Mandelman Responds to SF Chronicle Article: Fighting Banks and Winning – How Homeowners Did it

The article that follows below appeared in the San Francisco Chronicle yesterday.  (Hat tip to reader Michael Nazerinia.)  Obviously, the headline caught my eye, so I dove right in… only to find myself annoyed to no end at the end.  I tried to walk away and just let it go, but it didn’t take, so I responded to its author, Chronicle staff reporter, Carolyn Said, and I tried my best to be constructive and polite, neither one of which are particular strengths of mine, I realize.  Still… well, why don’t you be the judge.

Fighting the bank and winning: How these homeowners did it


Wednesday, May 11, 2011

Stories of homeowners who feel mistreated by their banks are commonplace these days. Hundreds of thousands of people are underwater and behind on their mortgages. As they seek loan modifications or other solutions, they tell of hours on hold, never speaking to the same person twice, reams of lost paperwork and rejections for reasons they don’t understand.

Some homeowners actually do get workable solutions, most commonly loan modifications to reduce their payments. Some outlier cases get even more unusual outcomes. Whether it’s getting a foreclosure rescinded or reducing the amount owed on a second loan, the odysseys of people who successfully negotiated with their banks provide tips that may help others in similar situations.

Refinance goes awry

All that Brad and Joan Zetterlund wanted was to refinance the mortgage on the home they had owned for 16 years. Instead, they ended up having their Pleasanton four-bedroom Colonial sold in a foreclosure auction at the courthouse steps, even though they had plenty of equity and the means to make their monthly payments.

After months of fighting and pleading with their bank, the couple were able to have the foreclosure rescinded earlier this year.

A couple of years ago they owed $400,000 on a home then worth $700,000. They applied for a refinance of their adjustable mortgage to their lender, Countrywide. The application moved slowly, and then Countrywide was sold to Bank of America. BofA evidently turned their refi application into a loan modification request early last year. Not even sure what a loan mod was, they hired an attorney.

Brad Zetterlund said bank representatives told him and his attorney several times that the bank would not accept payments because they were in loan mod status, although a loan mod agreement never happened. Since they weren’t making payments, they were sent notices that they were delinquent and facing foreclosure.

Home auctioned

The couple made hundreds of phone calls and faxes, trying to get a solution. On Aug. 16, their home was auctioned in a foreclosure sale to an investor for $505,000.

The bank wrote out a check to the Zetterlunds for $40,000 – what it said remained of their equity after subtracting for missed payments and late fees. They never cashed the check because they wanted to get their home back.

Brad Zetterlund, a stay-at-home dad, worked full time on trying to get the house back, spending hours a day on the phone. He sent countless faxes of financial paperwork, saving all fax receipts. He contacted about 18 elected officials, both local and national. Some forwarded his case to bank regulators. Through work connections, Joan Zetterlund got the CEO of a Fortune 500 company to contact the bank.

“We had to leverage every possibility, every person out there that may be able to help us,” he said. “I ate, drank, slept and lived fighting with the bank.”

In the fall, their case was assigned to a bank representative who appeared sympathetic and started pushing their case internally. The tide started to turn with an agreement to rescind the foreclosure. Since outside investors were involved, the bank had to negotiate with them.

Finally in January, the bank bought the loan back from the investors, restoring the Zetterlunds’ original status as mortgage holders.

Brad Zetterlund is now counseling two families from his church who are struggling to keep their homes.

“This was David versus Goliath – and David won,” he said. “But this almost destroyed us.”

In a statement, Bank of America said: “Based on the particular facts and circumstances of this case, we believe that the rescission was an appropriate resolution. We understand the difficulties experienced by the Zetterlunds and we are happy that we were able to reach a resolution that addressed their concerns.”

Foreclosure rescissions are rare, and rarer still when a third party purchased the home, according to Sean O’Toole, founder and CEO of “It does happen but not too often,” he said. “Occasionally you get a connected homeowner or one who makes enough noise that the trustee decides to rescind the sale. Every once in a while there might be a serious error that the lender made. A material mistake in the foreclosure notice (such as the wrong address) could be an issue.”

Foreclosure auctions that happen on a legal holiday – such as California’s Admission Day – can successfully be challenged by homeowners, he said.

Generally a rescission rolls back the clock to before the notice of trustee sale, he said. So if homeowners were behind on payments, they would have to get a loan mod or get current to forestall the bank going ahead and posting a new notice of trustee sale and proceeding with a foreclosure.

Short sale blocked

A San Ramon couple’s home had fallen in value to about $450,000, down from the $735,000 they paid in 2005. They wanted to sell it in a short sale – for less than they owed on their mortgage – but their second loan of $70,000 was in the way. The second loan holder insisted they sign a promissory note for the full amount due or face possible litigation.

The couple, who asked not to be named because of fear of retribution from their lender, owed this lender another $25,000 on a credit card, for a total of $95,000. After negotiating, the bank agreed to settle both debts for $20,000, writing off almost four-fifths of the balance.

In negotiating, the couple tried to reach someone with authority to speak for both the mortgage and credit departments.

Finding right person

Finding such a person took a lot of persistence and numerous phone calls to different departments. They then told that person they were prepared to file bankruptcy, in which case the bank would have to write off the whole debt. The bank rep instead offered them a deal.

They hope to now proceed with a short sale and have a prospective buyer lined up.

“I feel self-satisfied if not exactly proud … but we have been royally shafted and I’ve been carrying a lot of stress over the past 30 months trying to save our home,” the man wrote in an e-mail.

Dan Mulligan, a partner in the San Francisco law firm of Jenkins Mulligan Gabriel, said he often advises clients on how to negotiate down their second home loan, suggesting they seek to buy it back at between 6 and 10 cents on the dollar – slightly more than the 3 to 5 percent of face value the banks could get in the secondary market.

“I tell them to set aside an hour a day for about 14 straight days to make calls to their lender and don’t take no for an answer,” he said.

“Most people I’ve told to try it have been successful. For example, one (homeowner) with the first three calls he made, the guys (at the bank) just laughed at him and said ‘No way,’ but the fourth guy said, ‘Oh yeah, I’ll fax you the form.’ It’s just who you get that day.”

Tips for working with banks

— Keep detailed records, including copies of every e-mail and fax you send. Send faxes to a third party as well for verification.

— Buy a telephone recording device and inform bank reps at the beginning of every call that you will record it.

— Be prepared to devote consistent time, at least an hour a day over a few weeks, to making phone calls and handling paperwork.

— If at first you don’t succeed, keep trying. Ask to speak to supervisors. Keep calling back. Call the offices of top bank executives.

E-mail Carolyn Said at


What follows is my response…

Dear Carolyn…

I write a widely read blog, Mandelman Matters, that covers the financial and foreclosure crises.  Over the last two and a half years I’ve written hundreds of fairly in-depth articles on the subject, including numerous pieces describing the plight of homeowners fighting the banks.

First of all, I wanted to tell you that if you tell the bank you’re recording the call, chances are excellent that the next sound you hear will be a dial tone, but that’s not why I’m writing this response.

As I was reading your article it occurred to me how very strange our country has become. You wrote about the first couple going through hell after their servicer lied and stole their home. That is what happened in the case of couple number one, is it not?

Yet, it felt to me as if you could have been writing about a garden party in the Springtime. Has that thought occurred to you?

I mean, the couple would have received much better treatment were they dealing with organized crime. They wanted to re-finance, were forced into modifying, told not to make payments, and then whoosh… the bank just up and sold the home at trustee sale without so much as an “Ooops, sorry about that. Maybe we should have let you make a few payments after all.”   I think that’s pretty much lying and stealing a home, wouldn’t you agree?

And then, even after such egregious behavior on the part of the bank, these people still had to go through months of hell trying to get back what never should have been sold in the first place.  Thank goodness they knew a Fortune 500 executive, and how to reach dozens of elected representatives, to say nothing of the luxury of having a stay-at-home dad in the family, but to my way of thinking… and throughout my lifetime… if a bank made such an error… I’d expect to make a couple of calls and find them more than ready to bend over backwards to correct their unfortunate mistake.

Still, in a phrase, with every resource they had, and everything they did… they barely made it back home.

And what did the bank have to say about all that… basically, nothing. And shockingly, neither did you. Their experience was treated in your article as if you were describing how they lost and then found luggage while on a trip to Europe.

What happened to this couple must have been horrific on a scale I’m not sure you can comprehend. For weeks and perhaps months they lived in fear every day that someone… perhaps the Sheriff… would be at their door telling them it was time to get out. They undoubtedly spent many sleepless nights lost in stressful thoughts of what would happen next, and I’m sure cried out of feelings of loss, frustration and undeserved shame. Some of their friends and family members viewed them differently upon learning of their situation… many others they never told of what was happening.

And if they had children you can multiply those feelings by thousands.

Still, the bank treated the whole thing as if it wasn’t the bank’s fault in the least. As if the couple’s experience was par for the course in America today, as if it was plainly representative of what we all should expect from our banks.

That bar is set pretty low, don’t you think? Like, as long as your bank didn’t throw you out in the street or tell you to go f#@k yourself, you’re pretty much ahead of the game.  Can you think of any other business or government entity known for treating customers in such a way that would even be considered close to how the bank treated this couple?  A lot of people used to joke about the DMV or Post Office, but either of those entities is The Four Seasons compared to the bank in this example, wouldn’t you say?

But what about all of the thousands, no tens of thousands… or even hundreds of thousands of people who can’t come up with a Fortune 500 executive ready to lob a call into their bank, or the one’s that are short on stay-at-home dads at the moment. How about the one’s that don’t know how to get the attention of half the state legislature.

What about the single moms who work three jobs. The construction worker who never really picked up the whole computer thing. The senior citizens for whom English was a second language. What would have happened to any of them were they to replace the couple in your story?

I think you know what would have happened, or at least you should because it’s happening all around you every single day. I know, you don’t see it or even hear much about it, but that’s only because the victims have no voice… no one to speak for them… and they’re too ashamed to speak out for themselves. They are trapped in a sort of prison this country has constructed for them out of ignorance, misinformation and the total absence of compassion for one’s fellow man.

Oh, and that bank you’re writing about, Bank of America… yeah, well I’m sure they’re very important to your newspaper, the San Francisco Chronicle. I imagine they spend a pretty penny advertising in your paper each year. So, I suppose you know from where your journalistic bread gets buttered, right Carolyn? Better not to say anything too critical about the bank that owns you, is that about right?  It seems like it is.

Because that bank, Bank of America, is long since bankrupt, are you aware of that? They’ve been a tax-payer supported ghost bank since 2008. In fact, we had to pump a grand total of $210.4 billion into BofA, including cash and guarantees, and as of October 2010, they’ve only repaid $19.7 billion. Only Citigroup paints a worse picture, Carolyn. Look it up here, if you’d like.

And do you know how many lawsuits have already been filed against BofA, class action and otherwise. Well, I just don’t think they be counted by any one person at this point, but let’s just say hundreds and leave it at that… because it’s certainly at least hundreds.

States like Arizona and Nevada are suing BofA for loan modification fraud. Investors are suing BofA for securities fraud. The government is going after them, and a whole host of class actions on behalf of consumers are as well. They may buy some serious number of full page ads in the S.F. Chronicle, but you and I and everyone we know are the one’s paying for those ads.  Bank of America doesn’t deserve to be treated with any deference in light of what they did here, so why act as if their actions were any different from any other uncaring and abusive corporate slug?

But it seems that we live in a very different country than the one I remember growing up in. I’m about to turn 50 years old later this month and I can remember a country where if a newspaper like yours ran a story like yours the bank involved would have been back pedaling hard as the sting of the reporter’s indignation was felt rising off the page. Back then that bank wouldn’t even think of not apologizing profusely for their inexcusable and abysmal treatment of the homeowners in question.

And… back then the reporter could not have closed without warning other homeowners about what is possible, and directing anyone who found themselves in an unprovoked war with their bank over their home to contact the paper… so the media could shine a light on the terrible  wrong being committed in the hopes of seeing it stop as a result.

Instead, this sort of behavior by a bank is treated as being almost de rigueur, the norm, no big deal. And be nice, because they’re a major advertiser, don’t you know.

Why did you become a reporter, Carolyn? Because if it was to write about events such as these in the style and tone of your article, then I’d suggest you consider looking for a copywriting gig at an ad agency. You’ll be writing brochures for fat cat clients, which is just about like you did in your article, but you’d make twice the dough, and maybe more.

Consider the following: “The Founding Fathers gave the free press the protection it must have to bare the secrets of government and inform the people.”  (Supreme Court Justice Hugo Black)

I’m sorry if you felt that I’ve been too harsh, in truth, I’ve tried to restrain my true feelings to great degree, but what Justice Black says there conveys unto you awesome power and with that power is conveyed an awesome responsibility to the people, Carolyn… not to your paper’s advertisers.  And to see you squandering that power at a time when the couple in your story along with countless others, need more from you… a lot more… is at least depressing… and at most infuriating.

You had an opportunity to validate and thereby provide comfort to the victims here, and chastise or at least hint at disdain for the oppressor… and with those options presented, you chose to do neither.  Didn’t you feel anything as you listened to them tell you their story and then sat down to write it?  Because if you did, no one would ever know what you felt, or if you felt anything at all, and considering the horrific nature of the subject matter, the absence of any emotion feels cold, distant and anything but genuine.

And then you close with “tips on what to do if this happens to you?”  As if the topic is on par with losing your wallet while on vacation?  What happened to the couple in your story should NEVER be allowed to happen to anyone in this country… EVER!  And should you or anyone else ever find it happening to another, you should do everything in your power to stand with that person in opposition to what can only be described a form of corporate terrorism.

Bank of America put the couple in your story through HELL ON EARTH because they simply didn’t care enough to do otherwise, because when they do whatever they do, they don’t find hundreds or thousands of voices rising as one and demanding they fix what they’ve broken immediately or face consequences.  Because they CAN fix it immediately, you do realize that, right?  Do you think the same thing would  happen to a senator, a movie star, a Fortune 500 executive?  Clearly it would not.

Maybe next time the Chronicle should consider writing about the plight of a homeowner being raped by a bank while the crime is still in progress… and fulfill the promise of the American free press… instead of just penning an passionless epilogue that only proves to others how little our society cares about their plight, and that those in the media only care about their own bottom-line.

Mandelman out.


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