The Unwinding: An Inner History of the New America (41 page)

Sylvia Landis—that was the woman’s name—was just a civilian, a private citizen, but
she had a personal interest in how the courts were handling the torrent of foreclosures
and the people swept up in them. Like nearly everyone in Tampa, she came from somewhere
else—Doylestown, Pennsylvania. Her father had been a salesman, chronically unemployed,
and she had grown up in financial chaos. She was in her thirties before she stopped
having nightmares about starving to death, but she earned a master’s degree in personnel
administration and pulled herself up into the middle class from which her parents
had fallen. She worked as a career trainer with the Los Angeles Police Department
for two decades. In 1999, Sylvia began to prepare for her retirement by joining the
growing subculture of middle-class people who got involved in real estate. She took
a class with a Southern California investment guru named Marshall Reddick, who laced
his seminars with godly inspiration and whose motto was “helping to wipe out middle-class
poverty.” The course was like a revival meeting, with people running out of the room
to buy houses. Sylvia caught the spirit, and at one time or another she owned five
houses: two in California, which she sold for a profit; a condo in Asheville, North
Carolina; and two in Florida—one in Tampa, which she used for rental income, and a
brand-new one in Cape Coral, where she planned to live after she retired.

It didn’t work out that way.

In 2004, ovarian cancer forced her into early retirement from the LAPD with a pension.
She moved to the Asheville condo in 2007, thinking she would start a new career. In
early 2008, when the market was tanking, she found herself unable to breathe and had
to be hospitalized in the cardiac ward. She owed $157,500 on the three-bedroom house
in Cape Coral—the epicenter of the crisis, with the single highest foreclosure rate
in the country—and the rent she was collecting had dropped in half. She knew that
she was going to lose the house, and before Bank of America could foreclose, she tried
to get rid of it in a short sale, selling the property for less than she owed on it.
That was when Sylvia became acquainted with the ways of the banks.

She found a buyer in early 2009 (she was going to lose half her investment), but she
seemed to be on the phone with B of A every day, always passed from one person to
another, and the sale didn’t happen, and meanwhile she believed that the bank was
padding her costs. The term “robo-signing” wasn’t yet in use, but she received documents
that didn’t seem authentic—computer-generated copies, with erroneous dates and suspicious
signatures, of the assignment and transfer of her mortgage note to Bank of America
after it bought Countrywide, the original lender. She wrote to bank vice presidents,
to state attorneys general, to Gretchen Morgenson of
The New York Times
, to anyone who might care. She ran out of money for attorney’s fees and had to represent
herself. All this while she was still recovering from cancer, and needless to say
the stress wasn’t good for her health.

At the end of 2009 she completed a short sale on the house in Cape Coral. As if this
had never happened, two weeks later, the bank’s law firm, David J. Stern, sued Sylvia
for default. (Stern was the biggest and most notorious foreclosure mill in Florida,
run like a legal sweatshop with a hundred thousand cases a year, most of them from
Fannie and Freddie, earning profits that its boss spent on four mansions, ten luxury
cars, two private jets, and a 130-foot yacht, before being shut down by a state fraud
investigation.) It took Sylvia four more months to find someone at the bank who would
straighten out the wrongful foreclosure mess, but her credit was shot.

By then she had moved to Tampa. She had fifty thousand dollars’ equity in her house
there, with a ninety-one-thousand-dollar fixed-rate mortgage. It made financial sense
to get rid of the Asheville condo, even at a steep loss, and claim the Tampa house
that she’d used for rental income as her residence. And her one companion, a hyperactive
little shih tzu—Sylvia had no children—needed a yard. It was a very modest place,
in a working-class subdivision called Sugarwood Grove where her neighbors drove trucks
and fixed their own houses. All the same, she needed a roommate. In 2007 she’d had
a million dollars in assets. Now she had zero. Her savings were gone—she would have
been on the street if not for her government pension. Along the way, she had given
a big chunk of money to Wajed “Roger” Salam, a Tampa “joint-venture expert,” “founder
of the Mastermind Forum,” and onetime associate of the motivational speaker Anthony
Robbins. Needless to say, she never saw that money again. Back in L.A., some members
of the real estate guru Marshall Reddick’s club had filed a class action lawsuit against
their mentor for fraudulent home sales in Florida (according to Sylvia, Reddick created
more middle-class poverty than he’d ever ended). Still, though she regretted not having
trusted her instinct and gotten out of the market with a lot of money when she saw
the crash coming, Sylvia wasn’t ashamed of getting into real estate in the first place,
even though investors were now vilified for causing the crash, consigned to the same
status as subprime mortgage lenders. Wasn’t it the American way to take the initiative
and help yourself?

A phrase that she once read in a
New York Times
column described her perfectly: “the formerly middle class.” She knew that countless
others were making the same downward journey. Sylvia had grown up apolitical, with
unquestioning respect for authority—she didn’t even know the name of her union at
the LAPD—but the experience with the bank changed her. She called it “outright fraud,”
something she had never imagined possible. A very conservative impulse that came from
Doylestown, a fear of chaos and longing for law and order, led her downtown to the
George E. Edgecomb Courthouse of the Thirteenth Judicial Circuit. She wanted to see
what happened to foreclosures when they reached the bar of justice. She thought that
her observations might be helpful to others.

Sylvia felt a certain awe on the Monday morning when she first went to court. Her
instinct was to be polite and not make any fuss, but she had trouble finding the foreclosure
court—there was no public schedule of hearings. She was told by a receptionist on
the sixth floor that cases would be heard in Room 513, but she found that Room 513
was in a locked section of the fifth floor, with no court officer in sight. She went
down another floor to Courtroom 409, where the receptionist had suggested there might
also be hearings (though nothing seemed certain, because nothing was written, and
the law was nothing if not written). The door to Courtroom 409 was open. Inside, there
was a bailiff. She told Sylvia that there was nothing to watch, just administrative
procedures.

“Are there any rules against my sitting in?” Sylvia asked.

At the bench, Judge Doug Little was presiding over a telephone and a cartful of file
boxes. Present on speakerphone was an attorney from the Law Offices of David J. Stern,
Esq. “Good morning, Your Honor,” the phone squawked, in keeping with the solemnity
of the proceedings. As the rocket docket got going, Sylvia began taking notes. The
original mortgage document was often missing from the file, and the judge would tell
the lawyer on the line to get it in by the end of the week. In some cases the entire
file was missing. Several defendants showed up or had a lawyer represent them. There
was Michael Mcrae, who had lived in his house for eighteen years, with two sons and
a new job, and who was trying to refinance the loan (the judge extended the sale date).
There was Howard Huff, a black man with little education, who didn’t seem to know
where the house in question was located, since he had simply agreed to put his name
on a mortgage as an investment vehicle with a broker he knew, and now found himself
being sued by the bank. (Sylvia, in distress, ran out after Huff and urged him to
contact Legal Aid. Huff looked at her in bewilderment.) But the overwhelming majority
of the cases went uncontested. Sylvia knew how it was, how the banks beat them down,
lied to them, gave them the runaround, didn’t answer calls, until, by the time their
day in court finally came, most defendants had long since given up. Justice was delivered
in their absence, in the blink of an eye.

“I spend more time at the McDonald’s drive-through window,” Sylvia said later, “than
people who were losing their homes got.” Present in their stead, she felt something
different from the stress of her own ordeal, something more like empathy.

Near the end of the morning session, Judge Little suddenly addressed her. “Is there
anything you need?”

“Could I have a copy of the docket of cases?”

The judge looked uncertainly to the bailiff. The bailiff firmly shook her head: “The
docket is shredded every day.” Later, Sylvia saw the bailiff whisper something about
her to one of the court officers.

But by that point in her life, Sylvia was not as easily deterred as she might have
appeared. She waited till the end of the day, then asked again for the docket, and
this time she received a copy from the judge’s clerk. With the docket, she was able
to attach the names of homeowners and banks to the cases that she’d witnessed and
jotted down. That night, she wrote up her notes in a report and sent it to a network
of Florida lawyers active in foreclosure defense. That was how she became, without
pay, their eyes and ears in court. That was how Sylvia Landis joined a movement—the
first movement she was ever part of, “a middle-class movement,” she said, of people
concerned about law and property rights and transparency and democracy, with all the
middle-class naïveté of Americans who had always believed in the system and never
fought it in their lives. And that was how she came to know Matt Weidner.

*   *   *

MATTHEW D. WEIDNER, P.A. ATTORNEY AT LAW
, said the sign on the plate glass window.
REAL ESTATE CIVIL LITIGATION FAMILY LAW CORPORATE LAW
. Basically, Weidner took anything that walked through the door—he was a door lawyer,
the subsistence farmer of the legal world, a couple-grand retainer up front. He worked
out of a crappy storefront office between a saloon and a bikini bar on a sketchy strip
of downtown St. Petersburg, his messy curved desk taking up most of the available
floor space. Weidner seemed a little sketchy, too, at first.

He was in his late thirties, Florida-born. An old debit card showed that he’d once
been fat, but he got into triathlons and trimmed down, and the wall behind his desk
filled up with framed medals beneath his degrees. He was divorced, having left a house
with a big mortgage to a wife who didn’t want to sell. He knew the fall was imminent
when Hummers started appearing in their subdivision—the arrogance, the absurdity of
it all. Weidner himself leased a white Cadillac, his contribution to the U.S. auto
industry, with a camouflage survival backpack in the trunk. He had an animated pink
face, a bowlegged walk, and a quick throwaway line for every situation he walked into.
He would enter Room 400 of the St. Petersburg Judicial Building, his pale blue eyes
widening in mock horror at the assortment of dark-suited attorneys present, and announce:
“Bunch of thugs in this courtroom.” Once he got going, the sentences rolled out in
fluent waves of excitement and indignation. “We’re consuming crap from wherever but
we’re not making anything. How are we supposed to make mortgage payments here in the
United States when we don’t make anything else? What if we have a brownout or a blackout
that’s completely accidental but shuts down New York City or Chicago? How long do
you think it’s going to take before absolute panic sets in?” Then, at his hyperbolic
height, he took a verbal step back to check himself: “Am I being hysterical?”

Weidner hadn’t always held apocalyptic views about America. He had started life as
a Boy Scout in the home of spring break, Daytona Beach. His uncle, Don, was director
of the Florida Republican Party when the state was still largely Democratic—under
him the party was established in all sixty-seven counties and held its first state
convention, in 1979. Matt was suckled at the breast of Ronald Reagan, attended Young
Republican events, devoutly believed in God and country, American exceptionalism,
self-reliance, and small government. In college, during the Gingrich revolution in
Congress, he named his boxer Newt. He was all for invading Iraq—“We’d do a good deed
and get a forward operating base of a gas station.” And yet, looking back, he now
saw that the rot had already set in with his parents and their generation, in the
seventies. Weidner’s grandparents busted their asses after World War II and died with
their house paid off—hell, his granddad was still working while his dad, with his
reverse mortgage, had been retired and screwing off for a decade. “Our parents were
fat and lazy,” he said. “Our grandparents would never have mortgaged everything and
lived off the credit. If you look at the gross domestic product in the past twenty
years, in particular the last ten years, it’s not off anything we’ve produced. It’s
trading on the paper of what was produced thirty years before that.”

Weidner got his law degree from Florida State in 1999, then went to work as a lobbyist
for the Florida Academy of Pain Medicine. His job was to fly around the state entertaining
doctors and getting drug reps from Pfizer and Novartis to write fifty-thousand-dollar
checks at the academy’s annual conference. He would attend meetings in Tallahassee
where the room was set up so that the flow of lobbyists proceeded smoothly past the
food table to the waiting lawmaker. The moment of truth came with the handshake, when
Weidner would lock eyes with the state rep and pull the envelope stuffed with checks
from his pocket, and the state rep would palm it, feel its thickness, determine how
much time Weidner had to explain why it was important to defeat a law requiring patients
to visit a doctor every time they refilled their hydrocodone prescription because
moms wouldn’t be able to get cough syrup for their kids—then Weidner would be cut
off midsentence, time to move on.