A mobile home sits unoccupied just outside the Sierra Vista mobile home park.
Earlier this summer, US Treasury Secretary Tim Geithner summoned executives from the country's 25 largest mortgage servicers to a meeting. For those who haven't had the pleasure of first-hand experience, servicers are the billing and collections agents of the home loan business.
The Obama administration's goal for the meeting was to slow down the wave of foreclosures around the country by giving the servicers billions of dollars as incentive to lower homeowners' monthly payments. The mortgage modification program promised "hope for homeowners"; CNN's headline before the meeting said, "Obama turns up heat on mortgage servicers."
That's one way of looking at it.
There are two widely accepted villains in the story of the housing market crash: greedy banks making predatory loans and greedy homebuyers buying McMansions. A third group gets less attention: people on society's margins who had few housing choices except for high-interest mobile home loans.
On that list of 25 servicers was Green Tree Servicing, LLC, a Minnesota company that is the nation's largest servicer of mobile home loans. According to Treasury Department figures, the mortgage modification program makes Green Tree eligible for more than $91 million in taxpayer money.
"That's crazy. That's really crazy," Santa Fe bankruptcy lawyer Tami Schneider says.
To understand why Schneider thinks it's so crazy, first understand Green Tree, a company that draws vitriol on sites like pissedconsumer.com, where a borrower calls the company "corporate bloodsuckers." The company has faced allegations of predatory lending since the 1990s.
"Green Tree did a lot of bad shit," Homewise Executive Director Mike Loftin says.
For a time, Schneider says, Green Tree was a creditor in most of the personal bankruptcies she handled. And among Santa Fe County mobile home owners in default, "you rarely see another lender," she says.
Susan Turetsky, executive director of the New Mexico Landlord/Tenant Hotline, says she gets many calls from people in foreclosure on Green Tree mortgages, but can't help them. "Green Tree is very busy with the mobile home parks," she says.
Indeed, its name is prevalent amid the stream of debt cases in the First Judicial District Court in Santa Fe.
Green Tree not only services mobile home loans for other lenders; until 2003, it made many such loans itself. According to its 2008 "fact book," Green Tree has 15,241 units under management in New Mexico, worth $496 million.
That's a big share of a huge business. Two mobile home parks (Cottonwood Village and Riverside De Santa Fe) are among the top 10 most valuable properties in Santa Fe County. As of 2005, state officials listed 14 mobile home parks in Santa Fe County, housing one of every 58 county residents.
Those residents' financial troubles differ from the overextended McMansion set. Unlike many middle-class borrowers, mobile home residents have always been at risk of eviction.
"My perception is the rate of [mobile home] repossession is not appreciably different this year," Green Tree general counsel Brian Corey says. "These are not the same types of credit you hear about in the mortgage market, where people were acquiring real estate without being able to pay for it."
That may be half true. In its 2008 report, Green Tree boasts about its aggressive collections practices, thanks to its "personal relationships" with borrowers. That means "field visits"—rather than just phone calls—when a borrowers falls three months delinquent.
Those "personal relationships" mean Green Tree can make money even when borrowers default. They don't mean the company shows mercy, as one recent and egregious local case demonstrates.
In 2000, Christina Gutierrez purchased a new double-wide Redman manufactured home with her then-boyfriend David Baros and his mother, Bernice. The home was installed at the Sierra Vista mobile home park on Zepol Road, a tidy neighborhood where many mobile homes have handmade "for sale" signs in the windows.
According to court documents, the home itself cost $61,600. Green Tree's finance charge was more than double that amount: $128,700. That's a nearly 10.72 percent annual interest rate. "It's obviously high," Loftin says. "People originating subprime loans don't inform the borrower, 'You could pay half the interest rate.'"
The buyers put $7,500 cash down and agreed to make 360 monthly payments of $509, plus property insurance, also from Green Tree.
Four years later, with $116 to her name and thousands in credit card and other debts, Gutierrez filed for bankruptcy.
At the time, she took home $1,600 a month working at what is now CHRISTUS St. Vincent Regional Medical Center, and the monthly home payment was by far her biggest single expense. Gutierrez could not be reached for comment.
Bankruptcy documents show Gutierrez surrendered her equity in the home. Nevertheless, Green Tree named her in its April 2009 lawsuit against the Baros family when they failed to make payments. As of April, they were $1,600 behind in payments on the mobile home. They still owed Green Tree more than $60,000—meaning they'd already paid more than the value of the home. David Baros, a trucker, lost his livelihood when his semi broke down, his mother tells SFR.
"My son was really trying. It really hurt him to lose his mobile home. That was his home; that was his independence. It was all he had," Bernice Baros says.
In late July, 1st Judicial District Judge Daniel Sanchez issued a default judgment in favor of Green Tree, along with an order authorizing the company to reclaim the home.
Daniel E Duncan, the Utah-based attorney representing Green Tree in the case, told SFR his success rate in such cases was good, then demanded not to be quoted.
Such massive finance charges on mobile homes are typical, as several other local cases confirm. Bernice Baros says another family member was "harassed" by Green Tree for two years after trying to get out of a mobile home contract. Green Tree charged one Santa Fe woman $19,600 in finance charges on an $18,700 mobile home loan; it charged another $87,400 in finance charges on a $41,800 loan.
"I see people paying on mobile homes where the resale value is 10 grand and they're paying these outrageous amounts of money," Schneider says.
Furthermore, mobile home owners rarely own the land on which their homes sit.
"When you consider the payment on the house, plus the space rent, it's a lot of money for what you're getting," Turetsky says.
Green Tree counsel Corey says it's "off base" to suggest his company charges people exorbitant rates for low-value property.
According to the Treasury Department, Green Tree offered to renegotiate the terms of 4 percent of its eligible loan portfolio through the mortgage modification program. Corey says mobile home loans aren't eligible unless the borrower also owns the land. Which means Santa Fe's approximately 2,500 trailer park residents aren't about to get a break, even as the feds shovel millions of dollars at their creditors.
"It shouldn't just be for certain people," Baros says of the government plan. "It should be for everybody."
