Rose Gudiel and her family were squatters in their own home. They had lost a two-year battle against foreclosure, and the eviction date had arrived. They hunkered down in the house on Sept. 28, surrounded by dozens of homeowner advocates and friends, hoping to stave off forcible removal.
“(The bank) kept saying we can’t do anything. Your case is closed,” said Gudiel. “Our stand was, ‘No, we’re not leaving. This is our home. We worked hard for it and we’re just not going to leave.’”
But instead of the anticipated confrontation, there was a dramatic reversal of fortune. Fanny Mae canceled the eviction notice and offered the Gudiels a loan modification that could enable them keep their home.
Why? Fannie Mae and loan servicer OneWest won’t discuss the case. But nonprofit advocates say a series of bold protests — with reinforcements from the “Occupy Wall Street” movement — and a spate of media interest put Rose in the limelight and forced the banks to back down.
It was a small victory — and Gudiel still has to finalize her deal with the bank — but one that Southern California housing activists hope to repeat. It also provides an example of how the sprawling "Occupy" movement — often criticized for its lack of focus — can lend muscle to specific goals pursued by organizations and individuals.
Gudiel’s version of the foreclosure on the 1,200-square-foot home she has shared with her parents and a brother in this working-class suburb of Los Angeles since 2005 is starkly at odds with the limited information provided by the banks.
According to Gudiel, when she tried to make the $2,500-a-month mortgage payment two weeks late in November 2009, OneWest refused the payment and instructed her to pursue a loan modification, a long process that ultimately ended in rejection in January.
Gudiel said she fell behind when the family suffered a tragedy and two financial setbacks: Her brother, Michael, was killed in a drive-by shooting, meaning he was no longer contributing to the mortgage payment. At the same time, Gudiel was temporarily earning less in her job with the California Economic Development Department after being furloughed because of the state budget crisis.
Shortly thereafter, Rose Gudiel’s income returned to normal, and a second brother moved in to help with the mortgage.
Gudiel continued to work through the loan modification process but encountered obstacles at every turn, said Peter Kuhns, director of the Los Angeles branch of Association of Californians for Community Empowerment, a nonprofit that has been working on her case.
“Month after month, she supplied documentation to the bank for the modification,” he said. “At the same time, each month she saved the money she would have used to make the house payments so that she could make back payments (so) at any point OneWest could accept her money.”
An impenetrable processGudiel and her advocates say the process was impenetrable. OneWest, the loan servicer, offered no explanation as to why she failed to qualify for loan modification programs. And they say it was impossible to find a contact to work with at Fannie Mae, the lender.
“It’s hard to even know whether they were trying to help her modify the loans,” said Kuhns. “Up until the point when she started to go public, the bank was saying she was not qualified.”
Fannie Mae and OneWest wouldn't divulge details of the case, citing privacy concerns, but indicated that much of the information that has been reported on the case by local media is inaccurate.
OneWest referred questions to the public relations firm Sard Verbinnen & Co., which said that Fannie Mae, which holds about one-third of the mortgages in the country, had not authorized them to modify the loan.
“OneWest is pleased that it has been able to work with Fannie Mae, the owner of the loan, to authorize it to offer the Gudiels a loan modification that would allow the family to stay in their home,” the firm said in a statement.
Amy Bonitatibus, a spokeswoman for Fannie Mae in Washington, D.C., said: “We have been working closely with all parties throughout the process to identify a solution — and have offered the borrower several solutions that she declined. We have approved another solution through the servicer that we hope the borrower will accept. Our goal is to resolve the issue in a responsible and appropriate way that the borrower can remain in her home.”
Tapping the power
Before the bank's change of heart, with prospects for keeping the home looking increasingly bleak, the Gudiels decided to go public.
When the five-day notice for eviction notice was posted in September, the family announced they would not leave voluntarily. They rallied loyal neighbors and friends who set up an encampment in her yard. A steady stream of advocates and volunteers brought in supplies and food, and TV crews showed up.
On Oct. 1, just days after the eviction deadline, thousands of protesters started gathering outside Los Angeles City Hall to launch the “Occupy LA” protest — the local version of the “Occupy Wall Street” protest in New York City. Gudiel thought her story would play well with the protesters and made an appeal at one of the gatherings' first daily “general assembly” meetings.
Gudiel’s story resonated with the crowd, which generally holds the belief that corporate greed and influence have driven the country off the rails.
Hers is a familiar tale here. California is the state hardest hit by foreclosure, with 1.2 million — or one in five nationwide — since 2008, according to Realty Trac.
“At Occupy LA, foreclosure is not the main thing, but… it really is the one thing that has truly pushed people to the limit,” said Sergio Ballesteros, an “Occupy LA” organizer who works on its education and workshops committee. “It is the one thing that is so tangible … kicking people out of their homes that some feel they were swindled into ... coupled with the fact that these banks that are foreclosing actually are making a lot of money. This is at the heart of the idea that we have to do something.”
After her talk, some protesters went to Gudiel’s home in the suburbs to join the vigil, and some stayed to camp.
On Oct. 4, “Occupy LA” protesters joined in a 200-strong protest with Gudiel in front of the $26 million Bel Air mansion of OneWest CEO Steve Mnuchin.
A day later, many joined her at a sit-in at the Pasadena branch of Fannie Mae, where television captured Rose Gudiel’s disabled mother giving an impassioned plea for her home. Rose, her mother, Rose Marie and seven other protesters — some of them from “Occupy LA” — were arrested, and taken away in a paddy wagon as TV cameras rolled. They were cited and quickly released.
The next day, Rose Gudiel announced to a cheering crowd that she had received a letter from the bank inviting her to discuss a loan modification proposal.
‘Bank terrorist’The Gudiels are not the first to win back their home through protest — and not the first to do so after foreclosure, said Bruce Marks, founder of the Neighborhood Assistance Corp. of America, a nonprofit based in Boston. Marks, a longtime mortgage broker, is well known for using protests to win concessions from banks for distressed homeowners.
“It’s very exciting, and we think it’s very effective for “Occupy Wall Street” and “Occupy LA” to do,” Marks said.
Marks has led hundreds of protesters armed with bullhorns and signs to the homes of financial industry titans, including Morgan Stanley CEO John Mack, Greenwich Financial Services CEO William Frey and Goldman Sachs chief Lloyd Blankfein, in some cases winning mortgage modifications for distressed homeowners within hours.
Marks’ approach is controversial, earning him a reputation as a “bank terrorist” — which he wears as a badge of honor, though he adds that he is a “non-violent bank terrorist.” But he sees the strategy as gaining steam and believes each demonstration benefits many people.
“It has a tremendous impact,” Marks said. “Now at OneWest you are going to see a lot more solutions. … The people getting (benefit from the protest) won’t even know that those two hundred people put themselves on the line.”
Individuals also are contemplating the "go public" option more often.
Rob Somerton and his wife, Ana, are considering making a public stand, if necessary, to save their 1,300-square-foot home in the Northern California town of Cobb.
They said their effort to modify a mortgage with Bank of America has led nowhere, as they have documented on , which now has more than 1,400 followers, many of whom are reporting their own struggles with banks. They recently received a 90-day notice for a foreclosure sale.
Somerton’s advice to others is: “Stay in your home. Do not leave. Stick it out no matter what. As this thing Occupy Wall Street grows and builds, I’ve seen a lot more people coming around to that. Do not cooperate. Do not fall for the ploys. Stay in your home until the sheriff arrives.”
If it comes to it, he said he plans to tap into the movement for help: “I’ve got a friend involved in Occupy San Francisco," he said. "… He’s telling me if it comes down to the wire, and I need support, he can mobilize one or two hundred people to come and occupy the property. It would be streamed live.”
Ultimately, nonprofits like the Association of Californians for Community Empowerment (ACCE) — and dozens of others united as the Refund California coalition — are pursuing policy changes that would reform the mortgage system and implement tax changes, including adding a foreclosure tax to raise money that could be used to rebuild neighborhoods blighted by vacant homes.
'CEOs need to see homowners faces' Another proposed reform is for California to set up a mandatory foreclosure mediation program, which would require the homeowner and banker to make their case before a judge. States where these programs are in place have seen a sharp decline in foreclosure rates, said Kuhns of the ACCE.
“No, it shouldn’t happen this way,” he said of the protest surrounding Gudiel. “Isn’t it ridiculous that Rose has had to go to having people camp out at her house and getting arrested with her elderly mother to get what they were already qualified for?”
But Kuhns said policy changes remain a long way off, so he and other housing activists are considering using bank protests on a wider scale: “It’s a campaign called ‘Let a thousand Roses bloom,’” he said.
Marks, the Boston activist, said that from his experience, that approach would be effective.
“It personalizes what is going on and gets back to a fundamental tenet of America, called personal responsibility,” he said. “This is what the CEOs of these huge institutions forget. They need to see the homeowners’ faces to understand the consequences. They need to meet the parents, meet the children.”
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