Fannie Mae Breaks Its Word

Antonina Juarez paid the rent on her Fair Haven apartment every month, even after her landlord was foreclosed on by Fannie Mae. Now Fannie Mae wants her and her kids to leave their home, violating the quasi-governmental lender’s own policy of not evicting tenants during foreclosure.

Juarez (pictured), who’s 33, is fighting the eviction with the help of attorney Amy Marx, of New Haven Legal Assistance. 

Marx has fought this battle before, and thought that she’d won.

In 2008, Marx helped win a landmark victory when Fannie Mae agreed to a new national policy of halting evictions of tenants in buildings it has foreclosed on. Fannie Mae created the policy after Marx and fellow legal aid attorney Amy Eppler-Epstein threatened a lawsuit.

“Years later, it feels like we’re back to square one,” Marx said.

The episode also illustrates the frustrations local communities have faced in wrestling, or trying to wrestle, with bureaucracies at large national lenders since the beginning of the foreclosure-fueled recession. Properties that can drag down a neighborhood sometimes remain vacant or unsold for years while the national lenders tend to massive portfolios across the country.

Marx is trying to prevent Fannie Mae from kicking Juarez out of her apartment at 129 Chatham St., where Juarez and her two daughters have been living for five years.

Marx said she has been unable to get any answers from Fannie Mae about why it’s moving to evict Juarez, apparently in violation of its own policy.

“It’s been a lesson in abject frustration for me,” said Marx (pictured). ​“I’ve made endless phone calls to everyone in the mortgage industry food chain … trying to get an answer to why [Juarez] can’t be rented to.”

Fannie Mae did not respond to repeated requests for comment for this story.

“I can’t discuss any aspect of this action with you today,” said Meghan Liljedahl, the managing attorney of the eviction department of Bendett and McHugh, the Connecticut law firm bringing the eviction action on behalf of Fannie Mae. Liljedahl refused to answer any questions, even about the spelling of her name.

“These agencies [Fannie Mae and Freddie Mac] have gotten so much money from the government, they should be responsible for taking care of people living in these properties,” said Jeremy Rosen, policy director at the National Law Center on Homelessness and Poverty. He said it’s not unusual for Fannie Mae to take action without giving any explanation.

Fannie Mae may be emptying the house so that it can sell the property. But the very tenant Fannie Mae is evicting — Juarez — would like to buy the house. She and Marx have been unable to find any information about how to buy the house from Fannie Mae.

Since Fannie Mae started sending her monthly $1,000 rent checks back to her, Juarez has been depositing $1,000 each month into a client trust account set up by Marx. She hopes to put that money towards a down payment for the purchase of the house.

Meanwhile, the threat of eviction still looms, putting stress on the Juarez family. Juarez said her daughters — 13 and 11 years old — are constantly worried they will be forced to leave the neighborhood, to leave their school and the friends they’ve made.

Eviction

Juarez and her two daughters moved into one of three apartment at 129 Chatham St. (pictured) five years ago. They signed a lease with the then owner.

Fannie Mae began foreclosure on the property in July 2010 and took control of the property in January 2012. The other tenants in the house moved out. Fannie Mae initially allowed Juarez to stay in the house.

In January of 2012, Juarez signed a new lease with FirstService Residential Realty, a property management company contracted by Fannie Mae.

FirstService didn’t take care of the house very well, according to Juarez. She said she spent three weeks with a broken boiler and couldn’t get anyone from FirstService to come fix it. She eventually called the city’s Livable City Initiative to help her.

In February of this year, Juarez got a letter from FirstService telling her she had to vacate the premises by May, or face legal action. No reason was given.

Juarez continued paying her rent, tried to contact someone at FirstService who could help her, and began talking to lawyers. In May, her monthly rent check was returned to her, along with a letter reminding her she had to be out of the house by May 17.

At the advice of attorney Marx, Juarez began setting aside her rent money in a bank account set up by legal aid. Marx said Juarez has been doing so unfailingly, on the first of every month.

Juarez said she has called repeatedly to try to find a way to stay in her house, with no response. Marx said she’s called everyone she can who’s involved in the ownership of the house. Fannie Mae initially couldn’t even find the house’s address in its records, Marx said. ​“It’s absolutely beyond ridiculous.”

“Terrible”

On Tuesday, Juarez met with Marx at legal aid’s State Street office. With the help of translator Maria Velez (at left in top photo), they discussed the case.

Marx told Juarez that she succeeded Monday in having the the eviction action temporarily thrown out, on a technicality. But Fannie Mae’s lawyers will file again, Marx said.

It just doesn’t make sense to evict Juarez, Marx said. ​“The eviction is terrible for you and your family. It’s terrible for the bank. It’s terrible for the neighborhood.”

Having a tenant in the house protects the bank’s investment, Marx said. A vacant house invites vandalism or theft, or a pipe can burst and no one would know. A vacant house can mean more crime and lower property values for the neighborhood.

Juarez said she wants to buy the house because she likes the neighborhood and her kids like going to the Clinton Avenue School nearby. The eviction is ​“not good for my daughters. They want to stay in their school,” Juarez said.

Juarez said her daughters are worried. ​“They beg me to stay in the house.”

“Responsibility”

Rosen, of the National Legal Center on Homelessness and Poverty, said it’s hard to estimate how many people nationally are in situations like Juarez’s.

“We take a lot of calls on this issue of renters in foreclosed properties. This is not an uncommon scenario,” Rosen said.

One of the reasons numbers are hard to estimate: Many people may simply abide by an eviction notice and move out. Some people don’t know they can get a lawyer, or may earn too much to qualify for a legal aid lawyer, but too little to afford a private attorney, Rosen said. ​“They just up and move because they think there’s nothing they can do about it.”

In some cases, tenants are protected by the Protecting Tenants at Foreclosure Act, which requires Fannie Mae to allow tenants in foreclosed properties to finish out their leases. That doesn’t apply in Juarez’s case, because she signed a new lease with the lender.

“We still think that Fannie Mae — and Freddie Mac, for that matter — as essentially quasi-governmental agencies, have a responsibility to treat people fairly, which I don’t think they always live up to,” Rosen said. ​“They seem to see themselves in these scenarios as property managers” looking to ​“maximize returns.”

Rosen agreed with Marx’s assessment that evicting tenants like Juarez is bad for everyone involved. ​“Those are exactly the reasons why vacant properties are not benefiting anybody.”

Fannie Mae may be evicting Juarez because it has someone ready to buy the house, Rosen said. ​“I would still argue that keeping the person in there who’s living there and paying rent and willing to be an owner — to me, that’s a more beneficial outcome than yanking her out of there.”

“We do see a lot of cases where Fannie Mae takes action without explaining itself,” Rosen said. ​“It can be very very difficult to get a hold of somebody to have them explain why they’re doing what they’re doing.”

Now that Fannie Mae has lawyers involved, ​“they’ll have to show up in court,” Rosen said. ​“So they’ll be held accountable in some form to explain what they’re doing.”