Foreclosed Renters Left Homeless In Shadow Of Disneyland

Posted by Big Rat on Campus on Aug 28, 2013 in Rat News | Subscribe

ANAHEIM, Calif. — In a hotel room not far from Disneyland, Renee Genel slumps on a couch, her family’s meager possessions scattered nearby in torn plastic shopping bags.

Unlike most of the guests here, Genel is not a tourist. This room, until noon tomorrow, is home.

More than three weeks ago, on Aug. 1, Bank of America evicted Genel, her two children, her toddler niece and her boyfriend Christopher Mogelberg from a condominium they rented. Since then, the family has lived a nomadic life, shuffling from hotel to hotel, staying in whatever cheap room they can secure using a discount travel website.

This evening they got a good rate at a Hilton and splurged. The room is cleaner, and larger, than their usual accommodations.

Mogelberg, 38, spends hours each day hunched over an old laptop, firing off increasingly desperate messages to bank officials, demanding thousands of dollars in compensation for harm he says his family suffered.

A big man with black wrap around-frame glasses, he lost his last job nearly two years ago, and now is a stay-at-home dad of sorts to the niece — Jaylyn, toddler who was left with the family a year ago by Genel’s troubled brother.

“I won’t stop until heads roll,” he says, his voice rising. “I want people fired. I want people held accountable.”

Genel, 34, agrees that the family was wronged, that Bank of America should have honored a lease that doesn’t expire until the end of September. She shares Mogelberg’s outrage over the loss of belongings they claim a bank contractor stole while they were locked out of their home.

But increasingly, his preoccupation seems a distraction from more pressing demands.

Genel fears she will lose her job as a purchasing manager at a power company, the family’s sole source of income. Already, she has been warned about being late and missing work. She was permitted to retrieve nothing when she was forced from her home, so she wears the same work outfit — a striped skirt and black sweater — nearly every day.

Her two preteen sons, who are 10 and 11, have moved in with their father. Jaylyn, who recently took her first steps in a hotel like this one, isn’t sleeping well. Last week, Genel borrowed $80 from a coworker to buy food and diapers. The family has just a few belongings: a box of ibuprofen, a bottle of blue cheese dressing, a Curious George doll, some clothes.

They don’t have a lawyer and Bank of America has refused to yield. By any measure, the couple is losing this fight.

Genel turns to Mogelberg. “You need to stop engulfing yourself with the emails, with the phone calls,” she says, beginning to cry.

“We can’t keep going like this,” she continues. “It’s unbearable.”

“I know,” he says, “I know.”


Over the past six years, foreclosures have wreaked immense harm on people, neighborhoods and the American economy. Though the market is now much improved, an estimated 4 million homes are in some stage of default or foreclosure.

The Huffington Post has extensively chronicled the cost of the crash to homeowners, and the widespread failures of the mortgage industry to effectively manage it. But millions of renters have also been swept up in the crisis — collateral damage in wars fought between banks and their landlords.

“Tenants in many cases are the most innocent victims of the foreclosure crisis,” says Kent Qian, an attorney for the National Housing Law Project in San Francisco. “They had nothing to do with the fact that their landlord stopped making mortgage payments.”

In California, at least one-third of housing units going through foreclosure are renter-occupied, according to Tenants Together, a nonprofit housing agency. According to one academic study, tenants account for 40 percent of all U.S. evictions in foreclosed properties, or tens of thousands each month.

Many quickly pack up and leave, moving somewhere else without much fuss. But others attempt to serve out the terms of their leases, a right allowed under federal law, but not much liked by new owners, who want to clear them out as soon as possible for resale or rent.

The Protecting Tenants at Foreclosure Act of 2009 safeguards the right of renters to complete the term of their lease in situations in which the new buyer does not intend to occupy the residence, assuming they have not violated the lease terms.

Mogelberg and Genel signed a lease on a three-bedroom condo in April 2012. Finances had been tight for a while, with both of them out of work at one time or another. But this was a steal: just $850 a month, in a market where rent for an apartment this size could be more twice that.

Seven months later, in November, they received a notice that Bank of America had purchased the home out of foreclosure. “You should talk to a lawyer NOW to see what your rights are,” the notice stated.

The family approached a local legal nonprofit, but were turned away. The demand for services was just too high, they were told.

Fernando Gaytan, a senior attorney at the Legal Aid Foundation of Los Angeles, tells HuffPost that there are not enough housing lawyers to meet the demand in his region. Renters are in an especially tough spot, he said, because they typically don’t have much time to present a case.

Unlike homeowners, for whom eviction is typically a drawn-out process that can last for years, renters are normally allotted 90 days or less to prove they have a right to occupy a residence.

The first eviction date, Jan. 1, came and went. Mogelberg and the bank continued to spar over whether the family had the right to remain in the condominium. At one point, he said, he was told by phone that the bank was treating this property as “owner-occupied,” which he found baffling, considering that the previous owner had died and the property was in the control of her estate.

Throughout, Mogelberg believed he would prevail, he said. He researched federal and state consumer protection law extensively, to the point where he could cite parts of the code from memory. He said the family tucked the money they would have been paying in rent had Bank of America accepted their checks into savings.

Three months later, on March 21, Mogelberg was at home with Jaylyn when Orange County sheriff’s deputies showed up. He had to leave right now, he says he was told.

He was not permitted to take anything as he left, he said, –not even a diaper bag or formula for the baby. The door was secured behind him with a lockbox, he said.

For two weeks, the family lived in hotel rooms, using up their savings. Mogelberg complained to the U.S. Department of Housing and Urban Development, which controlled the previous owners’ mortgage, and had sold the property out of foreclosure to Bank of America. A HUD contractor negotiated their reentry with the bank, and the eviction was rescinded — a rare reprieve.

They returned to chaos, they claim. Dressers were overturned, clothes and belongs strewn about. Cigarettes had been extinguished on furniture. The toilet was fouled with human waste. When they tallied the damage, they realized many of their possessions were gone.

“All of a sudden you go home and there’s no home,” Mogelberg said.

He confronted the bank contractor who let them back into the home. According to public records, that contractor, Daniel Ray Slusher, has been convicted of multiple felonies, including identity theft and receiving stolen property. He has been arrested at least eight times, according to Orange County court records, most recently in May, two months after this episode took place.

Slusher could not be located for comment. Emails and phone messages left for him by The Huffington Post went unreturned.

According to Mogelberg and Genel, Slusher told them that he had moved some of their items into storage. He later returned a television and an Xbox game console. When Mogelberg logged into the game system, he found that someone with Slusher’s user name had recently played it, he says.

Many other items, including tools, jewelry and a box of personal papers containing birth certificates and other forms of ID, were never returned, the couple claim. Mogelberg says he is missing a red Ronald McDonald watch with a leather band that his mother had bought for him in 1976. It was the kind the company gave its executives that year.

Slusher owned a company called Expert Property Preservation. He worked indirectly for Safeguard, a Cleveland-based company that is the dominant player in an industry spawned by the American housing bust.

A recent Huffington Post investigation focused on Safeguard as the largest player in the bank contracting industry. In recent years the company has been the target of hundreds of lawsuits alleging that its workers have wrongly broken into properties and carted off people’s property.

“Since the general allegations were made in March about missing personals, we have attempted to obtain information from [Mogelberg and Genel] so that we can conduct a thorough investigation, and we have continued to offer help in other ways as well,” a Safeguard spokeswoman said in a statement.

The cycle repeated. A few months later, the family received yet another eviction notice.

The second lockout happened the morning of Aug. 1, while Mogelberg was in court seeking to stop it.

Once again, the family was not allowed to retrieve any of their possessions. Genel later sneaked into a detached garage and grabbed Jaylyn’s stroller, so she wouldn’t have to carry the girl in her arms while they waited for Mogelberg to return.

“If I catch you here you will go to jail,” she said she was told a sheriff’s deputy.

An Orange County sheriff’s office spokesman declined to comment.

Bank of America says it has dealt in good faith with Mogelberg and Genel. The bank claims it did not receive a copy of the lease until after the second eviction, and that it still has not received a copy of a check proving that a claimed $3,500 deposit was paid.

A bank spokeswoman said Mogelberg and Genel were offered $5,000 to walk away from the property, but that they did not respond to the offer.

Mogelberg claims he faxed a copy of the lease to the bank’s outside law firm at least twice. He did not keep receipts of those faxes, he said.

He turned down the relocation assistance because accepting the money came with a catch: giving up his right to later sue over the affair. At this point, Mogelberg still thinks he will prevail in a fight to win a financial award from the bank. He says he can win a civil judgment worth far more than $5,000.

Housing lawyers say this is a familiar story. New owners are often eager to put homes they purchase out of foreclosure back on the market for sale, especially now that home prices are rising in many places. That gives them a financial incentive to see that the property is vacated as soon as possible, so that it can be marketed again.

To this end, paperwork often goes missing. Banks claim that notifications that owners are supposed to deliver are never received.

“This is a very common dispute,” said Fernando Gaytan, a senior attorney at the Legal Aid Foundation of Los Angeles. “Financially strapped tenants are often faced with the allegation that they didn’t supply documents on time.”

And when renters go looking for assistance, there are few places to turn. Gaytan said there simply isn’t enough free legal assistance to meet the high demand.

When the eviction happens, it is often traumatic, he said. “It can rattle a family to its very core.”


Researchers have found that homeowners in foreclosure or default situations face greatly elevated risks of illness and depression.

A 2009 study in the American Journal of Public Health, for example, found that people undergoing foreclosure counseling at a housing agency in Philadelphia had higher rates of depression, hypertension and heart disease.

A related study found the depression rate among senior citizens in foreclosure situations was eight times that of typical Americans.

Mogelberg was an Army Rangers soldier who served in Kuwait during the first Gulf War. He often feels crippling pain in his extremities — symptoms, he suspects, of Gulf War syndrome. The symptoms have been worse since he was evicted, he says. Mentally, he seems barely able to cope at times. Especially when it comes to more bad news.

It’s late afternoon in a hotel parking lot. Mogelberg is bending over the back seat of his pickup truck. He had come to check up on the boys’ two pet rats, kept in a cage on the floorboard. But he forgot to leave the windows down, and the cab of the truck is explosively hot.

One of the rats is dead. The other is extremely sluggish. He pours water over its whiskered nose, but it has no effect.

“I think she died in my hand just now,” he says.

He carefully places the rat back in the cage. Then he covers his eyes with his hands and begins to cry.

“It’s my job to prevent this from happening, and I’m failing at it,” he says.

In his past life, he was at his best under stress, he says. Now he has trouble managing his feelings. He cries a lot more, he says.

Genel is less demonstrative, at least in front of a reporter. But she is also struggling.

“I don’t even know what to do,” she says.

The contrast between her work and home life is profound. By day, she is a purchasing manager at Belco, a Spanish-owned power company in nearby Chino, Calif. On a recent company outing, she flew inside a World War II-era B-17 bomber. She earns about $900 per week.

At night, she returns to a life she finds increasingly hard to manage.

A new apartment seems out of reach. They had bad credit even before the lockout, and most landlords screen prospective tenants. They reckon a three-bedroom apartment will cost nearly $2,000 a month, and most places require a security deposit. They can’t seem to scrape more than a few hundred dollars together at a time. They have no close family who could help them out.

Genel believed Mogelberg, she says, when he assured her they would prevail in their fight with bank, when he said they wouldn’t get evicted. She realizes now they should have planned more, saved more.

“I’ve been kicking myself in the butt,” she says.

She’s been late a lot. She has also missed days.

“I’ve been pushing my luck at work,” she says.

She does so again on a Friday morning. “I broke down on the phone while talking to my boss,” she says.

Often she can get a ride to work or borrow a company car, but today her only mode of transportation is the family’s truck. If she left, she fears they would have no way to get to the next Priceline find: A $50 room in Brea, Calif., about 15 miles away. “I can’t leave Chris and Jaylyn,” she says.

After breakfast — with the leftovers carefully packed into a plastic foam box — the family loads its belongings onto a hotel cart. Genel waits by the front entrance while Mogelberg fetches the truck.

It is a postcard-perfect Southern California day. A family staying at the hotel chatters excitedly as they exit. They are on their way to one of the amusement parks.

The next hotel is smaller and darker than this one. They will stay throughout the weekend, sharing one small room and one bed.

The next week, allotted a few hours inside their former apartment, they will retrieve several large garbage bags worth of belongings, including Genel’s father’s burial flag, a treasure she prizes among all else.

After that, they don’t know.

“I’m at my breaking point,” Genel says.

Also on HuffPost:

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  • 10. SunTrust Banks Inc.

    Loans in foreclosure: 6,001
    Avg. property value: $207,157
    Pct. seriously underwater: 64%

    More than 6,000 loans serviced by SunTrust Banks Inc. (NYSE: STI) were in foreclosure as of February. Like most U.S. banks, SunTrust has been embroiled in controversy over its lending and foreclosure practices in recent years. SunTrust was one of five major lenders that in November agreed to pay a combined $162 million to settle complaints that it charged improper fees on home finance loans for veterans. Earlier in 2012, the bank agreed to pay $21 million to settle allegations that it overcharged more than 20,000 Hispanic and African American borrowers between 2005 and 2009.
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  • 9. PNC Financial Group

    Loans in foreclosure: 8,545
    Avg. property value: $185,306
    Pct. seriously underwater: 55%

    PNC Financial Group Inc. (NYSE: PNC) serviced more than 8,500 loans in the foreclosure process as of last month. The average property value was just $185,306, one of the lowest of all banks, and the average debt on these mortgages was $202,286. Of the 8,545 loans in the foreclosure process, approximately 55% were considered seriously underwater. At the end of 2012, PNC was the 10th largest mortgage servicer in the country, with a portfolio size of $169.4 billion. PNC was recently required to pay $70 million in order to settle allegations of illegal foreclosure practices.

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  • 8. HSBC Holdings

    Loans in foreclosure: 16,317
    Avg. property value: $233,670
    Pct. seriously underwater: 60%

    More than 16,000 loans serviced by HSBC Holdings PLC (NYSE: HBC) were in the foreclosure process as of February 2013. Six in 10 of these mortgages were considered seriously underwater. In January, the bank agreed to pay $249 million to settle complaints that it had wrongfully foreclosed on U.S. homeowners. Under the terms of the settlement, the bank paid out $96 million to 112,000 homeowners, while the remainder of the money went to reducing mortgage balances and forgiving outstanding principal on short sales, or selling a property for less than what is owed. Earlier this month, HSBC announced it was selling $3.2 billion worth of consumer loans to trim down U.S. operations

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  • 7. Citigroup

    Loans in foreclosure: 27,697
    Avg. property value: $202,390
    Pct. seriously underwater: 54%

    Citigroup Inc. (NYSE: C) serviced $6.3 billion in outstanding mortgage debt on homes in foreclosure, the seventh highest amount of all banks. Of homes in the foreclosure process, 54% were considered seriously underwater. While this figure is high, it was better than most of the nation’s largest banks. Citigroup is still fighting court battles regarding its mortgage practices as authorities accuse it of unfairly evicting people from their homes. These legal proceedings continue to hurt the company’s bottom-line.

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  • 6. Bank of New York Mellon

    Loans in foreclosure: 31,821
    Avg. property value: $236,703
    Pct. seriously underwater: 67%

    At the end of 2012, Bank of New York Mellon Corp. (NYSE: BK) had $1.4 trillion under management and more than $26 trillion under custody. A core focus of the company’s business is its function as a custodian, tasked with safeguarding financial assets and handling various monetary and financial transactions. During the financial crisis, the Treasury Department named the bank as custodian for its bailout fund — meaning the bank provided record keeping and cash management for the fund. Although BNY Mellon is not a loan servicer responsible for executing the foreclosure process on delinquent loans, it is listed as the plaintiff or beneficiary in nearly 32,000 foreclosure proceedings nationwide, according to RealtyTrac data. The bank is listed because it acts as trustee on certain mortgage-backed securitizations, which are created when a large number of mortgage loans are pooled and placed in a trust. Foreclosure action related to properties held in the trust must be brought in the trustee’s name even though the trustee is not involved in the day-to-day foreclosure proceedings.

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  • 5. Deutsche Bank

    Loans in foreclosure: 33,608
    Avg. property value: $228,446
    Pct. seriously underwater: 63%

    In January 2007, Deutsche Bank A.G. (NYSE: DB) bought home loan provider MortgageIT for $430 million. Soon after, the U.S. housing market collapsed. In May 2012, the bank agreed to pay the U.S. federal government more than $200 million to resolve charges that MortgageIT misrepresented the quality of mortgage loans it insured on behalf of the Federal Housing Administration. Three years ago, Deutsche Bank also paid the Federal Deposit Insurance Corporation $54 million to settle allegations against MortgageIT. While Deutsche Bank does not have a servicing arm, it acted as a trustee on more than 33,000 loans in the foreclosure process across the country, twice the number of any other non-U.S. bank.

  • 4. U.S. Bancorp

    Loans in foreclosure: 44,881
    Avg. property value: $206,754
    Pct. seriously underwater: 62%

    Nearly 45,000 loans serviced by U.S. Bancorp (NYSE: USB), with a cumulative property value of just under $9.3 billion, were in default as of February. About 28,000, or 62%, of all mortgages in foreclosure were considered seriously underwater. The bank was among the 10 financial institutions that agreed to pay $8.5 billion to settle allegations of widespread mortgage abuse in the foreclosure process, with U.S. Bancorp’s share of the payments totaling $80 million. The bank was the third-largest mortgage originator in 2012, lending $84.5 billion. This was up significantly from the $49.1 billion it lent in 2011.

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  • 3. JPMorgan Chase

    Loans in foreclosure: 54,325
    Avg. property value: $208,183
    Pct. seriously underwater: 54%

    As of February 2013, J.P. Morgan Chase Co. (NYSE: JPM) serviced nearly 55,000 mortgages that were in the foreclosure process, worth $11.4 billion. Fortunately for the bank, just 54% of those homes in foreclosure were considered seriously underwater, a significantly lower percentage than banks such as Bank of New York Mellon and Deutsche Bank. The bank was able to provide more loans in 2012 than it did in previous years. That year, the bank was responsible for 10% of all mortgage loans in the United States, worth $182.2 billion. This was up from the $146.7 billion the company had lent in 2011.

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  • 2. Wells Fargo

    Loans in foreclosure: 84,903
    Avg. property value: $205,550
    Pct. seriously underwater: 56%

    Wells Fargo Co. (NYSE: WFC) serviced $19.9 billion in total mortgage debt, a higher figure than any other bank except for Bank of America. Wells Fargo’s past lending practices received intense scrutiny in the past several years. The bank was one of the 10 servicers that participated in the $8.5 billion mortgage settlement announced in January. The bank was also required to pay $175 million in 2012 to settle accusations that it discriminated against African American and Hispanic customers between 2004 and 2009. Despite these troubles, Wells Fargo was the largest mortgage lender in the U.S. during 2012, originating 28% of all mortgages, worth $524 billion.

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  • 1. Bank of America

    Loans in foreclosure: 96,319
    Avg. property value: $203,956
    Pct. seriously underwater: 61%

    Bank of America Corp. (NYSE: BAC) serviced more loans for homes in foreclosure than any other bank in America as of February, at more than 96,000. In all, these properties had more than $23 billion in mortgage debt, and 60% of them were seriously underwater. The bank’s purchase of mortgage lender Countrywide Financial has been especially criticized. As of mid-2012, the acquisition was believed to have cost Bank of America over $40 billion. According to Mortgage Daily, the bank is taking a step back in both mortgage lending and servicing. In 2012, it cut the amount of mortgage loans it originated from $156.1 billion to $78.7 billion, while cutting its mortgage servicing operations by 21%.

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