST
Hey fools,

"Nursing" means CNA, LPN, and RN.
Most likely she is a CNA or LPN. Cities are laying people off. Good thing she want to stay in a home worth half the market value.
Give her credit for that.

Most of you buy Mcmansions, or properties beyond YOUR means and YOU "walk away," blaming everyone, including people like these on this show, but yourselves.
Judgmental fools.
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by rob1099 December 21, 2011 12:56 PM EST
You gots to get a job girlfriend!!
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