In fact, most of the time these duped homeowners think they were given a great deal.   As the article below points out some of the loan brokers and lenders target specific ethnic groups for the purpose lining their pockets at the direct expense of the borrower.

If you are struggling with your loan modification or can’t get a short sale over the finish line have the loan audited ASAP.

- The Bank Slayer

JUDGE ISSUES FINES FOR PREDATORY LENDING TARGETING GREELEY HISPANICS

“The whole Hispanic population can be likened to trained pigs coming to trough; you give them reason to come, and they’ll come and give you all their money.”

A Weld County judge on Thursday imposed civil damages and penalties totaling $629,203 against the defendants in a predatory lending practice scheme that targeted Hispanic homebuyers in Greeley.

The Colorado Civil Rights Commission alleged that the four and J.C. Distinguished Finance engaged in such egregious and deceptive lending practices that the Hispanic homebuyers were eventually forced into foreclosure.

The great majority of the new homeowners didn’t speak English and were given false information about the financing of their homes, according to the Civil Rights Division.

Strodtman and Juhl allegedly steered their Spanish-speaking customers to Charles Brandt and Jessica Feliciano of J.C. Distinguished Finance LLC to obtain mortgages based on fabricated applications.

A business card for JS Real Estate read in Spanish, “Good Credit, Bad Credit, No Social Security Number, Approved, 0 Down Payment.”

The Civil Rights Commission also alleged that Strodtman made discriminatory statements such as, “The whole Hispanic population can be likened to trained pigs coming to trough; you give them reason to come, and they’ll come and give you all their money.“

Among the allegations against the defendants was that they inflated the home prices, failed to explain or disclose the terms of the loans, targeted homebuyers with damaging loan products and induced them to buy with promises that were never kept.

Juhl, Brandt, Feliciano and J.C. Distinguished Finance were each ordered to pay a $25,000 civil penalty. Carmona was ordered to pay a $10,000 civil penalty.

Another $319,203 in damages was assessed against the defendants and $200,000 in non-economic compensatory damages was also ordered.

If you are someone you know is facing a foreclosure situation call our office today at 713-595-8200.

- The Bank Slayer

Houston foreclosures up 34.6% from ’09

Houston Business Journal – by Francisco Vara-Orta Austin Business Journal Staff Writer

Home foreclosures jumped overall in the first six months of 2010 from a year ago in the greater Houston area, but actually saw a slight decline in June, according to a new report from RealtyTrac Inc.

June statistics  – One in every 581 houses foreclosed or was in danger of foreclosing in June, a 2.4 percent decrease from the same month in 2009. However, the number of foreclosures in the Bayou City is up 14 percent from May.   Irvine, Calif.-based RealtyTrac, a private marketer of foreclosure properties, found that a total 3,843 Houston homes foreclosed, defaulted, or were scheduled for auction in June.

Overall Houston ranks in the middle among metro areas with the highest number of foreclosures in June, checking in at No. 102 of the 203 areas that RealtyTrac monitors.   In June in Texas, one in 788 homes statewide received a foreclosure filing compared to nationally where one in 411 houses received a filing. Texas continues to do better when it comes to avoiding foreclosures compared to other states, such as the top four in rates and in total homes foreclosed such as Nevada, Arizona, Florida, and California.

Nationwide, foreclosure filings were reported on 313,841 properties in June, a 3 percent decrease from the previous month and a 7 percent decrease from June 2009. June was the sixteenth straight month where the total number of properties with foreclosure filings exceeded 300,000.     Second quarter and mid-year — In the second quarter, about 9,611 Houston homes were foreclosed on or in danger of it, a 15 percent increase from the previous six months, but a 14.4 percent decrease from the first quarter of 2010. That means one out of every 232 homes was in or is in danger of foreclosure.

Foreclosure filings were reported on 895,521 U.S. properties during the second quarter, a decrease of nearly 4 percent from the previous quarter and an increase of less than 1 percent from the second quarter of 2009.    “The second quarter was a tale of two trends,” RealtyTrac CEO James J. Saccacio said. “The pace of properties entering foreclosure slowed as lenders pre-empted or delayed foreclosure proceedings on delinquent properties with more aggressive short sale and loan modification initiatives. Meanwhile the pace of properties completing the foreclosure process through bank repossession quickened as lenders cleared out a backlog of distressed inventory delayed by foreclosure prevention efforts in 2009.”

As far as mid-year statistics, nationwide, about 1,654,634 homes were foreclosed on or in danger of it in the first six months of 2010, a 5 percent decrease from the previous six months, but an 8 percent increase from the first six months of 2009. That means one out of every 78 homes was in or in danger of foreclosure.   In Texas, about 64,883 homes were foreclosed on or in danger of it in the first six months of 2010, a 4 percent increase from the previous six months, and a 32 percent increase from the first six months of 2009. That means one out of every 148 homes was in or is in danger of foreclosure.

In Houston, about 19,137 homes were foreclosed on or in danger of it in the first six months of 2010, a 7.3 percent increase from the previous six months, and a 34.6 percent increase from the first six months of 2009. That means one out of every 117 homes was in or in danger of foreclosure.   “The midyear numbers put us on pace to exceed 3 million properties with foreclosure filings by the end of the year, and more than 1 million bank repossessions,” Saccacio said.

“The roller coaster pattern of foreclosure activity over the past 12 months demonstrates that while the foreclosure problem is being managed on the surface, a massive number of distressed properties and underwater loans continues to sit just below the surface, threatening the fragile stability of the housing market.”

While the speed at which they have been approving short sales has improved, I believe in a large part this is due to their new standard policy of pumping out an approval that simply releases the lien on the home without forgiving the borrower the deficiency balance.   This can be deadly for the homeowner and the real estate agent who likely advised them to accept the short sale offer.

- The Bank Slayer

Thanks to Robert Doggett @ Texas RioGrande Legal Aid for the following post.

Bank of America N.A. and its wholly owned subsidiary, BAC Home Loans Servicing LP, have been sued by 15 homeowners and the Texas Housing Justice League for abusive servicing practices.  The Texas suit alleges:

This lawsuit complains … of a systematic home loan servicing scheme that includes hours of telephone runaround, misleading and inconsistent information, lost correspondence, verbal abuse, and extensive delay, all of which have documented costs not only in terms of money, but in health. The facts in this case reveal the harsh reality that underlies the loan servicer’s press statements about loan modifications and forbearance agreements following collapse of the U.S. housing market.

Harryman, et al., v. Bank of America N.A., and BAC Home Loans Servicing LP, US District Court, Southern District of Texas, Victoria Division, 6:10-cv-51, Original Complaint at 1 here.

It would be hard to imagine that Bank of America and BAC will fight the facts of the case; the question will likely be whether they can get away with it.  The servicer will likely claim that poor “customer service” is something that must be accepted like a slow waiter or a bad movie.  The difference is of course that homeowners are not merely customers that should expect to be mistreated and lied to — homeowners have a contract with the holder of their home loan and these servicers are the agents for the holder — and moreover, servicing a home loan is not in the realm of someone forgetting your fries or being tricked into seeing Gigli.

Many of the Plaintiffs were told that they were eligible for loan modifications or other workout assistance, only to spend months being shuffled through Defendant BAC’s “Home Retention,” “HOPE”, “Foreclosure,” “Bankruptcy” and “Collections” departments with no resolution. Others simply wanted to know that they had been reviewed accurately for eligibility in any available programs, that a denial of assistance was final, and that their arrearage had been correctly calculated. Instead of providing Plaintiffs with basic information about the servicing of their loans and providing timely screenings for workout assistance, however, Defendant BAC misrepresented material information to the Plaintiffs about their loans, and forced them into a scheme of operation so dysfunctional that the constant barrage of misinformation, misdirection, and deliberate inactivity amounted to abuse and harassment.

Plaintiffs describe feeling “harassed,” “like a yo-yo,” and “blocked at every turn.”  When Plaintiffs called Defendant BAC the information they received over the telephone often conflicted with written statements or prior telephone conversations. In many of the telephone calls Defendant BAC spun Plaintiffs in a labyrinth of transfers from one department to another and back again. Plaintiffs spent hundreds of hours on the telephone, explaining their stories to a different person each time they called; often they were transferred between departments, knowing they would never speak to the same person again, and wondering if the information being provided would be contradicted by the next person they spoke with. Often, it was.

Harryman, et al., v. Bank of America N.A., and BAC Home Loans Servicing LP, US District Court, Southern District of Texas, Victoria Division, 6:10-cv-51, Original Complaint at 5-6 here.

While servicers will likely complain about the heavy caseloads and large number of loans in default that require attention — one thing is certain, the foreclosure arm of these servicers and their contractors have managed to deal with the heavy caseloads quite well.  If servicers can foreclose on behalf of these lenders at a record pace, they can provide accurate, helpful, timely information to the other party to the contract — the homeowners.

The Texas suit does not merely seek monetary relief, it also seeks injunctive relief as well in an effort to actually encourage or force servicers to make real changes and eliminate these complaints:

Requests to speak with supervisors or managers were met with resistance. During the course of telephone calls to Defendant BAC, Plaintiffs often found themselves disconnected after waiting on hold to speak to a supervisor, or were told that no supervisors were available. Some Plaintiffs sought out face-to-face interviews by contacting Bank of America branch offices, but simply found themselves on speakerphones with the same unaccountable departments that had previously been providing them with misinformation by telephone. Written communications did not fare better. Plaintiffs’ written submissions were often lost or misplaced.  Plaintiffs were asked to sign the same documents three, four or even five times, and were asked to provide the same information repeatedly. Many of the Plaintiffs were assigned multiple “negotiators” who would not return telephone calls, or provide timely information to Plaintiffs.

Plaintiffs’ experiences are not isolated incidents, but instead reveal a pattern and practice by Defendant BAC of deliberately misinforming borrowers in default or at risk of default, and refusing to respond to Plaintiffs’ legitimate, written and oral requests for information.

Harryman, et al., v. Bank of America N.A., and BAC Home Loans Servicing LP, US District Court, Southern District of Texas, Victoria Division, 6:10-cv-51, Original Complaint at 5-6 here.

If servicers treated lenders the same way that they treat homeowners, their businesses would disappear.  Let’s hope this reform effort catches on, and servicers make changes without the necessity of litigation or a magician.

Don’t take a bad situation lying down and giving up.  Stand up for your rights and see if TBW monkeyed around with your mortgage.  Most borrowers don’t realize that:  YES – YOU DO HAVE RIGHTS to information held by the mortgage company.  USE THEM!!   Knowledge is power and if they have all the knowledge then you will lack the power to change your situation.  Get the modification or short sale you need today!

- The Bank Slayer

Former Taylor Bean & Whittaker chair Lee Farkas Charged with Securities Fraud

Ocala.com is reporting that Lee Farkas, 57, former chair of Taylor, Bean & Whittaker was arrested in Ocala, Florida on Tuesday and charged with securities fraud.  According to the article, he is being held without bail and the FBI is scheduled to pick him up from the Marion County, Florida jail where he was booked after his arrest.

The raid of TBW’s headquarters as well as the Orlando branch of Colonial Bank occurred in August of 2009, followed shortly by TBW being barred from servicing federal loans or issuing Ginnie Mae securities.  TBW’s demise was almost immediate.  Colonial Bank was shut down by its regulators nine days later, at the time it was the sixth largest bank failure in US history.

There has been a lot of speculation about the reasons for the law enforcement raids and the subsequent actions by FHA, Freddie, Ginnie and the regulators.  A number of questions were raised simply because of SIG TARP’s involvement in the federal investigations and raids.  Colonial Bancgroup, the holding company for Colonial Bank, was not initially approved to receive TARP funds.  In a Time article on November 13, 2008 which noted a 46% decline in Colonial’s stock and $40M third quarter loss, Michael Levine, a portfolio managaer at Oppenheimer Funds was quoted as saying ”If a bank has not received TARP funds, it means one of two things, either you are strong enough that you don’t need the funds, or, two, you are screwed.”

Colonial did apply for TARP funds. It was approved for $550M on the condition that it raise $300M in private capital. Shortly before the deadline to raise that capital, Colonial announced that it had reached an agreement with TBW and that TBW would provide the needed capital in exchange for 75% of Colonial’s common equity.  Unfortunately, that deal fell apart in July, shortly before the August law enforcement raids of both companies.

The documents charging Lee Farkas have not been unsealed and we have not been able to independently confirm the arrest.  The fact that he was arrested indicates that he was likely indicted, not charged by information (United States Attorneys generally charge a defendant by way of “Information” rather than “Indictment” when a plea agreement has been reached prior to the filing of charges.)  Either way, it is likely that the charging documents will clear up some of the mystery that surrounded the implosion of the not-so-little non-bank mortgage lender that believed it could.

While auditing files, we’ve seen a BPO (broker price opinion) charged to the same house 17 times in 20 days.  Give me a break!  Like the bank really sent an agent out to the house 17 times.  It is very clear when you audit a mortgage that many times the servicers are jacking the homeowner up with fees to line the bank’s pockets.

If Bank of America is your servicer you need to closely watch you account if you are struggling with your payments.

If you are a Countrywide customer prior to 2008 you need to have your mortgage audited immediately.

The FTC press release is below.

- The Bank Slayer

Countrywide Will Pay $108 Million for Overcharging Struggling Homeowners; Loan Servicer Inflated Fees, Mishandled Loans of Borrowers in Bankruptcy

Two Countrywide mortgage servicing companies will pay $108 million to settle Federal Trade Commission charges that they collected excessive fees from cash-strapped borrowers who were struggling to keep their homes. The $108 million represents one of the largest judgments imposed in an FTC case, and the largest mortgage servicing case. It will be used to reimburse overcharged homeowners whose loans were serviced by Countrywide before it was acquired by Bank of America in July 2008.

“Life is hard enough for homeowners who are having trouble paying their mortgage. To have a major loan servicer like Countrywide piling on illegal and excessive fees is indefensible,” said FTC Chairman Jon Leibowitz. “We’re very pleased that homeowners will be reimbursed as a result of our settlement.”

According to the complaint filed by the FTC, Countrywide’s loan-servicing operation deceived homeowners who were behind on their mortgage payments into paying inflated fees – fees that could add up to hundreds or even thousands of dollars. Many of the homeowners had taken out loans originated or funded by Countrywide’s lending arm, including subprime or “nontraditional” mortgages such as payment option adjustable rate mortgages, interest-only mortgages, and loans made with little or no income or asset documentation, the complaint states.

Mortgage servicers are responsible for the day-to-day management of homeowners’ mortgage loans, including collecting and crediting monthly loan payments. Homeowners cannot choose their mortgage servicer. In March 2008, before being acquired by Bank of America, Countrywide was ranked as the top mortgage servicer in the United States, with a balance of more than $1.4 trillion in its servicing portfolio.

When homeowners fell behind on their payments and were in default on their loans, Countrywide ordered property inspections, lawn mowing, and other services meant to protect the lender’s interest in the property, according to the FTC complaint. But rather than simply hire third-party vendors to perform the services, Countrywide created subsidiaries to hire the vendors. The subsidiaries marked up the price of the services charged by the vendors – often by 100% or more – and Countrywide then charged the homeowners the marked-up fees. The complaint alleges that the company’s strategy was to increase profits from default-related service fees in bad economic times. As a result, even as the mortgage market collapsed and more homeowners fell into delinquency, Countrywide earned substantial profits by funneling default-related services through subsidiaries that it created solely to generate revenue.

According to the FTC, under most mortgage contracts, homeowners must pay for necessary default-related services, but mortgage servicers may not mark up the cost to make a profit or charge homeowners for services that are not reasonable or appropriate to protect the mortgage holder’s interest in the property. Homeowners do not have any choice in who performs default-related services or the cost of those services, and they have no option to shop for those services.

In addition, in servicing loans for borrowers trying to save their homes in Chapter 13 bankruptcy proceedings, the complaint charges that Countrywide made false or unsupported claims to borrowers about amounts owed or the status of their loans. Countrywide also failed to tell borrowers in bankruptcy when new fees and escrow charges were being added to their loan accounts. The FTC alleges that after the bankruptcy case closed and borrowers no longer had bankruptcy court protection, Countrywide unfairly tried to collect those amounts, including in some cases via foreclosure.

Settlement Terms

The FTC’s complaint and settlement order name two mortgage servicers as defendants: Countrywide Home Loans, Inc. and BAC Home Loans Servicing LP, formerly doing business as Countrywide Home Loans Servicing LP. The settlement requires Countrywide to pay $108 million, which will be refunded to homeowners who Countrywide overcharged before July 2008.

In addition, the settlement order prohibits Countrywide from taking advantage of borrowers who have fallen behind on their payments. The defendants continue to service millions of mortgage loans, including tens of thousands of loans involving borrowers in bankruptcy and foreclosure. In the servicing of loans, the defendants are permanently barred from:

• Making false or unsubstantiated representations about loan accounts, such as amounts owed.
• Charging any fee for a service unless it is authorized by the loan instruments, by law, or by the consumer for a specific service requested by the consumer.
• Charging any fee for a default-related service unless it is a reasonable fee charged by a third party for work actually performed. If the service is provided by an affiliate of a defendant, the fee must be within limits set by state law, investor guidelines, and market rates. Defendants must obtain annual, independent market reviews of their affiliates’ fees to ensure that they are not excessive.

In addition, Countrywide must advise consumers if it intends to use affiliates for default-related services and, if so, provide a fee schedule of the amounts charged by the affiliates.

The settlement also requires Countrywide to make significant changes to its bankruptcy servicing practices. For example, Countrywide must send borrowers in Chapter 13 bankruptcy a monthly notice with information about what amounts the borrower owes – including any fees assessed during the prior month. The defendants also must implement a data integrity program to ensure the accuracy and completeness of the data they use to service loans in Chapter 13 bankruptcy.

This case was brought with the invaluable assistance of the United States Trustee Program, the component of the Department of Justice that oversees the administration of bankruptcy cases and private trustees. This action represents the FTC’s continuing work to help consumers who have been hurt by the economic downturn.

For more information about the case and the FTC’s refund program, see www.ftc.gov/countrywide.

The Commission vote to authorize staff to file the complaint and settlement was 5-0. The complaint and settlement were filed in the U.S. District Court for the Central District of California.

The Federal Trade Commission is a member of the interagency Financial Fraud Enforcement Task Force. For more information on the Task Force, visit www.stopfraud.gov.

NOTE: The Commission files a complaint when it has “reason to believe” that the law has been or is being violated, and it appears to the Commission that a proceeding is in the public interest. The complaint is not a finding or ruling that the defendants have actually violated the law. Stipulated court orders are for settlement purposes only and do not necessarily constitute an admission by the defendants of a law violation. Stipulated orders have the full force of law when signed by the judge.

The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, visit the FTC’s online Complaint Assistant or call 1-877-FTC-HELP (1-877-382-4357). The FTC enters complaints into Consumer Sentinel, a secure, online database available to more than 1,800 civil and criminal law enforcement agencies in the U.S. and abroad. The FTC’s Web site provides free information on a variety of consumer topics.

Think about it…if you could buy some guy’s mortgage loan, whom you don’t even know, say for 10 cents on the dollar, why would you want to offer him a deal to modify his loan or grant him a short sale where Realtors, title companies and home owner associations all get a cut.     Nope, you would simply foreclose and FLIP THE HOUSE for a quick profit and do it all over again.

Below’s content is taken from Neil Garfield’s post called Just Say No.  He highlights a NY Times article where homeowners have simply had a enough and what happens when people take matters into their own hands.

Read on friends.  It’s not making the nightly news but we’re winning.  One swing at a time.

- The Bank Slayer

Just Say No

The notion that nobody is going to approve of borrowers getting a free house is a myth. It isn’t up to anyone but the people who own those homes. If given the choice they would negotiate in good faith. Given no choice, they won’t pay.

Just Say NO. That is the battle cry of more and more people as they survey their situation. They were snookered by a false appraisal and “borrowed” money on “collateral” that wasn’t worth anywhere near what was told to them and confirmed by their “lender.” Steered into loopy loans by people whose “commission” grew with each added element of stupidity, they ended up with payments that they either can’t afford or simply refuse to pay.

We’ve written about strategic defaults before. Now it is the obvious choice for many homeowners who find that they can keep their homes months or years without making ANY payments. The servicers, aggregators and investment banks who are running this show had their own reasons for not modifying the loans down to true fair market value on reasonable market terms — as long  as the loan is non-performing they make more money. Sounds counter-intuitive but nonetheless true.

Now enters the NY Times with a front page article that says what I have been saying for years — if the financial services industry doesn’t get their act together and do something smart like addressing REALITY, the people are going to take matters into their own hands. Their greed may land them in jail because when the smoke clears and thousands of these people end up with clear title to their property the investors are going to realize that it is not the servicer they should be suing so much as the investment banker who created this show.

In my view the only way for the investor to improve their outcome is by settling directly with borrowers. They will see far more money from homeowners who are motivated to keep their homes than they will be relying on an industry that is consumed with greed and gaming the system for every penny they can get.

If the investors as creditors don’t get engaged in this process their losses are going to mount. The only way they can plug the leak is by entering this three-ring circus and bring it to a halt. The notion that nobody is going to approve of borrowers getting a free house is a myth. It isn’t up to anyone but the people who own those homes. If given the choice they would negotiate in good faith. Given no choice, they won’t pay.

That litigation is starting to grow. In discovery the investor is going to find out that the investment banker made a profit, called a yield spread premium, the moment they bought a mortgage backed security which started a transaction that ended with a borrower signing a mortgage or deed of trust. The investors had no idea they were the start of the scheme. They presumed that the loans had been made and that someone in the line of securitization had been at risk when they approved the underwriting of the loan.

When the truth emerges that the investment banker was pocketing as much as 40% of the investments in mortgage backed securities, using the investor’s money to fund mortgages whose nominal value was 60% of the investment, and whose actual value was close to zero both for reasons of false appraisal, false ratings, etc., they may have something to say about it.

ST. PETERSBURG, Fla. — For Alex Pemberton and Susan Reboyras, foreclosure is becoming a way of life — something they did not want but are in no hurry to get out of.

Foreclosure has allowed them to stabilize the family business. Go to Outback occasionally for a steak. Take their gas-guzzling airboat out for the weekend. Visit the Hard Rock Casino.

“Instead of the house dragging us down, it’s become a life raft,” said Mr. Pemberton, who stopped paying the mortgage on their house here last summer. “It’s really been a blessing.”

A growing number of the people whose homes are in foreclosure are refusing to slink away in shame. They are fashioning a sort of homemade mortgage modification, one that brings their payments all the way down to zero. They use the money they save to get back on their feet or just get by.

This type of modification does not beg for a lender’s permission but is delivered as an ultimatum: Force me out if you can. Any moral qualms are overshadowed by a conviction that the banks created the crisis by snookering homeowners with loans that got them in over their heads.

“I tried to explain my situation to the lender, but they wouldn’t help,” said Mr. Pemberton’s mother, Wendy Pemberton, herself in foreclosure on a small house a few blocks away from her son’s. She stopped paying her mortgage two years ago after a bout with lung cancer. “They’re all crooks.”

Foreclosure procedures have been initiated against 1.7 million of the nation’s households. The pace of resolving these problem loans is slow and getting slower because of legal challenges, foreclosure moratoriums, government pressure to offer modifications and the inability of the lenders to cope with so many souring mortgages.

The average borrower in foreclosure has been delinquent for 438 days before actually being evicted, up from 251 days in January 2008, according to LPS Applied Analytics.

While there are no firm figures on how many households are following the Pemberton-Reboyras path of passive resistance, real estate agents and other experts say the number of overextended borrowers taking the “free rent” approach is on the rise.

There is no question, though, that for some borrowers in default, foreclosure is only a theoretical threat for a long time.

More than 650,000 households had not paid in 18 months, LPS calculated earlier this year. With 19 percent of those homes, the lender had not even begun to take action to repossess the property — double the rate of a year earlier.

In some states, including California and Texas, lenders can pursue foreclosures outside of the courts. With the lender in control, the pace can be brisk. But in Florida, New York and 19 other states, judicial foreclosure is the rule, which slows the process substantially.

In Pinellas and Pasco counties, which include St. Petersburg and the suburbs to the north, there are 34,000 open foreclosure cases, said J. Thomas McGrady, chief judge of the Pinellas-Pasco Circuit. Ten years ago, the average was about 4,000. “The volume is killing us,” Judge McGrady said.

Mr. Pemberton and Ms. Reboyras decided to stop paying because their business, which restores attics that have been invaded by pests, was on the verge of failing. Scrambling to get by, their credit already shot, they had little to lose.

“We could pay the mortgage company way more than the house is worth and starve to death,” said Mr. Pemberton, 43. “Or we could pay ourselves so our business could sustain us and people who work for us over a long period of time. It may sound very horrible, but it comes down to a self-preservation thing.”

They used the $1,837 a month that they were not paying their lender to publicize A Plus Restorations, first with print ads, then local television. Word apparently got around, because the business is recovering.

The couple owe $280,000 on the house, where they live with Ms. Reboyras’s two daughters, their two dogs and a very round pet raccoon named Roxanne. The house is worth less than half that amount — which they say would be their starting point in future negotiations with their lender.

“If they took the house from us, that’s all they would end up getting for it anyway,” said Ms. Reboyras, 46.

One reason the house is worth so much less than the debt is because of the real estate crash. But the couple also refinanced at the height of the market, taking out cash to buy a truck they used as a contest prize for their hired animal trappers.

It was a stupid move by their lender, according to Mr. Pemberton. “They went outside their own guidelines on debt to income,” he said. “And when they did, they put themselves in jeopardy.”

His mother, Wendy Pemberton, who has been cutting hair at the same barber shop for 30 years, has been in default since spring 2008. Mrs. Pemberton, 68, refinanced several times during the boom but says she benefited only once, when she got enough money for a new roof. The other times, she said, unscrupulous salesmen promised her lower rates but simply charged her high fees.

Even without the burden of paying $938 a month for her decaying house, Mrs. Pemberton is having a tough time. Most of her customers are senior citizens who pay only $8 for a cut, and they are spacing out their visits.

“The longer I’m in foreclosure, the better,” she said.

In Florida, the average property spends 518 days in foreclosure, second only to New York’s 561 days. Defense attorneys stress they can keep this number high.

Both generations of Pembertons have hired a local lawyer, Mark P. Stopa. He sends out letters — 1,700 in a recent week — to Floridians who have had a foreclosure suit filed against them by a lender.

Even if you have “no defenses,” the form letter says, “you may be able to keep living in your home for weeks, months or even years without paying your mortgage.”

About 10 new clients a week sign up, according to Mr. Stopa, who says he now has 350 clients in foreclosure, each of whom pays $1,500 a year for a maximum of six hours of attorney time. “I just do as much as needs to be done to force the bank to prove its case,” Mr. Stopa said.

Many mortgages were sold by the original lender, a circumstance that homeowners’ lawyers try to exploit by asking them to prove they own the loan. In Mrs. Pemberton’s case, Mr. Stopa filed a motion to dismiss on March 17, 2009, and the case has not moved since then. He filed a similar motion in her son’s case last December.

From the lenders’ standpoint, people who stay in their homes without paying the mortgage or actively trying to work out some other solution, like selling it, are “milking the process,” said Kyle Lundstedt, managing director of Lender Processing Service’s analytics group. LPS provides technology, services and data to the mortgage industry.

These “free riders” are “the unintended and unfortunate consequence” of lenders struggling to work out a solution, Mr. Lundstedt said. “These people are playing a dangerous game. There are processes in many states to go after folks who have substantial assets postforeclosure.”

But for borrowers like Jim Tsiogas, the benefits of not paying now outweigh any worries about the future.

“I stopped paying in August 2008,” said Mr. Tsiogas, who is in foreclosure on his house and two rental properties. “I told the lady at the bank, ‘I can’t afford $2,500. I can only afford $1,300.’ ”

Mr. Tsiogas, who lives on the coast south of St. Petersburg, blames his lenders for being unwilling to help when the crash began and his properties needed shoring up.

Their attitude seems to have changed since he went into foreclosure. Now their letters say things like “we’re willing to work with you.” But Mr. Tsiogas feels little urge to respond.

“I need another year,” he said, “and I’m going to be pretty comfortable.”

Straight from the Huffington Post.

- The Bank Slayer

Huge raucous crowds converged outside bank employees’ houses on Sunday afternoon to demand banks stop lobbying against Wall Street reform.

“Bank of America: bad for America!” shouted community leaders outside the house of Bank of America general counsel Gregory Baer.

The Chicago-based grassroots organization National People’s Action, in coordination with the SEIU, bused more than 700 workers from 20 states to Baer’s neighborhood, one of the wealthiest corners of Washington. The action kicks off several days of protests targeting K Street for lobbyists’ role in financial reform.

Baer himself apparently tried to blend in with the crowd until a neighbor outed him. The mob booed loudly as he walked into his house. “I don’t have time for you,” he said, according to Trenda Kennedy of Springfield, Ill. who used a bullhorn to tell the crowd about her trouble getting a mortgage modification from Baer’s bank.

Kennedy told HuffPost she’d been making reduced monthly payments thanks to a trial modification via the Home Affordable Modification Program. She said that when the bank turned her down for a permanent mod, she was told she still owed all the money she’d been paying during the trial. She said she’s been notified of several sheriff’s sale dates but has somehow managed to keep her home.

“Every time I’m inches away from losing my house, by some miracle it’s been pushed off,” said Kennedy, who is a member of Illinois People’s Action.

Passersby and dogwalkers smiled at the sight of people gathered all over Baer’s lawn and blocking the road. Baer’s neighbor from across the street won little sympathy when he angrily yelled at protesters for waking up his two-year-old daughter. Kennedy was one of several people who used a bullhorn to tell personal bank horror stories.

Baer, formerly a senior official at the Treasury department, is a lawyer for the bank’s regulator and public policy legal group. Bank of America declined to comment.

“Bank of America came to the homes of everyday Americans when you spread predatory loans in neighborhoods across, the country, when you financed payday-lending storefronts, when your reckless behavior sent the economy to the brink of disaster, and when your bank-owned properties littered neighborhoods from coast to coast,” said a letter the group asked Baer to deliver to CEO Brian Moynihan. “You’ve created a historic mess and have been unreceptive to very polite, very formal and very consistent requests to fix the problems you helped create.”

The group also protested outside the house of Peter Scher, a lobbyist for JPMorgan Chase. Nobody answered the door.