It’s as if Mark Roarty stands shaking his fist at the bottom of an enormous mountain he can’t quite scale.
The mountain is a symbol, stacked high with big banks, mortgage companies and the federal government.
Roarty, who lives in Poland, is just one of millions of homeowners in the United States who faced down foreclosure. But unlike the untold millions who found themselves shoved out after a losing battle, Roarty fought for four years to keep his house.
He refuses to stay quiet about his ordeal.
Roarty’s story is steeped in irony. His background is firmly rooted in finance. In 2001, he was working as a retail-loan manager originating mortgage loans for a savings bank in Troy, Mich.
In those days, the business was on an upswing. The demand for lenders offering mortgages was so great that Roarty began an online website, similar to Lending Tree, to pair lenders and borrowers in ideal matches depending on the product being pursued.
In 2002, Roarty moved to Poland and bought a house, hoping to raise his three children in the bucolic, small-town community.
As early as 2007, Roarty noticed something was amiss, however. His company could no longer compete with the subprime lenders flooding the market, offering unprecedented mortgages to just about anyone and appraising homes at unimaginable values. Later that year, the mortgage loan centers he was working for were downsized.
Then, in 2008, Roarty’s world was “turned upside down” when he received a notice in the mail telling him his mortgage was 90 days past due. If he didn’t pay up, Saxon Mortgage Services — a company he had never heard of — would begin the foreclosure process.
“I chose to stand up to this and fight, because in every situation it is fatally flawed,” Roarty said. “No one understood this, and they still don’t. The law has not caught up to the reality of the situation — these people are fighting huge machinery.”
Roarty maintains the crisis is nowhere near over. Earlier this month, he was invited to the White House to help the Obama administration find better solutions for protecting millions of homeowners against the perils of foreclosure.
Roarty has received a bevy of national attention after he launched his blog, Ohio FRAUDclosure, in April 2011. It’s a virtual lexicon of every major complaint against the “machinery” of big banks, mortgage companies and a complicit government voiced since the crisis began in 2008.
“So many people don’t understand [foreclosure]. They don’t think they have any legal rights and they’re shamed into believing so,” Roarty said. “It’s not against the law to fall behind on your mortgage payments. We need solutions to this problem, and we need them now.”
Roarty grows more irate when he considers how perplexing it was for himself, a seasoned finance man with sophisticated knowledge in the field, to navigate the foreclosure process.
To him, it’s a web of complexities little understood by even politicians, judges and others charged with resolving the crisis.
Historically, homeowners would sign a mortgage loan with a bank, one that holds a promissory note and the mortgage itself, laying out the terms and securing the agreement.
The bank would hold the mortgage, and the borrower would deal with them directly.
Before the financial meltdown, nonbank lenders began to purchase these notes and mortgages in a process known as bundling and securitizing. They would then sell the so-called bundles as investment vehicles to city and state pension funds or mutual funds on the open market.
“They turned cities, states, entire communities into giant casino chips,” Roarty said. “They bought and sold these things as commodities and gambled with the value of our homes.”
As the mortgages rapidly switched hands, servicers began collecting monthly mortgage payments on behalf of the banks. In the process, late payments were erroneously recorded, paperwork was lost or fraudulently signed, and borrowers had no idea who was holding their mortgages.
Roarty’s primary concern is the way homeowners are persecuted during the foreclosure process. Often, he says, the plaintiffs seeking foreclosure have neither the promissory note nor the mortgage, both are typically required to successfully foreclose in most states.
But in most cases, homeowners fail to realize this and they lack the legal recourse and protection to fend off foreclosure. Roarty managed to stay in his home after a four-year battle, wherein he lost his job and expended a fortune on three lawyers.
Ultimately, he took it upon himself to appeal a lower-court’s ruling upholding his foreclosure. In the 7th District Court of Appeals, in Youngstown, Roarty’s foreclosure was overturned after he successfully argued that the company seeking foreclosure failed to adequately notify him and also failed to generate a legitimate promissory note and mortgage. His case is being used as a precedent to help other homeowners.
In Ohio, more than 400,000 homeowners have been foreclosed on since 2008. The foreclosures have led to neighborhood disinvestment and a decline in average home value. In August alone, there were 193,508 foreclosures nationwide and 412 in the Mahoning Valley, according to realtytrac.com.
Though the value of homes has ticked up slightly in the Valley within the last year, the average home price here remains low at around $80,000, which greatly undercuts equity and undermines the wealth homeowners hold in their property.
“The foreclosure crisis is just one more blow for those who have chosen to stay in Youngstown,” said Ty Beatty, an organizer with the Mahoning Valley Organizing Collaborative, a grass-roots organization dedicated to removing neighborhood blight and reducing vacant property in the area. “The equity that people built in their homes throughout the years has been taken away from them as more and more people left the area.”
Roarty works closely with MVOC to educate homeowners and public officials on the local angle of the crisis. At the White House, Roarty argued for principle reduction on mortgage loans to bring down monthly payments and help thousands stay in their homes.
He is an advocate for what he calls “front-end” defenses, such as mitigation and counseling for homeowners before they ever reach the courtroom.
Though he supports the Obama administration to a certain extent, he remains critical of its efforts to repair the ailing real-estate market. Like many, Roarty believes the administration largely failed in helping homeowners the way it helped bail out banks and auto companies.
He argues the administration was too cautious in its approach to resolving the crisis and has called for greater resources, including firmer programs and greater financial aid that assists those facing foreclosure keep their homes.
“These companies are beating our government with just a little bit more knowledge, they’re getting beat to the punch in helping people and guiding them in the right direction,” Roarty said.
For now, Roarty has his work cut out for him. He says it’s a daily struggle to provide for himself and his family as he both searches for work in a shifting financial world and tries to raise awareness on his blog and at public events.
If anything, he admits its an uphill battle.
“I can’t do it all just blogging,” he said. “I get calls from all over the country, and I tell people this problem is not just going to go away on its own.”