Activists vs. lenders in foreclosure fight

“Power is not only what you have,” Alinsky schooled his followers, “but what the enemy thinks you have.”

ESOP was banking on anger. Clevelanders were losing their homes, organizers concluded, because aggressive lenders had put people in mortgages they couldn’t possibly afford.

In 2002, the group began going after lenders, servicers and mortgage brokers.

At one protest outside a branch of Charter One Financial Inc., a police officer confronted an ESOP volunteer in a shark suit.

“Are those your sharks?” the officer demanded, scooping plastic predators from the ground.

“No,” protester Christine Regula replied. “I had my tubes tied.”

They also pressed public officials to stall foreclosures proceedings. One, Steven Bucha, chief magistrate in charge of foreclosures in Cleveland’s courts, recalls being invited by ESOP to a public forum. More than 200 people packed a church basement. Bucha was seated as far as possible from the door.

“A woman gave a fiery speech about how the system had done her wrong, how the system was in collusion with the court — and here’s the guy responsible! And she pointed at me. I really couldn’t get a word out,” Bucha says. “It was like nothing else I’ve ever experienced in my life.”

Bucha and others say the “guerrilla warfare” approach was counterproductive.

“Nobody likes our tactics, which is precisely why we use them,” Seifert says.

One after another, the group squeezed and cajoled eight companies and their subsidiaries into signing pacts giving it direct access to a single executive with the authority to restructure problem loans. The companies have agreed to cut interest rates and waive penalty fees and past-due balances.

Last year, ESOP — one of four groups that counsel homeowners referred by Cuyahoga County’s foreclosure rescue program — says it got mortgages reworked for about 1,500 homeowners, most already in foreclosure.

Tony Dejak / ASSOCIATED PRESS Samantha Williams, left, an intake specialist with the East Side Organizing Project, talks with John and Becky Bittinger in Cleveland. The Bittingers, from Akron, Ohio, have come to ESOP to try and lower their interest rate for their mortgage.

“You know, there’s a fine line,” says Rocky Ortiz, the local director of the Catholic Campaign for Human Development, which provides part of ESOP’s funding. “Mark and his people have learned to walk it.”

Maybe, but in early going, some of ESOP’s targets were local or relatively small. Even some of the biggest were vulnerable, or at least open to discussion.

Could ESOP take on the biggest lender in the country? It was time to find out.

Not any boss
It’s called a “rank ’em and spank ’em.”

Nominally, it’s a meeting. But that sounds too polite, longtime ESOP volunteer Barbara Anderson says. It’s a venting session, about as calm as a trading pit. At a rank ’em in January 2006, ESOP organizers declared Countrywide their villain of choice.

A month later, they “hit” Garmone’s house in suburban Painesville.

“Please call Mike at home ... and tell him to do the right thing: produce his boss to a meeting with ESOP!” the group urged its followers.

ESOP didn’t want just any boss. They demanded Angelo Mozilo, Countrywide’s chairman and CEO.

They got a meeting with a pair of executives at the Cleveland office of the NAACP, in May 2006. After 20 minutes, ESOP negotiators walked out because Countrywide’s representatives would not sign a pledge to negotiate.

Countrywide will not answer questions about its dealings with ESOP.

“We want that relationship (with ESOP) to continue to improve so together we can help more borrowers,” Rick Simon, a company spokesman, said. “Going back to the past doesn’t help those borrowers.”

But letters Countrywide executives sent to ESOP make clear the company’s sharp disagreement with the activists’ criticism and its irritation with their tactics.

ESOP organizers and Countrywide executives met again in the fall of 2006. The activists also sat down with officials from the federal agencies that oversee housing, trade and banking to voice concerns about Countrywide.

But the group was having trouble convincing local officials that Countrywide was the villain they said it was, Seifert says. The campaign moved to the back burner as ESOP negotiated an agreement with another lending firm.

The standdown, though, was temporary.

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