Neighbors fight for homeowner to stay in house

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FLAGSTAFF, Ariz. - Joe Ray's neighbors came to his defense after the bank foreclosed on the home he's lived in for 60 years.
“I grew up in a time when we all trusted our bankers,” Joe Ray told 3 On Your Side.
Ray, 70, recently took on Chase Bank and lost.

After trying for eight months to get a loan modification on the Flagstaff home where he’s lived since he was 11, the bank foreclosed.

Ray got into trouble with his mortgage not because he took cash out of his home, rather, he told us that along the way he decided to refinance with an adjustable rate loan.

When that rate spiked, he said, the trouble began.
Neighbors are now rallying behind Ray.

“We are protesting the unfair foreclosure practices here in the state of Arizona and the foreclosure of Joe Ray’s home,” said Coral Evans.
The story caught fire in Northern Arizona where Ray is well known.
Some say he’s the unofficial mayor, others call him Grandpa. 
Neighbors crowded the streets outside Chase Bank with signs that said, “Bring Joe Ray Home.”
“Right now the way the laws are in Arizona, they don’t benefit the homeowners” Evans said, “they simply benefit the banks.”
But Fredric Bellamy, President of the Arizona Consumer Council feels differently.
“I don’t think the law benefits the banks or the homeowners,” Bellamy told us when we visited his offices in Phoenix. “The law has been clear and settled. It’s just not designed for this level of foreclosures.”
We asked Bellamy about a recent agreement between federal regulators and 10 major banks, including Chase.
The agreement calls for the banks to review all foreclosed loans, like Joe Ray’s, from the previous two years and offer settlements for cases that were not handled properly.
“It requires them to basically revamp the system,” Bellamy said. “To make a single point of contact to make sure there is an individual person talking to the homeowner. So things don’t fall through the cracks.”
Bellamy identifies this as the single most important part of the agreement: Homeowners will speak to only one person about their case. Not get passed around from person to person, department to department which has been a huge source of confusion and frustration and has contributed to thousands of homes going into foreclosure when the homeowners thought they were on the path to modification.
Bellamy also told us the agreement mandates that the banks deal with all of these loans in-house, rather than outsourcing.
“I think this is a real step forward,” Bellamy said, "an important step.”
How homeowners might go about seeking settlements if they were foreclosed on unfairly is not immediately clear.
In the case of Flagstaff resident Joe Ray, the bank was simultaneously pursuing two different tracks; refinancing and foreclosure.
Critics say this lulls people into thinking they are no longer at risk of losing their home.
Chase Bank told 3 On Your Side, “We gave the customer a trial modification, conducted an additional modification review, and postponed the sale.”

But that is all spokesperson Mary Jane Rogers could say on the record citing customer privacy concerns.
Joe Ray said his note on the house with fees and penalties was about $165,000.

After auction it’s listed for $99,000.
Neighbors are trying to come up with the money to buy it – not for Joe Ray. If that were to happen a little-known rule would allow the bank to require him or any proxy acting on his behalf to pay the full amount of the loan, fees and penalties – not the listed price.
“We can’t give him the house because it’s against the law,” Evans told us, “But we can let him live there.”
We asked Joe Ray what he thinks about neighbors’ efforts.

“Don’t be asking me that question,” Ray said, “because you are going to make me want to cry.”
Only time will tell if those will be happy tears.
The Return Joe Ray Home Committee has, so far, only been able to raise $1,800 of the $99,000 they would need to buy the home.
While their hearts are in the right place, the money may be harder to come by.