A Berkeley woman who has lived on Francisco Street since she was a child saw her home sold at auction in October despite spending five years and thousands of dollars trying to get a loan modification and working with what turned out to be questionable debt-relief companies.
When Regina Frazier leaves the house she has lived in since 1965, it will also mean that this quiet North Berkeley neighborhood of single-family homes, only a short walk from BART, will lose one of its longest term residents and the last African-American family on the block.
“If Regina is forced to leave, the neighborhood will be losing its link to the past and its heart,” said Mia Houtermans, who also lives on the block.
When Frazier’s mother died in 1999, she left her daughter the house at 1615 Francisco St., as well as the home-based childcare business she ran there. She also left behind some unpaid bills and payments owed on a loan. Frazier’s older sister took out a second loan to cover their mother’s bills, including those from a lawyer. A few years later, another sister persuaded Frazier to take out a third equity line of credit. Frazier wound up with three lines of credit totaling an estimated $160,000 on top of her inherited debt.
Frazier took over the business and the mortgage. Her financial situation was difficult as far back as 2005, but she was able to balance things until the economic downturn in 2009.
“I was running my mom’s daycare, paying everything on time, and then, in 2009, when the economy failed, my [daycare] parents lost their jobs, and I started losing kids, and then a lot of them went away to preschool and school,” Frazier said. “It caused my business to fail, and it seemed like I could never get back up again, to pay the mortgage, and things that were going on with the house. Things started breaking down.”
Frazier took on extra work. She joined the custodial staff at Berkeley Unified School District and started her own janitorial service, on top of working as a home healthcare aide for Alameda County. She also rented out rooms to three tenants.
“I always had multiple jobs, trying to be able to catch up to pay the mortgage,” Frazier said, “but it seemed like I could never do it, because there was a lot of other things I had to take care of — (including) my kids; they were young, minors.”
Juggling all of those commitments became too much. Frazier approached Wells Fargo bank in the fall of 2012 about getting a loan modification. That’s when her true troubles began.
Over the course of the next five years, Frazier said she worked with at least five different Wells Fargo “home mortgage home preservation” specialists, according to letters reviewed by Berkeleyside. Frazier was also assigned three different loan numbers.
But, working with the bank turned out to be confusing and frustrating. Frazier said communication about what exactly was happening with her loan was difficult because the bank kept changing the staff she worked with.
Someone at Wells Fargo would ask for a piece of documentation and “I’d say, ‘Well, I already sent that into what’s-her-name,’” according to Frazier.
When Berkeleyside contacted the specialists, only one of the five who sent letters to Frazier was still at the phone extension included on their letter.
Frazier said she was unable to navigate Wells Fargo’s byzantine rules.
“By me not knowing what I was doing, I was getting denied and not knowing why I was getting denied,” Frazier said.
Wells Fargo ultimately did not approve a modification of Frazier’s loan. A Wells Fargo employee said that they could not talk to a reporter about the case without Frazier’s written authorization.
Desperate to save her home, Frazier then reached out to a number of debt-relief companies that said they could get her loan payments reduced or even tossed out on a legal technicality. Over five years, Frazier paid out $15,200 to six different companies or individuals to try and save her home — all to no avail.
What appears to be a mistake on Frazier’s part is that while she was looking to get a loan modification, some of these companies she hired were really focused on conducting forensic audits. Such audits consist of searching for something unlawful in a loan package that would release a borrower from obligation to a lender.
The first company she called was Consumer Advocate. Frazier said she paid them $2,000 upfront for help. Consumer Advocate told her they would look through all of the papers from Wells Fargo and, “if they find any errors, they would probably try to sue Wells Fargo,” Frazier said, “but nothing really came of that company.”
Consumer Advocate had an office in Danville but had moved to Oakland by March 2013, when they referred Frazier to Ever Green, whose offices were also in downtown Oakland. When Frazier was in Ever Green’s office talking to an employee who was faxing Frazier’s papers to Wells Fargo, she heard someone call from Wells Fargo and say Frazier had withdrawn from the loan modification process. Frazier said she never did that.
“I said, ‘Well how did I withdraw? Was it in writing? You guys didn’t give me anything in writing saying that I withdrew from the loan mod,’” Frazier recalled.
Neither Consumer Advocate nor Ever Green has current offices under those names in Oakland or the East Bay, and Frazier had no current phone number for either company.
Amy Loftsgordon, the author of the Nolo book, The Foreclosure Survival Guide, said it is typical for so-called loan modification companies to set up shop only briefly.
A lot of these companies are “fly-by-night,” said Loftsgordon. “They close and then pop up under another name.”
“My advice regarding loan modification companies is they’re best avoided,” Loftsgordon said. “They’re not doing anything you couldn’t do yourself.”
What should have happened in Frazier’s case, said Loftsgordon, is that when she first applied for a loan modification, she should have been evaluated for HAMP, the Home Affordable Modification Program, whose federal relief guidelines were introduced in 2009.
No one at Wells Fargo was available to say whether anyone reviewed Frazier’s case to see if it qualified for HAMP.
Faced with losing her home, Frazier filed for bankruptcy in October 2013.
According to Katie Pratt, who runs her own real estate solutions company, that decision may have made it more difficult for Frazier to get a loan modification. People can get a modification after they file for bankruptcy, but the filing makes it “much more unlikely,” she said.
Frazier’s path is not unusual, and companies claiming to offer debt relief are numerous.
“Third-party mortgage modification companies seem pretty common,” Pratt said. “People in trouble often reach out to them instead of the bank directly.”
Pratt recommended that homeowners work directly with their lender, which is usually a bank. If a person seeking loan relief needs help or is having trouble getting all the paperwork together for the lender, Pratt advised seeking the help of a nonprofit such as Keep Your Home California or NACA, the Neighborhood Assistance Corporation of America, rather than a mortgage-modification company.
Further, it’s illegal to charge anyone for help getting a loan modification until after the modification has been approved, Pratt said. She also advised reading the California Homeowner Bill of Rights.
It’s not clear that Consumer Advocate ever said they could get Frazier a loan modification. However, another company with a similar name and similar tactic — auditing lenders — in Los Angeles was ordered to desist by the Federal Trade Commission in February 2013.
Two other groups that contacted Frazier, Sobak Financial and Data Services, use the same strategy of conducting forensic audits.
Frazier said she paid Sobak $1,500.
Cheri Bogaczyk of Sobak Financial declined to discuss what the company did for Frazier, citing confidentiality rules, but said that “Sobak Financial does not offer loan modifications and only provides forensic audits.”
Niki G. Adams from Data Services also confirmed that the company had worked with Frazier but declined to provide details. However, Frazier said the company advised her to stop making any mortgage payments in early 2015, allegedly because they were taking Wells Fargo to court. She said they kept sending her to court in San Francisco to file papers herself, and she estimated that she paid them between $9,000 and $10,000.
Yet another person with whom Frazier worked earlier this fall, Fabiola Taylor, promised a loan modification and took Frazier’s money upfront. Now she, too, seems to have disappeared, leaving a voicemail box that’s full and not taking messages. Frazier said she’d paid Taylor almost $1,700.
At one point Frazier looked into selling her house, in order to get out from under her debts. Frazier could have gotten a lot of money if she’d been able to sell at that time, Pratt said.
In October, Frazier’s mortgage was taken over by Rushmore [Financial].The company quickly arranged to put the house up for auction, though Frazier had hired another company, Canyon Capital (which did not charge her upfront for its services) to submit loan modification papers to Rushmore.
At that point, there were a few legal tactics that should have helped Frazier maintain ownership. Michael Yesk, a lawyer in Pleasant Hill, filed a notice of pendency for Frazier on Oct. 12. A notice of pendency, or Lis pendens, alerts financial institutions that a lawsuit has been filed concerning the ownership of a piece of property.
Yesk also tried to get a temporary restraining order on the sale of the house, according to Frazier’s daughter, Tiana Lee, but the judge refused it, and the house went to auction Oct. 17.
Lee said the house was sold at auction by Rushmore for $914,000. At that point, the mortgage debt on the house was $787,642, according to the Trustee Deed Upon Sale, registered in Alameda County. The $126,400 difference between the debt and the sales price is called the “overage.”
Frazier said Claudine Sherron, a lawyer in Turlock, is trying to recover the overage for her. Sherron confirmed she is representing Frazier, but said she could not share any information about the case because of attorney-client privilege.
Azure Rose, a former neighbor who used to run a legal research and title services company, looked through the documents filed in the Alameda County clerk-recorder’s office about the property and found that several papers had been filed under the misspelled last name of “Fraizer.” Several of the Wells Fargo letters sent to Frazier included that misspelling.
However, the address was correct, and Frazier should have received copies of all the papers that were filed.
Instead, “Regina said she was never served with a complaint,” said Rose, and nothing was posted on her house about the sale beforehand.
“I told her to ask an attorney to file a ‘quiet title action’ with the court,” Rose said. “If something fishy has happened with the property, this is an action to follow up and see whether all was done properly.”
There is one other small legal toehold for Frazier’s claim to her house. The notice of pendency filed by Yesk is still in effect, Yesk said by email, meaning that the title to the house is not free and clear for transfer to the buyer. However, the buyer could ask the court to erase the pendency notice.
If the pendency notice is removed and the buyer demands that Frazier vacate the house, she and her three tenants will lose their home.
Frazier’s daughter, Tiana Lee, has organized a GoFundMe campaign to raise money for a lawyer for her mother. So far the campaign has raised $985 of its $50,000 goal.
“I never thought I would be going through this,” Frazier said. “It’s so upsetting.” She said she’s been stressed out and unable to sleep half the time, and that she injured her back at work in October.
Lawyer Sherron’s assistant told Frazier over the phone that she has until the end of February to vacate the house, according to Lee and Frazier.
The buyer of Frazier’s house, Francis M. Ho, did not return phone calls. Records in Alameda County Superior Court show that a Francis M. Ho has been involved in a number of different real estate companies in the last decade and was a defendant in a number of court cases. In 2013, another older African-American woman said in an online petition that Ho’s San Leandro-based company, FAS Real Estate, had purchased her home at auction and was forcing her out even though she only owned $4,500.
If Frazier is evicted, her North Berkeley neighborhood will lose a steady presence and its last African-American family, according to her neighbors.
Cecilia Bowman has lived next door to Frazier for 19 years. The street is the kind of place where neighborhood kids play outside and all the adults, but particularly Frazier, keep an eye out for them. Frazier has babysat for various families, including hers, for many years.
“She’s part of the neighborhood,” Bowman said, “especially since they’ve been here so long. It’s upsetting that they have to leave. It’s very sad.”
Similarly, Houtermans, who’s lived on Francisco Street since 1975, said Frazier and her family have been an integral and important part of the neighborhood.
“Our neighborhood used to be a racially diverse and a working-class neighborhood,” said Houtermans. “Everyone knew each other. The neighborhood children played together, gathering together on the block, with all of the adults watching out for them. Regina has been pivotal to this neighborhood culture, and even in the present — in a neighborhood which has transformed into mostly white affluent families, transient tech workers, and students — Regina has maintained her open and outgoing presence.”
Editor’s note: This article was corrected after publication to state that applying for bankruptcy makes it more difficult to get a loan modification. It previously said bankruptcy made it impossible.
Update 1/11: This article has been further updated and corrected to say Katie Pratt is a real estate professional. She is not associated with the nonprofit Keep Your Home California.