Modification and misery

When W.T. Joseph "Tyree" Brown, a 39-year-old sales manager, lost his job and tried to negotiate a home-loan modification, he became entangled in a situation as strange as science fiction, court documents suggest.

Things were not as they seemed to be, according to a lawsuit filed in Clark County District Court. Brown said he now fears he will lose his home.

In his lawsuit, Brown said he tried to negotiate a permanent loan modification with Wells Fargo Bank. But after several months of payments under a trial loan-modification program, the bank surprised him by foreclosing and selling the house to an investment company.

"If Wells Fargo had never answered the phone, Tyree Brown would have never been foreclosed upon," attorney Tisha Black-Chernine said in an e-mail. "Mr. Brown was duped into a modification that Wells never intended to give him because Brown has equity in his house."

Wells Fargo Bank spokeswoman Natalie Brown offered a different perspective in an e-mail.

"We worked for months to find a workable solution to help our customer," Brown said. "The actions we took were both mindful of his personal circumstances and consistent with state law. Due to pending litigation, we are unable to comment further."

Michael Joe, an attorney with the Legal Aid Center of Southern Nevada, said in an e-mail that issues like those Tyree Brown raises aren't unusual in foreclosure cases.

"We have seen a fair number of cases where the homeowner enters a temporary loan-modification plan and makes payments and then gets foreclosed on," Joe said. "In most of these cases, the bank denied the permanent mod(ification), and proceeded to the foreclosure."

Joe said it's difficult to know whether the bank used the temporary loan modification as a way to extract more money because he cannot read minds.

Homeowners often claim that the bank failed to give proper notice in a foreclosure, but Joe said banks are so accustomed to these cases they usually do it properly.

Brown sought a mortgage modification after he lost his job in December 2008, according to a motion filed by his attorneys. Wells Fargo loan specialist Linda Parker told him to call back when he found work.

By the time Brown found a new job at another company, he already was late in making several mortgage payments.

Brown said Parker orally promised him a permanent loan modification after he made $645 payments for three months to "show good faith" under a temporary modification agreement.

However, Brown said, Parker didn't tell him in advance about a provision requiring him to make a balloon payment of $15,000 in the fourth month. The homeowner said he complained that Parker was "holding me at gunpoint" to sign the document.

Parker said "don't worry about it," Brown said.

The mortgage-loan specialist said he would be able to roll over the past-due sum into a new mortgage, Brown recalled.

Brown asked Parker whether Wells Fargo was doing the same thing that happened to a homeowner in Arizona, according to court documents. KPHO-TV, a CBS station in Phoenix, reported a bankruptcy case involving Bobbi Giguere, an unemployed mother, and her estranged husband, Theodore. The TV station quoted the mother saying she received a foreclosure notice from Wells Fargo while she was seeking a loan modification.

Parker assured Brown that Wells Fargo was not pursuing a scheme of that sort, according to his attorneys, Black-Chernine and Thomas Grace of Black & Lobello.

A foreclosure sale was scheduled in October but then postponed several times.

Brown, however, said he had difficulty getting Parker to respond to his telephone calls.

His father, Joe Brown, president of the law firm Jones Vargas, serves on the advisory board for Wells Fargo in Nevada and intervened on Tyree Brown's behalf.

The elder Brown spoke to Kirk Clausen, regional president of Wells Fargo Bank, and Clausen promised to try to resolve the problem.

"The local Wells Fargo president did what he could for me," Tyree Brown said. "Their response was that they aren't beholden to any executive from the Wells Fargo division (in Nevada)."

Matthew Heil, a Wells Fargo mortgage specialist in Iowa, started handling the case and asked for all the documentation that Tyree Brown had sent previously to Parker. Within days of providing the documents, however, Wells Fargo held a foreclosure sale and JFS Management Group bought the property.

The new mortgage specialist "didn't even know about the foreclosure," Tyree Brown said. "He said he tried to undo it, but it was too late."

Since then, Black & Lobello obtained a temporary restraining order preventing the buyer from taking possession of the four-bedroom, four-bathroom house in Summerlin. The order allows the Brown family to stay in the house, pending further court action.

Tyree Brown and his attorneys said he owed $130,000 on the house; Wells Fargo sold it for $183,000; and it had an estimated market value of $300,000.

In addition, Tyree Brown's attorney said that Wells Fargo failed to provide adequate notice of the foreclosure sale. The homeowner said his family would have provided the $130,000 he needed to pay off the Wells Fargo loan had he known about the new foreclosure sale date.

Tyree Brown said the family is upset about the prospect of being kicked out of a home he has owned since 1996.

It is Tyree Brown's first home and his sons, ages 13 months and 13 years, have never lived anywhere else.

"There's a lot of emotion attached to (the house)," Tyree Brown said. "We love the neighborhood and Summerlin, and we're happy living there, and we don't want to move."

District Judge Valerie Adair has scheduled a hearing for May 5 to consider a motion for a preliminary injunction to replace the temporary restraining order. Alternatively, she may dismiss the lawsuit.

Meanwhile, Tyree Brown still owes $150,000 on a second mortgage to Bank of America, but the Wells Fargo foreclosure, if upheld, would wipe out Bank of America's collateral.

If Bank of America tries to collect on the unsecured balance, Black-Chernine said in an e-mail, Tyree Brown would need to file for bankruptcy.

Contact reporter John G. Edwards at
jedwards@reviewjournal.com or 702-383-0420.