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Foreclosed Renters Left Homeless In Shadow Of Disneyland

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ANAHEIM, Calif. -- In a hotel room not far from Disneyland, Renee Genel slumps on a couch, her family's meager possessions scattered nearby in torn plastic shopping bags.

Unlike most of the guests here, Genel is not a tourist. This room, until noon tomorrow, is home.

More than three weeks ago, on Aug. 1, Bank of America evicted Genel, her two children, her toddler niece and her boyfriend Christopher Mogelberg from a condominium they rented. Since then, the family has lived a nomadic life, shuffling from hotel to hotel, staying in whatever cheap room they can secure using a discount travel website.

This evening they got a good rate at a Hilton and splurged. The room is cleaner, and larger, than their usual accommodations.

Mogelberg, 38, spends hours each day hunched over an old laptop, firing off increasingly desperate messages to bank officials, demanding thousands of dollars in compensation for harm he says his family suffered.

A big man with black wrap around-frame glasses, he lost his last job nearly two years ago, and now is a stay-at-home dad of sorts to the niece -- Jaylyn, toddler who was left with the family a year ago by Genel's troubled brother.

“I won’t stop until heads roll,” he says, his voice rising. “I want people fired. I want people held accountable.”

Genel, 34, agrees that the family was wronged, that Bank of America should have honored a lease that doesn't expire until the end of September. She shares Mogelberg's outrage over the loss of belongings they claim a bank contractor stole while they were locked out of their home.

But increasingly, his preoccupation seems a distraction from more pressing demands.

Genel fears she will lose her job as a purchasing manager at a power company, the family’s sole source of income. Already, she has been warned about being late and missing work. She was permitted to retrieve nothing when she was forced from her home, so she wears the same work outfit -- a striped skirt and black sweater -- nearly every day.

Her two preteen sons, who are 10 and 11, have moved in with their father. Jaylyn, who recently took her first steps in a hotel like this one, isn't sleeping well. Last week, Genel borrowed $80 from a coworker to buy food and diapers. The family has just a few belongings: a box of ibuprofen, a bottle of blue cheese dressing, a Curious George doll, some clothes.

They don't have a lawyer and Bank of America has refused to yield. By any measure, the couple is losing this fight.

Genel turns to Mogelberg. “You need to stop engulfing yourself with the emails, with the phone calls," she says, beginning to cry.

"We can’t keep going like this," she continues. "It’s unbearable.”

"I know," he says, "I know."

***

Over the past six years, foreclosures have wreaked immense harm on people, neighborhoods and the American economy. Though the market is now much improved, an estimated 4 million homes are in some stage of default or foreclosure.

The Huffington Post has extensively chronicled the cost of the crash to homeowners, and the widespread failures of the mortgage industry to effectively manage it. But millions of renters have also been swept up in the crisis -- collateral damage in wars fought between banks and their landlords.

"Tenants in many cases are the most innocent victims of the foreclosure crisis," says Kent Qian, an attorney for the National Housing Law Project in San Francisco. “They had nothing to do with the fact that their landlord stopped making mortgage payments.”

In California, at least one-third of housing units going through foreclosure are renter-occupied, according to Tenants Together, a nonprofit housing agency. According to one academic study, tenants account for 40 percent of all U.S. evictions in foreclosed properties, or tens of thousands each month.

Many quickly pack up and leave, moving somewhere else without much fuss. But others attempt to serve out the terms of their leases, a right allowed under federal law, but not much liked by new owners, who want to clear them out as soon as possible for resale or rent.

The Protecting Tenants at Foreclosure Act of 2009 safeguards the right of renters to complete the term of their lease in situations in which the new buyer does not intend to occupy the residence, assuming they have not violated the lease terms.

Mogelberg and Genel signed a lease on a three-bedroom condo in April 2012. Finances had been tight for a while, with both of them out of work at one time or another. But this was a steal: just $850 a month, in a market where rent for an apartment this size could be more twice that.

Seven months later, in November, they received a notice that Bank of America had purchased the home out of foreclosure. “You should talk to a lawyer NOW to see what your rights are,” the notice stated.

The family approached a local legal nonprofit, but were turned away. The demand for services was just too high, they were told.

Fernando Gaytan, a senior attorney at the Legal Aid Foundation of Los Angeles, tells HuffPost that there are not enough housing lawyers to meet the demand in his region. Renters are in an especially tough spot, he said, because they typically don't have much time to present a case.

Unlike homeowners, for whom eviction is typically a drawn-out process that can last for years, renters are normally allotted 90 days or less to prove they have a right to occupy a residence.

The first eviction date, Jan. 1, came and went. Mogelberg and the bank continued to spar over whether the family had the right to remain in the condominium. At one point, he said, he was told by phone that the bank was treating this property as "owner-occupied," which he found baffling, considering that the previous owner had died and the property was in the control of her estate.

Throughout, Mogelberg believed he would prevail, he said. He researched federal and state consumer protection law extensively, to the point where he could cite parts of the code from memory. He said the family tucked the money they would have been paying in rent had Bank of America accepted their checks into savings.

Three months later, on March 21, Mogelberg was at home with Jaylyn when Orange County sheriff's deputies showed up. He had to leave right now, he says he was told.

He was not permitted to take anything as he left, he said, --not even a diaper bag or formula for the baby. The door was secured behind him with a lockbox, he said.

For two weeks, the family lived in hotel rooms, using up their savings. Mogelberg complained to the U.S. Department of Housing and Urban Development, which controlled the previous owners' mortgage, and had sold the property out of foreclosure to Bank of America. A HUD contractor negotiated their reentry with the bank, and the eviction was rescinded -- a rare reprieve.

They returned to chaos, they claim. Dressers were overturned, clothes and belongs strewn about. Cigarettes had been extinguished on furniture. The toilet was fouled with human waste. When they tallied the damage, they realized many of their possessions were gone.

"All of a sudden you go home and there's no home," Mogelberg said.

He confronted the bank contractor who let them back into the home. According to public records, that contractor, Daniel Ray Slusher, has been convicted of multiple felonies, including identity theft and receiving stolen property. He has been arrested at least eight times, according to Orange County court records, most recently in May, two months after this episode took place.

Slusher could not be located for comment. Emails and phone messages left for him by The Huffington Post went unreturned.

According to Mogelberg and Genel, Slusher told them that he had moved some of their items into storage. He later returned a television and an Xbox game console. When Mogelberg logged into the game system, he found that someone with Slusher’s user name had recently played it, he says.

Many other items, including tools, jewelry and a box of personal papers containing birth certificates and other forms of ID, were never returned, the couple claim. Mogelberg says he is missing a red Ronald McDonald watch with a leather band that his mother had bought for him in 1976. It was the kind the company gave its executives that year.

Slusher owned a company called Expert Property Preservation. He worked indirectly for Safeguard, a Cleveland-based company that is the dominant player in an industry spawned by the American housing bust.

A recent Huffington Post investigation focused on Safeguard as the largest player in the bank contracting industry. In recent years the company has been the target of hundreds of lawsuits alleging that its workers have wrongly broken into properties and carted off people’s property.

"Since the general allegations were made in March about missing personals, we have attempted to obtain information from [Mogelberg and Genel] so that we can conduct a thorough investigation, and we have continued to offer help in other ways as well,” a Safeguard spokeswoman said in a statement.

The cycle repeated. A few months later, the family received yet another eviction notice.

The second lockout happened the morning of Aug. 1, while Mogelberg was in court seeking to stop it.

Once again, the family was not allowed to retrieve any of their possessions. Genel later sneaked into a detached garage and grabbed Jaylyn's stroller, so she wouldn't have to carry the girl in her arms while they waited for Mogelberg to return.

“If I catch you here you will go to jail,” she said she was told a sheriff's deputy.

An Orange County sheriff’s office spokesman declined to comment.

Bank of America says it has dealt in good faith with Mogelberg and Genel. The bank claims it did not receive a copy of the lease until after the second eviction, and that it still has not received a copy of a check proving that a claimed $3,500 deposit was paid.

A bank spokeswoman said Mogelberg and Genel were offered $5,000 to walk away from the property, but that they did not respond to the offer.

Mogelberg claims he faxed a copy of the lease to the bank's outside law firm at least twice. He did not keep receipts of those faxes, he said.

He turned down the relocation assistance because accepting the money came with a catch: giving up his right to later sue over the affair. At this point, Mogelberg still thinks he will prevail in a fight to win a financial award from the bank. He says he can win a civil judgment worth far more than $5,000.

Housing lawyers say this is a familiar story. New owners are often eager to put homes they purchase out of foreclosure back on the market for sale, especially now that home prices are rising in many places. That gives them a financial incentive to see that the property is vacated as soon as possible, so that it can be marketed again.

To this end, paperwork often goes missing. Banks claim that notifications that owners are supposed to deliver are never received.

"This is a very common dispute," said Fernando Gaytan, a senior attorney at the Legal Aid Foundation of Los Angeles. "Financially strapped tenants are often faced with the allegation that they didn't supply documents on time."

And when renters go looking for assistance, there are few places to turn. Gaytan said there simply isn't enough free legal assistance to meet the high demand.

When the eviction happens, it is often traumatic, he said. "It can rattle a family to its very core."

***

Researchers have found that homeowners in foreclosure or default situations face greatly elevated risks of illness and depression.

A 2009 study in the American Journal of Public Health, for example, found that people undergoing foreclosure counseling at a housing agency in Philadelphia had higher rates of depression, hypertension and heart disease.

A related study found the depression rate among senior citizens in foreclosure situations was eight times that of typical Americans.

Mogelberg was an Army Rangers soldier who served in Kuwait during the first Gulf War. He often feels crippling pain in his extremities -- symptoms, he suspects, of Gulf War syndrome. The symptoms have been worse since he was evicted, he says. Mentally, he seems barely able to cope at times. Especially when it comes to more bad news.

It's late afternoon in a hotel parking lot. Mogelberg is bending over the back seat of his pickup truck. He had come to check up on the boys’ two pet rats, kept in a cage on the floorboard. But he forgot to leave the windows down, and the cab of the truck is explosively hot.

One of the rats is dead. The other is extremely sluggish. He pours water over its whiskered nose, but it has no effect.

“I think she died in my hand just now,” he says.

He carefully places the rat back in the cage. Then he covers his eyes with his hands and begins to cry.

“It’s my job to prevent this from happening, and I’m failing at it,” he says.

In his past life, he was at his best under stress, he says. Now he has trouble managing his feelings. He cries a lot more, he says.

Genel is less demonstrative, at least in front of a reporter. But she is also struggling.

"I don't even know what to do," she says.

The contrast between her work and home life is profound. By day, she is a purchasing manager at Belco, a Spanish-owned power company in nearby Chino, Calif. On a recent company outing, she flew inside a World War II-era B-17 bomber. She earns about $900 per week.

At night, she returns to a life she finds increasingly hard to manage.

A new apartment seems out of reach. They had bad credit even before the lockout, and most landlords screen prospective tenants. They reckon a three-bedroom apartment will cost nearly $2,000 a month, and most places require a security deposit. They can't seem to scrape more than a few hundred dollars together at a time. They have no close family who could help them out.

Genel believed Mogelberg, she says, when he assured her they would prevail in their fight with bank, when he said they wouldn’t get evicted. She realizes now they should have planned more, saved more.

“I’ve been kicking myself in the butt,” she says.

She’s been late a lot. She has also missed days.

“I’ve been pushing my luck at work,” she says.

She does so again on a Friday morning. “I broke down on the phone while talking to my boss,” she says.

Often she can get a ride to work or borrow a company car, but today her only mode of transportation is the family's truck. If she left, she fears they would have no way to get to the next Priceline find: A $50 room in Brea, Calif., about 15 miles away. “I can’t leave Chris and Jaylyn,” she says.

After breakfast -- with the leftovers carefully packed into a plastic foam box -- the family loads its belongings onto a hotel cart. Genel waits by the front entrance while Mogelberg fetches the truck.

It is a postcard-perfect Southern California day. A family staying at the hotel chatters excitedly as they exit. They are on their way to one of the amusement parks.

The next hotel is smaller and darker than this one. They will stay throughout the weekend, sharing one small room and one bed.

The next week, allotted a few hours inside their former apartment, they will retrieve several large garbage bags worth of belongings, including Genel's father's burial flag, a treasure she prizes among all else.

After that, they don’t know.

“I’m at my breaking point,” Genel says.

This story appears in Issue 67 of our weekly iPad magazine, Huffington, available Friday, Sept. 20 in the iTunes App store.

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