ELK GROVE, CA - A couple facing foreclosure from OneWest Bank has joined the growing number of homeowners, attorneys and real estate professionals who believe the bank would rather foreclose than modify a loan.
"It comes down to money and greed. All they want is your home," said Tom Cravalho, who with his wife Mona has been working for nearly two years to get out of an adjustable rate mortgage.
The Cravalhos said their original lender, IndyMac Bank, agreed to a loan modification in the summer of 2008 that would have offered them a 3 percent interest rate for five years. But then IndyMac was seized by the Federal Deposit Insurance Corporation (FDIC), which sold the bank's assets to a group of investors who formed OneWest Bank in March 2009.
Tom Cravalho said OneWest Bank has refused to honor the original agreement or discuss new terms. The Cravalhos' attorney believes OneWest is more interested in reimbursement from the FDIC for the bad loan under a so-called "shared loss" agreement than it is in modifying the Cravalhos' mortgage.
"They're going to make a lot more money getting Tom and Mona out of their house than they would leaving them in their house. A lot more money," said attorney Sean Gjerde. Gjerde explained that under the shared loss arrangement, OneWest could potentially resell the home, collect an FDIC reimbursement, and actually end up with more money than it paid for the original IndyMac loan.
The criticism of OneWest Bank is playing out in a spate of lawsuits and internet blogs. One controversial video presentation from a Fairfield-based real estate and mortgage marketing company takes an especially pointed jab at the agreement between OneWest Bank and the FDIC.
The Cravalhos are suing OneWest Bank in Sacramento County Superior Court claiming the bank violated state law by not taking adequate steps to help them avoid foreclosure. They have also filed for personal bankruptcy, which stalled a courthouse auction originally scheduled last fall.
A Fair Oaks homeowner suing OneWest Bank in Sacramento federal court achieved a notable victory last week. Judge John Mendez granted a preliminary injunction March 3 blocking a foreclosure auction while not requiring the homeowner to post a cash bond equal to the home's value.
The homeowner's attorney, Jonathan Stein, told News10 it was the first case he knows of in California where the customary bond requirement was lifted. Stein said OneWest had entered into a loan modification with his client and then unilaterally cancelled it.
Diane Henry, a spokeswoman for OneWest Bank, said she did not have a comment on the specific allegations in this story but provided an independent study that showed OneWest was engaged in more loan modifications than other comparable lenders. Henry also pointed out that OneWest has not yet received any shared loss payments from the FDIC, and that the bank only owns 7 percent of the loans it services. She referred to a press release explaining the agreement between OneWest and the FDIC.
An FDIC spokesman told News10 that any shared loss claims submitted by OneWest would be evaluated to determine whether a loan modification would have netted the bank more money than a foreclosure.
"We do actively monitor any loss share claim and if they haven't performed a modification under our specifications, we will deny the loss share claim," said Andrew Gray, the director of public affairs for the FDIC.
by George Warren, GWarren@news10.net