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Tuesday, March 04, 2008

GM Watch: How Not To Tell A Story

by Tanta on 3/04/2008 09:30:00 AM

She's at it again.

Now, listen: this post isn't about defending actual incidents of fee-gouging. It isn't clear to me that the article in question has its hands on a case of actual fee-gouging. This post is about the idea that while people can write stuff for the NYT that makes no sense and get it published, the rest of us don't have to buy it.

It's a story that makes a claim:

Every home foreclosure is different, of course. But the Wellmans’ case shows the uphill battle facing many troubled borrowers who believe that they are losing their homes for questionable reasons, like onerous fees.
At minimum, I would expect a story about the reason for a foreclosure being onerous fees. I would also expect a story about how hard it is for borrowers to get a day in court ("an uphill battle").

What we got is a jumbled, fragmented narrative, told out of order, which is fashionable in the newspapers these days. I tend to suspect that this is because told in order, with full details, the story doesn't back up the headline. But I am cynical. Perhaps the real reason is that everyone else likes Faulkneresque conventions of narrative dislocation and evocative allusion rather than declarative sentences and Aristotelian unity. Stranger claims have been made before.

Whatever. To aid us old farts, I tried to put together all the actual facts reported in chronological order. This is what I got:

Our borrower, Wellman, built the house himself. He started in 1990 and finished in 1992.

In 1996 Wellman lost his job and got behind on "the mortgage." I don't know when the mortgage was made. I don't know who made it. Between 1996 and today, at some point, the Wellmans have filed BK five times. Have they ever completed one? Beats me.

In 2002, Nat City started foreclosure against the Wellmans. Apparently there was a problem with the assignment of mortgage having been filed subsequent to the FC filing. The judge seems to have slapped Nat City around a little, but did not dismiss the FC filing.

Apparently it got straightened out who owns the loan, because in 2003 the Wellmans signed a "forbearance agreement" with Nat City, the terms of which are undisclosed.

In 2004, Wellman asked a local accountant to look over his loan records, and the accountant said Nat City was off by $38,612. Wellman stopped making payments and got a lawyer.

It went to court, and in 2006 the accountant testified that the charges were improper. Nat City apparently testified that the charges were proper. The judge "found that the Wellmans were bound by the agreement they signed in 2003." It isn't spelled out what that means; I can only assume it means that agreement signed stipulated that the Wellmans would pay these charges that they subsequently objected to. I suspect it also means that the folderol about who really owns the note is no longer an issue, since signing an agreement to repay Nat City would mean the borrowers acknowledged that they owe Nat City. But we don't get that spelled out.

The thing apparently went to an appellate court, who apparently also found in favor of Nat City.

As of today, it appears that Mrs. Wellman has a job and Mr. Wellman is a self-employed inventor.

As of today, Gretchen Morgenson is still worried about the fact that a person testified to something in 2006, and the trial court didn't buy it. I'm wondering how often that happens.

So, anyway. The Wellmans have a history of financial distress going back for more than ten years. They got an accountant to work for them, and they have had a lawyer working for them for free for three years. They got a day in trial court and a day in appellate court. It appears that they have not made any mortgage payments--even regular payments, ignoring those contested fees--since 2004.

What is the obvious conclusion to draw?

Okay, now you can read the appellate decision.

A note to anyone in trouble with a mortgage: if you are asked to sign something, read it. If it stipulates that you have been represented by an attorney, don't sign it unless you are really represented by an attorney. If it has a dollar amount on it you are agreeing to repay, demand an itemization before you sign, not afterwards. If you really aren't sure that the other party to the agreement owns your loan, don't sign it. If it says that foreclosure will commence if you stop paying, it means it.

Best possible thing you can do: see a lawyer.

Worst possible thing you can do: read the New York Times.