In 2000, Norman and his wife, Oriane Rousseau wanted to buy a home in Newbury Park, California. They were approved for a loan at a fixed-rate interest and they put their life’s savings as a 30% down payment on the home of their dreams.
They were responsible homeowners. They had never missed a single mortgage payment.
The housing bubble burst but the banks knew they could make huge profits by getting homeowners to drop their fixed-rate interest rates and into lower adjustable rates. The banks frankly didn’t care if the interest rate went up later: they got money from late-payment and missed payment fees, refinancing fees and then foreclosures with government support, government bailouts and huge tax write-offs.
In 2007, the Rousseau’s were approached by a loan officer about changing their mortgage from the fixed rate to an adjustable rate. Norman turned them down saying he’d rather stick with the fixed rate and know what he was paying each month for the life of the loan. But they pressured Norman and convinced him everyone was going to the adjustable rate and he could save $600. a month in mortgage payments. They’d even roll in some credit card debt so that would be paid off too. They said the worst thing that could happen was an increase of only a few dollars each month.
Norman gave in, but in 2009 he realized it was a huge mistake going to the adjustable rate. The interest rate was higher than in 2007 – higher than they were told it would be in the ‘worst case’ scenario. Norman and Oriane continued to make their monthly payments.
In May 2009, Wells Fargo claimed they had missed a payment. Norman went to the bank and told him he had made the payment, in person, with a cashier’s check. He even had the receipt. The teller’s receipt established the casher’s check was in the custody and control of the bank on April 1, 2009. The bank still claimed they never received the payment. A few months later they said they missed two more payments in June and July. Norman had given them a cashier’s check for each of those months – in person. Norman had the teller’s receipt for each of those months.
The Rousseau’s filed a dispute. Wells Fargo then said Norman had stopped payment on the cashier’s check. What? Stop payment on a cashier’s check? Let’s get real. What had happened is the bank didn’t apply the cash-equivalent funds to the Rousseau’s account. After receiving the payments, the bank is responsible for applying the money – not the customer. On August 3rd, 2009, the bank assured them they were current on payments. On August 8th, the bank claimed they now owed $3,478.25.
While they were in dispute, and concerned the payment problems wouldn’t be solved, they were told they should apply for a loan modification. They hired a law firm and submitted the loan modification application. Wells Fargo lost the paperwork, Norman resent the paperwork, the bank lost documents, Norman resent the documents.
The Rousseau’s kept resending ‘lost paperwork’ for nearly a year. During this time they were told not to make their payments while they were being considered for the loan modification and if they did make payments they’d be disqualified.
Each month, they saved their payments – just in case. They were worried, but they trusted Wells Fargo.
From the law firm they learned the adjustable loan they had received was 7.2% – higher than the 6.8% quoted. Enormous fees were added. The Rousseau’s had stated their income was $76,000 and the bank had increased their income to $136,800. The bank produced signatures – which later were proven not to be the Rousseau’s signatures. (According to a complaint filed in California Superior Court, the bank should have never agreed to the deal and that a loan officer “fraudulently doctored without their knowledge or consent” their financial information.)
The Rousseau’s were finally told they had been accepted for review in the loan modification program. They were also told to ignore any ‘pre-foreclosure’ notices they might receive as these notices were just routine.
The nightmare got worse. The bank told them they were in the loan modification program while demanding money from them. They tried paying and the bank refused to accept money from them. The bank demanded documents while saying they had received the documents. They were told they were denied their loan modification then told they started to reinstate the loan – back and forth, back and forth while accruing late fees, loan fees, non-payment fees and unspecified fees.
The fees kept piling up, Wells Fargo was calling all times of the day and night demanding payments. They got a Notice of Default – the bank told them to ignore the notice, it was just an automated notice and they were being considered for the loan modification. The Notice of Default stated they owed $17,348.52.
Wells Fargo filed a Notice of Sale on October 28, 2010. The Rousseau’s home would be sold November 22, 2010. Ten days before the sale, Wells Fargo told the Rousseau’s their loan modification was denied due to “insufficient income”.
The Rousseau’s consulted a real estate attorney and discovered they had a ‘right to reinstate’ their loan – something Wells Fargo never told them. They contacted the bank immediately and two days later, the bank finally gave them a phone number for Regional Service Corporation (RCS) – the trustee. RSC said the reinstatement would take two weeks and the trustee sale was going off as planned in 8 days.
Norman received their emailed reinstatement quote from the bank November 17th- but it expired in two days. They had to send $26,373.49 for reinstatement to Texas by the 19th.
They had enough money in savings to reinstate their loan but the money was in an IRA and would take more than 2 days to get. Wells Fargo refused to postpone the sale.
The Rousseau’s home was sold November 22nd.
They went through a series of attorneys. In July 2011, they had finally found an attorney experienced in foreclosure defense and the court granted an injunction contingent on them making monthly payments of $1,800.
By December 2011, they couldn’t make the payment. They had used up their money fighting the bank. Norman had been unemployed since the foreclosure. He was taking odd jobs as a handy man to make ends meet. Oriane’s hours of work had been decreased. Their attorney was now working pro bono.
Wells Fargo went to court and got the injunction dissolved and then proceeded with the Unlawful Detainer. They had a lockout date set for May 15, 2012 at 6am. The Rousseau’s lost their home.
On Saturday, May 12th, Norman found someone who had a 27-foot motorhome he could use. He brought the motorhome back to the house where Oriane and his stepson were packing the rest of their belongings.
The motorhome stopped running. He worked around the clock trying to get it running again. By Sunday morning he was so tired and still working on the motorhome without any luck. It was too big to tow – he was frantic. He had three years of constant pressure and stress and now the eviction was less than 2 days away. He had no more fight left in him.
His wife and stepson relied on him – how could this have all gone wrong? Twelve years earlier they had saved their money, put the 30% down on their home and planned on living there the rest of their lives. How could he have been talked into changing his loan and fallen into a 3-year nightmare battle with one of the largest banks – Wells Fargo?
On Sunday, May 13th, 2012, less than two days before the eviction, Norman, 53, went into his bedroom in his house, covered his head with a blanket so there wouldn’t be a mess, and shot himself. He died instantly.
Wells Fargo issued a statement saying their thoughts were with the friends and family of Mr. Rousseau. They also said they’re not to blame, they tried to find affordable options for the Rousseaus. They suspended the proceedings, but still intend to go through with the eviction.
Oriane can’t bear living in the house where her husband killed himself. She was living in a motel paid for by a church. In July, a yard sale was held with all proceeds and donations going to her. She has a lawsuit against Wells Fargo.
Oriane is starting to speak out for a Homeowner’s Bill of Rights, which would help homeowners renegotiate loans or establish a single point of contact for dealing with banks.
There are many options to help homeowners. If you are facing or may face foreclosure, contact a foreclosure defense attorney immediately.
Keith A. Gantenbein, Jr. is a Colorado foreclosure defense attorney located in Denver and servicing all of Colorado. He also handles bankruptcies, mortgage negotiations, lender liability, real estate, civil litigation, contracts and landlord/tenant. If you think you will be facing foreclosure, or are in the foreclosure process, or have had a wrongful foreclosure, contact Keith Gantenbein at (303) 618-2122 for a one-hour consultation where he will discuss your situation and go over all your options with you.