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Losing a home and marking a homecoming

On the same day Tim Collette welcomes his soldier son back for leave from Iraq, he loses his Oregon house to foreclosure. But unlike many homeowners, Collette is fighting back.

August 10, 2011|By Kim Murphy, Los Angeles Times
  • Army Spc. Aaron Collette is greeted upon his arrival at his father's Bend, Ore., home, which had been signed over to the bank two hours earlier.
Army Spc. Aaron Collette is greeted upon his arrival at his father's… (Kim Murphy, Los Angeles…)

Reporting from Bend, Ore. — For months, since he knew his son Aaron would be coming home for two weeks' leave from Iraq, Tim Collette has been desperate to make sure there would be a home to come back to.

But on Tuesday, two things happened. First, a foreclosure auctioneer with a blue clipboard stood on the steps of the Deschutes County Courthouse, as Collette watched in silence a few steps below, and transferred the house back to the bank.

Two hours later, Collette waited in baggage claim at nearby Redmond Airport as a thin young man walked in, wearing Army camouflage, sandy suede boots, and then, a wide smile. A phalanx of grizzled military veterans waved flags.

That Collette would lose his house and celebrate a homecoming on the same day was dismal coincidence. But the 59-year-old kitchen-and-flooring contractor, who has become an expert at testifying before legislative committees, giving television interviews and mobilizing public ire at the banking industry, is determined that, unlike the thousands of foreclosure stories playing out in quiet misery across America, this one will not end quietly.

"Welcome home, son," Collette murmured.

While the rest of the nation kneeled under the recession, Oregon swan-dived. With the timber industry already long enfeebled, the new high-tech sector that had swept in powerfully in its place foundered too. By early 2009, the state's 10.8% unemployment rate was the third-worst in the nation, and Deschutes County's hit 12.6%.

New houses built in the pine-studded, high-desert former boom town of Bend suddenly stood empty. Single-family home prices declined 40% in two years, and Collette's work installing flooring and kitchen countertops evaporated.

Between 2009 and 2010, Oregon had the biggest increase in foreclosure starts in the country, averaging 96 a day.

Losing a home in Bend, Ore., it goes without saying, is no longer big news. But Collette, whose case is described by mortgage handler JP Morgan Chase as a simple situation of a homeowner who didn't make his house payments, has fought back. He has appealed to the state Legislature, won sympathy from a U.S. senator and marshaled the aid of a Portland-based advocacy group, Economic Fairness Oregon, which has used his case to illustrate the banking labyrinths homeowners must sometimes negotiate to avoid having their homes seized.

Through it all has been the image of the young man coming home from Iraq, and the troubling question of what he would come home to.

By the time the neat two-story house on Boyd Court was foreclosed on Tuesday, more than 122,000 people across the country had signed an online petition on urging Collette's bank to give him a break, and an escort of two dozen military veterans on motorcycles showed up at the airport to provide a flag-waving escort for Aaron, a 20-year-old Army specialist stationed in Basra, back to the increasingly-famous house.

Through it all, Collette, who's got work again and insists he's ready to make full payments, has been polite and persistent. He's filled out forms to try to modify his mortgage, faxed over pay records and, except for two payments he says he missed at the bank's direction, deposited at least partial payments on his house every month without fail.

"I've been going over to the capital in Salem to testify for some bills to help people in foreclosure," said Collette. "I told them the biggest problem I have now is my son's coming home from Iraq.… He just wants to come home and sleep in his own bed and be safe for 15 days. And I told him I would make that happen."

JP Morgan Chase, which has been servicing Collette's mortgage (now held by the Federal National Mortgage Assn., or Fannie Mae) offered Collette a series of deals that would allow him to stay in the house at least until Aaron's leave is up — an option that falls short of what he ultimately wants, which is to keep his house.

"Mr. Collette's petition on asked for one thing, to retain his home through his son's leave, which ends in August. We have granted that request," said Chase spokesman Thomas Kelly.

But Fannie Mae denied the request for a modification of his loan terms, and when Collette in turn rejected Chase's offer to simply take over the house without the stain of a foreclosure, Kelly said it left the bank with no recourse but to call in the auctioneer.

"We offered him what he wanted, but now he's changing what he wants," he said.

Many of the people who hear Collette's story, and by now there have been a lot, are struck by how little he resembles the classic picture of the bubble buyers, those overly ambitious folks who splurged over their heads and hoped the market would cover the deficiencies in income.

"We're not flakes. We pay our bills, we didn't overspend," he told a state legislative committee this year.

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