Rosalina Gomez is a $13-an-hour janitor who cleans the U.S. Bancorp executive offices every night.
Last week, Gomez tried to meet with Richard Davis, U.S. Bancorp's chief executive, to ask him to halt the foreclosure of her Minneapolis duplex and to give her family a mortgage that reflects its reduced valuation and their ability to pay.
Gomez, 49, was preparing to deliver a letter at a banquet honoring Davis. Bank officials persuaded her not to interrupt the luncheon and instead to meet with U.S. Bancorp's Twin Cities manager. She did.
After conferring with executives at J.P. Morgan Chase, which also has a role in the Gomez mortgage, U.S. Bancorp agreed to a two-month extension of the March 11 date by which Rosalina and Hector Gomez and their teenage son were to be evicted from their duplex.
"I want Richard to help my family keep our home," Rosalina said through an interpreter last week. "But we need a payment we can afford. The house was valued at more than $200,000 in 2006. And now it is valued at $65,000."
The Gomez situation offers a window into how the mortgage boom, fueled by cheap money, vulnerable borrowers, con artists, lax regulators and loose lenders, nearly flattened the U.S. economy. It also illustrates how difficult it is to untangle the mortgage web even after a borrower has gotten the attention of the CEO.
U.S. Bancorp officials told me they have little power to intercede. The Minneapolis bank is the trustee for investors who own the mortgage.
"We didn't originate the loan, we didn't service it and we didn't place that property in foreclosure," U.S. Bancorp spokesman Steve Dale said. "We did find out that Chase was the servicer of the loan. We helped Mrs. Gomez and her husband get an extension. And they get 60 extra days to make up their minds what to do."
U.S. Bancorp maintains that it isn't calling the shots, only doing what is required of the mortgage trust and Chase. The property has been foreclosed and U.S. Bank bought the duplex at auction last September for $35,092. Under Minnesota law, the Gomez family had to redeem the mortgage or be out by March 11.
Javier Morillo, president of Local 26 of the Service Employees International Union, represented Rosalina Gomez at the meeting with bank officials on Feb. 26. She is a union member.
"U.S. Bank arranged the meeting with Chase, USB bought the house at a Hennepin County sheriff's sale, and USB has enormous control over this situation," said Morillo. "U.S. Bank administers the trust that owns the mortgage. Every time we asked Chase to do something, the woman said she would need the trustee's permission."
A spokesman for Chase Home Lending in Chicago, Tom Kelly, said: "We spoke to the family and asked them for certain financial information. We'll review the situation and look for ways to keep them in the house."
A medical crisis, a lost job
Rosalina and Hector Gomez, who makes $15 an hour working reduced hours at a factory since the recession hit, bought the property on 18th Av. S. in 2004. They fell behind after Rosalina missed work several years ago to recover from surgery to remove a stomach tumor, which also resulted in a $26,000 medical bill. She lost another cleaning job in 2009 when her longtime employer lost the contract to clean St. Paul's Securian Life building.
According to Rosalina Gomez, 49, who immigrated from Mexico in 1989, and documents filed in Hennepin County, the Gomezes obtained a $198,432 loan to buy the property from Bankers Mortgage Co. of Shoreview in 2004. The loan was sold later that year to U.S. Bank Home Mortgage, which sold the loan along with others in a pool to investors through a process known as securitization.
Two years later, as the Gomezes were struggling to make the monthly payments, U.S. Bancorp turned down a request to restructure the mortgage. The couple turned in 2007 to a Maple Grove mortgage broker named Edgar Fretes, a Spanish-speaker who told them he could find a better deal.
Rosalina Gomez, who has a grade school education, said she understood Fretes would find them a fixed-rate mortgage. She said she and her husband trusted him because he was friendly and Hispanic. They didn't read or didn't understand the paperwork.
Documents indicate that they accepted a $204,744 adjustable rate mortgage with Chase Bank at 7 percent interest. Fretes got a $7,000 commission. The monthly payment was adjusted upward $100 to $1,432 in October 2008. The Gomezes, struggling with medical bills and loss of income, fell behind.
Fretes did not respond to an inquiry this week.
Early in 2009, the family was declared delinquent on the mortgage and foreclosure proceedings began. U.S. Bank bought back the property for $35,000 at a sheriff's sale last fall and the Gomez family was ordered out of the property by March. 11.
On March 1, the Gomezes moved into a one-bedroom apartment several blocks away from the old duplex. Their 17-year-old son sleeps on the couch.
Gomezes aren't alone
Rosalina is a hardworking, respectful person who says she believes Richard Davis is a good man.
No doubt, U.S. Bancorp and Chase have the law on their side. The Gomez family, not sophisticated borrowers, trusted the financiers who told them they could stretch to make the payments and own a home.
Ironically, as market values have plunged back to earth, the Gomez family could easily afford to own the duplex at today's appraised value.
They are not unlike thousands of families who bought during the boom, only to lose a job, get sick and suddenly find themselves underwater on a mortgage. And out of their house.
The likes of U.S. Bancorp, Chase, Wells Fargo and the other giant survivors of the mortgage bust, all played a role in the ballooning home values. They say they are trying to work with their customers.
I hope it's not too late for the Gomez family.
Neal St. Anthony • 612-673-7144 • firstname.lastname@example.org