John Cadiz Klemack, Jose Hernandez and Bobbi Eng
The foreclosure crisis is a simple bump in the road for those willing to fight their banks to save their dreams.
It has been five years since the national housing bubble burst, and in that time more than five million homes have been repossessed due to foreclosure. California leads the country in that regard.
But what your bank doesn't want you to know is this: you may be able to fight them -- and win.
It happened for a Bakersfield couple who had purchased their dream home in a Salt Lake City suburb in 2007. Merrill and Laverne Chandler had planned to retire there but in the process lost their savings in the stock market.
"All of a sudden, it's gone. And that's not a good feeling," Merrill Chandler told NBCLA.
The couple is in their 70s now, Merrill is still working in a warehouse in Bakersfield -- their dream home sitting in Herriman, Utah. For a while it was empty; for now there's a renter. Their story explains why.
Last March, Merrill and Laverne, with the help of their son, Merrill, Jr, fought their bank over the foreclosure and won a summary judgement. A Utah judge claiming the bank couldn't prove they owned the deed to the home, having sold it over and over on Wall Street, and therefore could not foreclose.
Merrill Chandler, Jr. was so moved by his parents' plight, he started the National Association of Foreclosure Defense Advocates (NAFDA), which now helps poeple understand their rights in the field of securitized mortgages and teaches attorneys to defend the homeowners in court.
Chandler, Jr. says when home prices peaked in 2006, it was the same time adjustable rate mortgages came due -0 higher home prices meant higher mortgages at refinancing time.
"What's happening in Southern California is that people who could afford a legitimate payment for the home they bought are being reset to higher payments and they can't afford those payments anymore," he said.
In a nutshell, the Chandlers' mortgage was sold to an investment bank, which spread the wealth to trustee firms which sold it to someone else and so on and so on -- each entity making money on the mortgage -- but leaving Merrill and Laverne with no clear answer as to who physically held the deed. The judge agreed.
"We were very fortunate," Chandler, Jr. said, "because the judge saw that the securitization process occurred and he wasn't aware of who the owner of the debt was."
In a summary judgment, the judge stated, "It does not appear the bank... was the proper party to initiate default."
The Utah house became what's called a "permanent possession" for the Chandlers.
For more information on foreclosures in your neighborhood, RealtyTrac is a nationally-known resource. You can get specifics on areas of the country, states, counties, cities and zip codes.
NAFDA - the National Association of Foreclosure Defense Advocates - has a huge database of resources and contact information to see if your mortgage might be securitized.
The U.S. Department of Housing and Urban Development has a website set up with resources about foreclosures: what to know, how to avoid it, etc.
And for a history of the Housing Bubble and 2006 burst, you can CLICK HERE.