They were gathered about five strong inside of a third-floor apartment on Quincy Street.
Justina Winfrey, a Quincy neighbor, organized this meeting on the 4800 block for other homeowners. The group of five, all women — two men and a few more women would arrive later on as the meeting was wrapping up — talked about their real estate experiences with a righteous fervor.
Monica Ford, a minister and licensed real estate broker, said she used to own about 50 properties between Gary, Indiana, Chicago and DuPage County. When the market flipped on her, she ended up losing all but one, a building in Englewood that she’s hoping to turn into either a shelter or a halfway home for men.
Ford, in some ways, is still reeling from the things she went through during one of the most spectacular economic bubbles in history. As she bore witness, attendee Gale Frazier, who’s also a minister with undergraduate and postgraduate degrees in civil engineering and education, responded with ‘Amens!’ and other exclamations.
“You had people doing all sorts of things years ago,” Ford recalled. “You had people who were not licensed real estate brokers brokering real estate deals. You had people going out negotiating with developers, saying ‘I’m going to get you these five condos sold, but this is what I want from you.’ It just contributed to the backlash we’re experiencing today.
“It’s too many behind-closed-doors handshakes,” Ford said, as the righteous fury of the those gathered for this meeting brewed as they recalled the housing and financial crash that began in 2007.
“What happened is just wicked,” said Laura Winfrey, Justina’s mother, both of whom are fighting a notice to evict them from their Austin home. Justina said that she’s been going to court for four years now. Last year, after one judge dismissed the bank’s eviction notice because the eviction process was improperly conducted, another motion was filed a week or two later, she says. This one was upheld — by a different judge.
“It’s like going down the rabbit hole,” Justina said, referring to the “twisted logic and upside-down moral universe” of the foreclosure process she’s been forced to grapple with since 2010. It was then that she and her mom learned that their family’s home was going through that process — one, she says, is part of a widespread home fraud scheme impacting many Austin and West Side homeowners.
The most egregious discovery she found was that of Mortgage Electronic Registration Systems (MERS), which, at its height before the recession, may have registered many home loans in the country.
The MERS shuffle
As Matt Taibbi of Rolling Stone described it more than three years ago:
“The idea behind MERS was to wipe away centuries of legal tradition that mandated the physical transfer of loan notes and ownership information. Whereas lenders once were required to physically register with County Clerk offices every time a mortgage loan was extended or re-sold, MERS provided an ‘electronic registry’ of mortgage notes where all such transfers were recorded [in a computer] instead of on paper.
“Instead of the individual banks or lenders registering with the counties each time a loan was sold or re-sold, MERS would handle the initial registration and then become the ‘nominal’ note-holder. Then, each time the note was passed on, MERS would record the transaction in its computer — but no matter who the actual owner of the note was, MERS would remain the legally registered assignee of the note.”
The problem is that in the MERS shuffle, the home’s real mortgage gets lost, even by banks that claim to own the home. If the entity that purports to own a home has no valid claim proving ownership, then that entity’s foreclosure claim is invalid as well.
“The reality is that it is very hard in Illinois to foreclose,” says realtor Wayne Beals. “If MERS has errors, they should be easy to prove up, because if the bank can’t produce the note the judge is going to throw out the foreclosures. The bank has to produce a signed note and if they can’t — and all they’re relying on is MERS data — that’s not going to go anywhere in court.”
But the Winfreys say that an individual homeowner’s case against MERS is not always so cut-and-dry.
Winfrey said that, after the Cook County Recorder of Deeds abruptly changed her property pin number several years ago, the office destroyed all of the original mortgage documentation relating to the property. Since all foreclosure cases become sealed once they’re closed, there is no legal precedence on which to rely or reference.
If defendants want stenographers in Chancery Court, many must come out of their own pockets, Justina said, since not all courts have stenographers, which can cost much as $250-per court date. Even getting a lawyer worth his or salt to represent her case has been an uphill struggle. The one she found bold enough to take her case charged a retainer of $7500.
“The only recourse that we have is to build a coalition, and each individual homeowner has to file a Quiet Title lawsuit,” Justina said at the meeting. “That means your title, right now, is screaming because you have so many people with their hands in the pot. In order to quiet it, you have to prove that you have superior right and interest to the property by filing it. But here’s the thing about Illinois attorneys — they don’t want to take the case, because if they don’t win it, they could get sanctioned.”
If the Winfreys have their way, this meeting in the third-floor, sanctuary apartment would be the start of a movement. And after all she’s been through, Laura Winfrey said she’s grown impatient with “incremental improvements.”
In addition to filing Quiet Title lawsuits, Justina told the group they also need to pressure lawmakers to pass more comprehensive legislation, such as a Homeowners Bill of Rights. Two bills before the General Assembly — Senate Bill 1728 and House Bill 3183 — would effectively strengthen homeowner protections against rampant abuse and fraud by banks.
“There was so much carnage from the foreclosure crisis that, by this point in history, the people who were trying to stop this stuff are exhausted,” said Beals, who conducts home buying seminars for property owners on the West Side. “They’re out of money and resources. The community organizations, the nonprofits that were helping defend people against this, are just, literally, mentally-exhausted from the process.”
Beals notes that, along with coalition-building, individual homeowners must educate themselves about the pitfalls of the market. If they don’t, Beals stressed, the bank won’t do the educating for them.
That’s a lesson Laura Winfrey, who handed out flyers and made calls publicizing this evening’s meeting, has taken to heart.
“What happened to me happened because of my ignorance,” she confessed. “I didn’t know. I trusted too many, thinking, ‘Oh, they won’t hurt me.’ That was during the whole period. They were loving every minute. Don’t sit back and think that [big banks] are here to help you.”
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Michael Romain is founder and
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