Love, death and foreclosure

Mike Stuckey Senior news editor • Profile • E-mail

CERRITOS, Calif. - Questions linger here, as ripe and nagging as the odor that once wafted over this former dairy capital: Who is trying to seize the home of Ray Vargas, child of the Great Depression, D-Day veteran and loving husband who just wanted to do right by his dying wife? And are they entitled to it?

In bankruptcy court documents, the party attempting to foreclose is identified as Mortgage Electronic Registration Systems Inc., or MERS, a small Vienna, Va.-based company employed by lenders to streamline the resale of mortgage loans and servicing rights. In that role, MERS claims an interest in tens of millions of U.S. home loans and the legal right to foreclose on those in default.

But MERS never gave Vargas a loan. It never collected money from him or recorded his payments. It had no ability to modify his loan.

What it did have was a copy of a document that named it a “beneficiary” of the mortgage on his home and a “nominee” for the lender and “lender’s successors and assigns.” But it has never identified the current holder of the loan.

'It makes me sick'
While such documentation has allowed many foreclosures to proceed around the nation, the judge in Vargas’ case threw MERS for a loop, ruling that the company had no right to attempt to seize his home on behalf of unnamed plaintiffs.

“No such unidentified parties are permitted in a motion before the court,” wrote Judge Samuel L. Bufford. Bufford’s October ruling kept the foreclosure on hold and opened the door for Vargas to sue MERS in an action aimed at clearing his home of the $826,549 in debt he says is the result of fraud, forgery and abuse of process.

Mike Stuckey / msnbc.com Raymond Vargas needed money to pay home health-care costs for his late wife, Ophelia.

“It makes me sick,” said Vargas, 84, a deeply religious man who believes God is guiding him in a mission to expose wrongful foreclosure. “Greed has no bounds. That’s what the whole problem is: greed, greed, greed.”

Vargas' case has captured the attention of hundreds of attorneys and others immersed in the nation’s mortgage meltdown, which saw foreclosure filings on U.S. homes hit 3 million last year. In the first six weeks of this year, foreclosure began on another 296,000, according to the Center for Responsible Lending.

Legal icon is a new and somewhat surreal role for Vargas. The Chicago native who got his first job at 8 in the depths of the Great Depression has always been a realist.

From World War II vet to painting contractor
As a Navy corpsman during World War II, he went ashore with the third assault wave at Utah Beach on D-Day to pluck his fallen buddies from the sand and patch them up as best he could. Later, he owned a painting business and took on big jobs, like the restoration of the Queen Mary, the steamship turned hotel, in nearby Long Beach.

But Vargas, hero, citizen and family man, has been sucker-punched along with millions of other American homeowners, taxpayers and the nation’s entire economy by the mortgage-lending debacle.

A series of loans from some of America’s largest mortgage lenders cost him nearly $200,000 in less than two years and destroyed financial security it took a lifetime to build. Documents reviewed by msnbc.com show that loans sold to Vargas by mortgage brokers on behalf of the lenders were loaded with features that federal officials say are the hallmarks of predatory lending.

Lenders passed around the deed to Vargas’ house as if it were a whiskey bottle at a frat party. Ultimately, he wound up in foreclosure proceedings. And, finally, bankruptcy court.

Vargas’ story is the Cliff Notes version of what has happened to the larger American economy. It is a story of greed, lax lending standards, lack of government oversight and the fantasy that real estate prices will always rise.

Now, Vargas’ story, like the larger epic, has become a nightmare. The final chapters in both will be written by judges and lawmakers who, many would argue, should have taken up their pens much sooner.

Vargas’ story is complicated but it begins simply, with love — the love for a woman with whom he shared 57 years of marriage, three sons, three grandchildren and a cozy life in this suburban oasis, about 20 miles southeast of Los Angeles. Raymond Vargas loved Ophelia Martinez and she loved him.

Vargas family photo Ophelia and Ray Vargas on their wedding day in 1948.

They married and set up house in Southern California in 1948, two years after Ray mustered out of the service, having earned a passel of ribbons and medals for service in the American, European and Pacific theaters.

In 1971, after the family had outgrown its first home, Vargas made a down payment on a sprawling stucco two-story yet to be built in one of the many dairy pastures that gave way to the city of Cerritos, now an upscale enclave of 57,000 with tree-lined streets and posh facilities like a titanium-skinned library.

Vargas’ business flourished and he became a well-known civic leader, serving seven times as commander of the local VFW.

“I got more than I deserved,” he said, his eyes wandering to Ophelia’s paintings of landscapes and floral arrangements that adorn his living room.

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