Activists vs. lenders in foreclosure fight

ESOP organizers got Mozilo’s personal phone number and instructed homeowners to call him in the middle of the night.

They flooded faxes at Countrywide offices with hundreds of copies of identical forms detailing Cleveland homeowners’ problem loans.

They posted signs on the front of abandoned homes owned by the lender: “Countrywide’s idea of the American Dream! Tell their executives what you think!”

In April 2007, ESOP ferried two dozen volunteers to a Countrywide office in suburban Woodmere. They walked into the tiny office, located on the town’s main shopping strip, throwing plastic sharks, handing out mock foreclosure notices and demanding a meeting with Mozilo, then left when local police arrived.

“We strongly believe that confrontational tactics and deliberate misinformation are not the way to build productive relationships that help Cleveland’s homeowners,” a Countrywide executive wrote afterward.

In June, a pair of Countrywide executives came to ESOP’s offices to meet with borrowers, promising to work with individual borrowers but again refusing to sign the memorandum.

Nine days later, ESOP showed up at a Countrywide office in the University Circle neighborhood, sharks in hand.

In late July, an ESOP regiment headed to Hudson, an outlying suburb, and tried to shove their way into the office of the lawyer representing Countrywide in its Cleveland foreclosures. The company that had been selling the group its plastic sharks heard about their tactics and cut off the supply.

Countrywide, too, was taking notice and it was not happy.

“During efforts to physically force your way into the office, one of the firm employees was actually bitten by an ESOP member,” Countrywide’s chief counsel, Sandor Samuels, wrote afterward. “We will not enter into relationships with organizations that desire to subject our employees, contractors and Chief Executive Officer to harassment.”

Countrywide insisted it was cooperating, saying it had restructured dozens of loans ESOP had brought to its attention.

But the activists said that was not nearly enough, that it was seeking more than piecemeal solutions.

Then, in October, a letter on gold-embossed stationery arrived.

“I am hopeful, for the sake of these families, that ESOP and Countrywide will move forward and work together in a constructive manner to find workable solutions to our customer’s issues,” it said.

It offered a meeting with the lender’s senior management. It was signed: “Sincerely, Angelo R. Mozilo.”

On a Wednesday in December, Samuels led a Countrywide delegation to Cleveland. ESOP rented a trolley, seated the executives in the front row for a neighborhood tour and filled the rest with homeowners.

Two rows back sat Lisa Pass, who stood to tell the story of her father-in-law’s loan and the home it had put in jeopardy. She was surprised to find the executives were much nicer than she’d imagined. And they were listening.

Nita Gardner was there, too, and she laid out the paper trail she’d assembled chronicling her efforts to hold on to the house. The papers, she says, showed she had repeatedly made the payments Countrywide demanded, only to reject her offers to buy back the house.

Afterward, one of the executives asked her how far she was willing to go to keep the house.

“Do you know what obese is?” Gardner says she answered. “Well I’m the medical standard of obese ... and I’m willing to walk the double yellow line of the Shoreway buck naked to get that house back.”

When the tour ended and lunch was served, ESOP President Inez Killingsworth turned to Countrywide’s Samuels. Would he sign a promise to negotiate? It was the same memorandum the lender had rejected for nearly two years.

Samuels paused. Then he reached for a pen.

Rising from their seats, ESOP’s army cheered.

‘I signed ... and I cried’
A few days after New Year’s, Nita Gardner’s phone rang. If she had money, Countrywide was prepared to sell her her house back.

When real estate agent Jeff Swiecicki, dispatched by the lender, arrived soon after, Gardner was still skeptical. But she signed a contract and handed over a check.

“I signed the paper and I cried,” she says. “I told him, you can’t go back on this.”

Countrywide’s decision is one of 50 to 60 loan workouts it has agreed to with homeowners represented by ESOP since December, Seifert says.

In December, the activists expected to reach a comprehensive agreement with Countrywide within four months. A few weeks later, Countrywide agreed to a $4 billion deal that will see it bought and merged into Bank of America Corp. But it has continued to negotiate.

That has the activists looking ahead. Cleveland’s foreclosure problem isn’t going away any time soon. They’re already talking about the next lender they want to go after. They’ve even got the home phone number for a certain CEO.

Now, Seifert says, all they need is a new supply of plastic sharks.

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