It was only a short time ago that Edda Lopez was living her American Dream. She had a good job, a good husband and a family. She owned a home that she loved on Devoe Terrace, near the VA Hospital in University Heights.

Now widowed, disabled and unemployed, Lopez is trying desperately to hang on to her house, which is not only her home, but a vital source of income (she rents out rooms in her house). Despite several efforts to refinance and modify her loan to make it affordable, Bank of America recently told Lopez her home would be put up for auction and that she would be forced to vacate the premises.

In response, Lopez’s church, local activists, elected officials and the Legal Aid Society are helping her fight back and, at the same time, holding her plight up as a prime example of how the government and banking industry has failed to help distressed homeowners.

At a raucous rally in front of Bank of America two weeks ago, Lopez sat on a motorized scooter and talked about her predicament. “Here I am now with the threat of losing my home and seemingly not being able to do anything about it,” she said. 

The Foreclosure Crisis

Lopez is not alone in her situation.

Every Monday at 2 p.m. in Room 600 of the Bronx County Court House, on average, more than a dozen foreclosed Bronx homes are auctioned off by banks, according to Lopez’s lawyer, Justin Haines, who handles foreclosure cases for the Legal Aid Society’s Bronx division. 

Since the second half of 2008, when the housing crisis reached a tipping point in the wrong direction, 3,601 Bronx homes have gone into foreclosure, according to statistics compiled by the nonprofit University Neighborhood Housing Program, which tracks foreclosure data.

In the past year, the Obama administration has implemented a number of measures aimed at helping homeowners avoid foreclosure. Still, advocates say the government isn’t doing enough as banks have been slow to modify loans, often leaving homeowners out in the cold.

“The government is not only in the business of protecting corporations, it’s also in the business of protecting ordinary citizens,” said Doug Cunningham, the pastor of New Day Church, where Lopez is a member.

Lopez’s life began to precipitously unravel in 2005. Following the death of her husband, Lopez became ill and eventually lost her job. She began falling behind on her mortgage payments. 

In an effort to keep her home, Lopez attempted to refinance her mortgage, but says she was swindled by a mortgage broker into accepting a so-called “balloon” mortgage. (Haines says the broker lied on Lopez’s loan application in order to push it through.) The monthly payments soon grew to the point where she couldn’t keep up with them, although she continued to make partial payments.

A Government Solution?

Last summer, Lopez took advantage of a new federal program called the Home Affordable Modification Program (HAMP), which gives banks incentives to modify the terms of loans in order to make them more affordable.

Under a trial modified payment plan, Lopez continued paying her mortgage for five months. Then, a month ago, Lopez found out from Bank of America that her house was going up for sale and that she would soon be evicted. Lopez says she only found out because she called the bank for another reason.

A Bank of America spokesman said Lopez was denied a permanent modification by her previous servicer, Wilshire Credit Corporation, because her stated income didn’t match her actual income and that she did not respond to requests for updated financial records. Bank of America took over Lopez’s loan from Wilshire in March. (Because the mortgage is folded into an investment fund called a mortgage-back security, it’s unclear who actually owns Lopez’s loan.)

Haines says the banks’ criteria for accepting permanent modifications is unclear and that, according to HAMP regulations (which have changed several times over the past year), borrowers must be notified if they are being denied or in danger of being denied a permanent loan modification. During the modified payment trial period, which is supposed to last three months, borrowers are often left in limbo for much longer, Haines said, without any notification of acceptance or denial.

Lopez contends that she did not receive a notice of denial. On the contrary, Lopez said she actually received a letter from Wilshire granting her a permanent modification. Bank of America said, according to their records from Wilshire, Lopez was notified of her denial.

While her situation is not uncommon, Haines said Lopez is fortunate to have a supportive community fighting on her behalf.

A Community Rallies

New Day leaders teamed up with organizers and activists from the Northwest Bronx Community and Clergy Coalition to fight her eviction. They enlisted the help of Haines, local Councilman Fernando Cabrera, the Borough President’s Office and staffers from Congressman Jose E. Serrano’s office. Together, they held a boisterous rally in front of the Bank of America branch on Fordham Road.

“I feel very happy to have such great support,” Lopez said. “It confirms that the people of Bronx stick by each other.”

“As Dr. King used to say, ‘we are woven into one garment of destiny,’” Cunningham said. “When she gets treated this way, we all get treated this way.”

Before the rally began, a Bank of America media relations executive called Haines from the CEO’s office in North Carolina.

In an e-mail, Bank of America spokesman Rick Sloan said the bank postponed Lopez’s foreclosure sale until June 28 “to allow time for a review” of her case and determine whether she is eligible for a permanent modification. Sloan said Lopez and Haines haven’t responded to requests for further documentation.

Haines said he contacted the bank to say he was working on compiling updated financial records. Lopez is in the process of entering into a lease with a new tenant at her home, which would boost her chances of getting a permanent modification.

“Additionally, at the time Bank of America was proceeding to foreclosure, they did not have her paper records and they had not reviewed her electronic records, yet they still were proceeding towards foreclosure sale,” Haines said in an e-mail.  

Protesters at the rally said the bottom line is that taxpayers bailed out the banks, but the banks are not doing the same for struggling homeowners. “The government was willing to help bail out the banks and not the American people,” said Cabrera. “The American people are the ones paying for those bailouts. It must then be the government and the banks helping the people.”

Ed. Note: For more of this story, including video from the rally, visit bronxnewsnetwork.org and search “Bank of America.”