Foreclosure's Final Act
Area Homeowners' Fears Unfold In High-Stakes Courtroom Dramas

By Ovetta Wiggins
Washington Post Staff Writer
Saturday, January 31, 2009

The court clerk calls his name, and Harry Rexrode, not entirely sure what to do, steps to the defendant's table. He is dressed in jeans, a flannel shirt with dried paint spattered on the sleeves and work boots. He has no attorney.

In a stern tone, Prince George's County Circuit Judge Herman Dawson asks Rexrode whether he knows what is happening to him.

Rexrode, 50, nods his head. "I want to see if I can get a continuance," he says.

Dawson grins, as if amused by Rexrode's use of the legal term. "A continuance? For what?"

"To stay," Rexrode says.

Rexrode is seeking a miracle really, in a place where there are precious few. He is in the county's foreclosure court, asking Dawson to let him remain in the Hyattsville home he has owned since 1997 a little longer before the bank takes it and he is put out in the cold.

In the foreclosure drama between homeowner and lender, this is the final act. Courtrooms such as this across the Washington region are the forums where banks ask judges to grant a default decree so they can take ownership of a home, and people such as Rexrode try to reverse or delay that decision.

They are almost always too late, and tragically ill-equipped to do so. Seated in Dawson's nondescript courtroom, most share a look of puzzlement, fearful about their futures and uncertain of how the legal system works. They sound confused when the judge begins to pepper them with questions about dates of missed payments and when the bank began warning them about default. Few offer any evidence to support their claims.

"Have you talked to a lawyer?" Dawson asks Rexrode.

"I didn't know I needed one," Rexrode responds.

Dawson, who often hears criminal and juvenile cases and has a reputation for toughness, shakes his head. Then he says something he will repeat over and over all day.

"You don't come to court without a lawyer. This is the problem."

It is obvious to Dawson that many of the homeowners don't understand the process. They wait too long to seek his help, and by the time they arrive, he has no choice but to rule in the lender's favor.

Attorneys for the lenders, in contrast, are armed with documents, including returned certified letters notifying homeowners of their late payments and the bank's plans to foreclose.

Dawson estimates that he can help in only about 10 percent of the cases. "The mortgage company has done everything they were supposed to do, but then you have a person saying they have nowhere to go," he said. "It's very disheartening, knowing you can't do anything for them.

"I can feel their pain and sympathize with them, but I can't say the house shouldn't go into foreclosure."

One man tells Dawson he was paying his mortgage on time when the interest rate suddenly jumped from 7 percent to 11 percent. He didn't understand why the payment increased. He couldn't afford it.

Looking down at the paperwork, Dawson quickly notices his adjustable rate mortgage. "It actually could go to 14 percent," he says.

Now $15,000 in arrears on his mortgage, the man has submitted a letter to the court saying he planned to "appeal" to the county state's attorney and the state attorney general. Dawson spends almost 15 minutes explaining to the taxicab driver that the attorney general and state's attorney have no say in what happens to his home.

"This court grants relief or denies relief," he says.

The man doesn't know that he should have requested an injunction to halt his foreclosure. Dawson said he would have to deny the request, because there is no evidence to support it.

But he offers some advice. "You are early in the process," he said. "Go talk to a lawyer. . . . Call your county council member, not the prosecutor."

Prince George's has more foreclosures than any other jurisdiction in Maryland. In 2008, the county had 12,573 foreclosure filings, more than a third of all the cases in the state, according to the Maryland Department of Housing and Community Development. Housing experts say the mortgage crisis has hit all income levels, with even the well-to-do facing foreclosure.

That is clear at Dawson's bimonthly foreclosure sessions. His courtroom is full of people from all walks of life, and his docket is always packed. Not all foreclosure cases end up in court, housing experts say. Many troubled homeowners work out loan modification packages with lenders on their own or engage counselors to help them. Still, Dawson hears more than 300 cases each month, and he said he handles another 700 cases administratively.

Terry Reeley of Bowie has an attorney. He speaks for her in court but is unable to convince Dawson that the bank failed to notify her about the default in a timely manner.

"The judge didn't want to hear anything," Reeley says later. "We could see sitting there that he didn't want to hear what people had to say. He was just tossing people and their lives out the door. Now I have no idea when the sheriffs will come and say 'You're out.' "

Reeley and her husband ran into financial problems after they lost their garage door business in October 2007. They fell behind on their mortgage, but she said she was unaware of the foreclosure and the sale of her four-bedroom Cape Cod home until a notice was taped to her front door.

Dawson orders Reeley and her husband to pay $60.82 a day to the bank until they leave the property or are evicted. Reeley runs from the courtroom and falls into the arms of her best friend. "This isn't fair," she said, tears streaming down her cheeks. "They stole my house."

Appearing in front of Dawson just days before Christmas, Rexrode asks for mercy. He doesn't want to leave his home during the holidays.

"The place was sold the day before my birthday, and now it's Christmas and they want me out," he says.

An unemployed painter, Rexrode tells the judge that his mortgage kept "going up and up, and I didn't know why. I was supposed to have a fixed rate."

"Where are all the people supposed to go when they lose their house?" Rexrode asked in a recent interview. His credit is so poor now that he can't get another mortgage. "I can't even get an apartment," he said.

Richard Rogers, an attorney who represented the lender during the hearing, says Rexrode's situation is not unusual. "People are in denial," he says. "They hear what they want to hear, not what they are told. Like the judge said, there are agencies out there to help people, but they have to take advantage of the help."

Rexrode is living in his house without gas because he cannot pay the bill. He has no hot water and can't use his stove. He cooks his meals in a microwave. His estranged wife, Rita, pays his electric bill, which gives him lights and allows him to use a portable heater. He suffers from congestive heart failure and was recently hospitalized with breathing trouble.

On that day in December, however, Dawson told Rexrode that he had come to the end of the road. He should have taken exception in April, before the foreclosure sale took place, Dawson advises. The bank had every right to ask for Rexrode's keys immediately, Dawson acknowledges later.

Instead, Dawson allows Rexrode to stay until Jan. 31. It is the best he could do, he said.

This week, the bank agreed to an extension with Rexrode because of his health problems, Rogers said. Rexrode must be out by Feb. 28.

Staff researcher Meg Smith contributed to this report.

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