Arturo de los Santos takes part in a demonstration in front of Freddie Mac's Los Angeles offices on Feb. 2, demanding the mortgage company halt efforts to forcibly remove him and his family from their single-story house in Riverside, Calif..
Arturo de los Santos lost his home to foreclosure more than a year ago and was evicted. But because he felt he was treated unfairly, he moved back into his home of 10 years in an effort to force the lender, Freddie Mac, to back down.
"I’m just a regular guy who gets up each day, takes the kids to school and goes to work," said de los Santos, a long-time aerospace factory supervisor who served five years in the Marine Corps. Now he is hunkered down in the modest three-bedroom house in Riverside, Calif., surrounded by an encampment of Occupy Riverside protesters and community activists. "We’ve done everything the way we were supposed to. We’re not going to just sit back and let Freddie Mac steal our home."
A new eviction order aimed at forcing de los Santos, a 46, and his family out of the house took effect Tuesday, meaning that sheriff's deputies could arrive at any time. Arturo de los Santos also has been served a court summons threatening him with arrest if he doesn’t leave his house.
De los Santos’ story is similar to thousands of other American homeowners who claim that banks mishandled mortgage modifications.
When the economic crisis hit in 2008, the factory where he worked cut his hours, so de los Santos pursued a modification based on his lower income with JP Morgan Chase, servicer of the loan.
De los Santos told NBC Los Angeles that in 2009, the bank initially lowered his payment in a modification but then stopped taking his money.
Before the house foreclosure process was complete, de los Santos’ hours and income returned to pre-crash levels, but he says that JP Morgan Chase and loan holder Freddie Mac rejected his efforts to bring the loan up to date. Instead, his home was foreclosed on and he and his family were evicted.
Gary Kishner, a spokesman for JP Morgan Chase disputes de los Santos’ account, saying he applied multiple times for loan modifications but did not qualify under Freddie Mac’s requirements for participation. The foreclosure went through in November 2010, he said, and ownership reverted to Freddie Mac.
"The loan is no longer in our portfolio," he said. "It’s always been their decision."
Freddie Mac sent msnbc.com a statement on the case by email.
"We have no choice but to re-evict since no payment has been received on his mortgage for two and a half years, the foreclosure process was completed in November 2010 and the house was lawfully vacated and secured in July 2011. The only way to recover the losses taxpayers have taken on the unpaid mortgage is to re-secure and sell the house to a new buyer," according to the statement sent by Doug Duvall, senior director of public relations and corporate marketing at Freddie Mac headquarters in Virginia.
But de los Santos said he has been unable to get Freddie Mac to discuss his loan, a common refrain from homeowners trying to avoid foreclosure.
The home sat empty for about six months before de los Santos decided to take bold action. He and his family moved back into the home on Dec. 6. Activists from the Occupy movement and the Alliance of Californians for Community Empowerment launched their "occupation" of the property to bolster his bid to renegotiate on Feb. 2. Since then, said Peter Kuhns, a spokesman for ACCE, there have been 10 to 15 activists present at the house around the clock, and often more.
On Feb. 8, de los Santos and some 250 supporters staged a protest in the lobby of the 48-story office tower in downtown Los Angeles that houses Freddie Mac. They set up a "negotiating table" and sent a letter to the 44th floor seeking a Freddie Mac manager to explain his rejection for modification.
He and one other person were arrested and charged with trespassing.
A few homeowners who, like de los Santos, have undertaken public "occupation" of their former properties have succeeded in getting a new deal. In October, msnbc.com covered the case of Rose Gudiel, another resident of the Los Angeles area, whose public protests with numerous supporters apparently played a role in forcing Fannie Mae to cancel her eviction and agree to an eleventh-hour loan modification.
But while the "occupation" approach may meet with occasional success, it’s a desperate measure that most lawyers do not recommend.
"It’s trespassing, really, if there has been an eviction order," said Noah Zinner, staff attorney with Housing and Economic Rights Advocates. "It’s problematic because to the extent it involves trespass it can get the people in trouble."
De los Santos is one of the millions of homeowners who will not be helped by the recent $25 billion settlement with four major banks over allegations of improper foreclosures.
The settlement, which includes all but one state, will help lower the principal for about 1 million homeowners who are underwater and behind in their house payments. Another 750,000 people whose properties are worth less than they owe the bank will be able to refinance at a lower interest rate if they up to date on payments.
But loans backed by Fannie Mae and Freddie Mac are not part of the settlement.
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