Special Reports - As Homeowners' Dream Die, He's the Undertaker

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A SPECIAL SECTION: Haiti, Since the January 12, 2010 Fierce Earthquake

Posted May 10, 2010

National

As Homeowners' Dream Die, He's the Undertaker

Mr. Laubinger surveyed the house. It needed paint, a new carpet and repairs. He hoped to have it listed in a few weeks for $110,000. Credit: Sally Ryan for The New York Times

By DAVID STREITFELD

LAKE VILLA, Ill. - ” If you see Joseph Laubinger on your doorstep, start packing. His courtly presence means you have exhausted all excuses, arguments and options for keeping your house.

"It's like I'm a doctor," said Mr. Laubinger, an agent here for big lenders. "People ask me how much time they have left."

Hardly any. Legally, they have already lost ownership. If they do not respond to the carrot the lenders offer - as much as $5,000 in cash in exchange for leaving the house in good order - he employs the stick: the county sheriff, who evicts them.

Mr. Laubinger is having a busy spring. Nearly four million households nationwide are severely delinquent on their mortgages, the biggest backlog since the housing crisis began. As more and more of the homes edge toward repossession - a record quarter of a million were seized by lenders in the first three months of this year - agents like Mr. Laubinger are trying to coax people out.

Sometimes, the process is briskly efficient. The occupants have either abandoned the home or are methodically planning their departure well before Mr. Laubinger arrives bearing an incentive officially known as relocation assistance but always called cash for keys.

After months of negotiating, Israel Lopez, center, and his wife, Blanca Sanchez, had finally agreed to move out. Mr. Laubinger had a check for $1,800 waiting for them. Credit: Sally Ryan for The New York Times

But the end game of foreclosure is typically neither smooth nor quick. Some people have nowhere to go, and others see no reason to go. The lenders need someone on the scene who can resolve the situation without escalating it, which is why Mr. Laubinger is getting an abundance of assignments from the country's largest lenders as well as Fannie Mae, the government's mortgage holding company.

The agent's garage is stacked with desks and chairs, bought recently at a county government auction. "I'm expanding," he said, with immediate plans to hire two more agents to join his four-person shop. He makes at most a small fee for getting the people out; his reward comes with the commission in selling the house.

Mr. Laubinger is 60, a onetime graphic artist who has been buying and selling real estate for himself and others for a quarter-century. When times were good, he spent as fast as he could. "I spun my wheels like a madman," he said.

His territory is the northern edge of Illinois and the southernmost slice of Wisconsin - a 600-square-mile expanse that encompasses middle-class suburbs built in the last 10 years, resort homes that dot the region's many lakes and decaying cottages bought by hard-scrabble immigrants.

People in all those places are hurting, which is good for Mr. Laubinger's bottom line. Yet he shudders if anyone calls him a "repo man," and is actually a soft touch. He is quick to grant extensions to the people who ask, even though this pushes the sale of the property, and his payday, further into the future.

In the debate over whether the foreclosed are deadbeats or victims, co-conspirators with the avaricious banks or merely collateral damage, the agent nearly always takes the benign view. The most critical thing he will say is, "Everyone got greedy, and now everyone is passing the buck."

On a recent Saturday he had three houses to check up on, two in foreclosure and one trembling on the verge. Fannie Mae was sending him to examine one of the properties, where the owners had lost ownership in December but declined to decamp. A bank wanted him to snap photos of a second site, a high-end house whose defaulting owners were seeking a modification.

The occupants of the third house, Israel Lopez and Blanca Sanchez, had finally agreed to move out after months of negotiating. Mr. Laubinger had a check for $1,800 waiting for them.

Expecting a bustle of activity, the agent found the place quiet. Clearly, no one was going anywhere. Only a young boy was home. Mr. Laubinger left a message for the parents.

"They basically blew me off," he said as he drove away. It's a common problem: "People are staying longer because they're not afraid."

The house he was hired to photograph was in an upscale community, but the owners, who were either not home or not answering the door, were clearly suffering. The driveway was pocked with holes and the lawn full of weeds, a sharp contrast to the well-manicured neighbors.

Perhaps a modification would save them, but as Mr. Laubinger took his pictures, he said he had a bad feeling. "I'll be coming back here, taking this to the next level," he predicted.

His phone rang. It was Mrs. Sanchez. "We haven't found anywhere to go," she said. "We were wondering if any more extensions could be given."

Mr. Laubinger was noncommittal but said she would not be evicted that weekend. That was all Mrs. Sanchez wanted to hear.

"They're doing the math," he said. "More time is better than the $1,800 I was going to give them to leave." If he has to order a formal eviction with the sheriff, the paperwork and processing might take all summer.

The last house he visited that day was the one owned by Fannie Mae. Bajrak and Beata Lukasz, a Polish couple in their mid-30s, bought it for $190,000 in 2003 and then took $50,000 in cash out through refinancing and a home equity loan. That swelled their debt and made the house impossible to sell after the crash.

On Dec. 12, when Mr. Laubinger first visited, the couple had been in default for eight months but said they were getting a modification. Since then, Mr. Lukasz had not returned messages left on his cellphone. So after five months, Fannie Mae sent Mr. Laubinger again.

Mr. Lukasz finally emerged, saying his wife was ill with Crohn's disease, a chronic inflammation of the intestines. Forced to choose between the mortgage and medicine, he said they had chosen the drugs. But he agreed to move out for $1,500 and provided a new cellphone number.

Back in his car, Mr. Laubinger stifled a sob. "That one hurts," he said. "There's an honest man, doing everything he can."

Night fell as Mr. Laubinger pulled back into his own driveway here, about 90 minutes' drive northwest of Chicago. He was not sure he had accomplished much. But a few days later, to his surprise, the Lopez-Sanchez family agreed to leave after all.

When the agent showed up at the appointed time with the check and a locksmith to rekey the doors, the couple was still carrying things out to their battered Ford Windstar: a big-screen TV, a huge teddy bear, a steaming pot of beef stew for the evening meal.

Mr. Lopez, 31, said he had lost his job early last year after the construction company he worked for went bankrupt. "I had been paying the mortgage every month, but I told my wife, â€˜No more sense in that," he said.

The family's fortunes may be on the mend. Mr. Lopez was hopeful that he would soon be starting work on a highway crew. Until the family can get back on its feet, their church agreed to give shelter to the couple and their four children.

Finally, the house was empty. Mr. Lopez signed the documents and then pocketed the check without looking at it. Mrs. Sanchez sniffled quietly. It was not emotion, she said, but allergies. The couple drove off in the overloaded Windstar without a backward look.

Mr. Laubinger surveyed the house. It needed paint, new carpet, repairs. He hoped to have it listed in a few weeks for $110,000.

If too many foreclosed properties hit the market at once, the housing market may take another dive. The agent said that was a necessary risk. "We have to get through this," he said.

Easier said than done, perhaps. The Lukaszes have consulted a lawyer and intend to stay put as long as possible.

"The banks got so much from us, including a large down payment, I think it's fair we're not paying," said Mr. Lukasz, who works the night shift in an envelope factory. "We'll stay here until an hour before the sheriff."

Mr. Laubinger will keep working on them, but he knows that they might be in their house for many months. "This crisis," he said, "will serve me the rest of my career."

Copyright 2010 The New York Times Company. Reprinted from The New York Times, National, of Friday, May 7, 2010.

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