Illustration by Dennis Nishi

The blinds were closed, and no one was home at 2910 W. Warren Blvd. in East Garfield Park one frigid January afternoon. Four Cook County Sheriff’s deputies were parked outside. In his hand, one deputy held a court order to evict the owner, Kevin Rice, who had fallen several months behind on his mortgage payments and lost the rental property in foreclosure.

Attorneys of the California-based Citi Residential Lending won the court order to evict Rice from the brownstone. Citi hired the sheriff’s office to do the eviction and a realtor to lock Rice out of the building.

There was one problem. Rice didn’t live there. His tenant, Tabitha, did. Her name has been changed to protect her identity.

Officials from the realtor’s office, Jax Realtors and REO Group, knew that Tabitha lived there and was not the landlord. A representative from the company was sent anyhow to sign the documents attesting that the address on the court order was the same one at the property, moving the eviction forward.

Since the nation’s worst housing foreclosure crisis began two years ago, the octopus-like tentacles of the global home mortgage industry have orchestrated the repossession of thousands of small apartment buildings in Cook County, affecting thousands of renters who live there.

In many cases, the evictions have been legal. In others they’re not because mortgagees–”a bank or company that collects mortgage payments–” fail to give tenants ample notice or an opportunity to contest the eviction in court. In some cases, like Tabitha’s, the evictions are illegal because there is no court order against the tenants themselves.

In Cook County, tenants facing an illegal eviction often learn about it when they open their door to a sheriff’s deputy telling them to leave. Sometimes, as in Tabitha’s case, the deputies’ orders instruct them to evict the landlord, not the tenant. If tenants are home and can verify their identity, the deputies leave and report back to the lender.

Problems arise when tenants aren’t home, said Martha DiCaro, an assistant chief who runs the Eviction, Levy and Warrant Unit of the Cook County Sheriff’s Office. “We are under the impression that the person whose name is on the order is the person who lives there,” DiCaro said. “We take the court’s order at face value and we enforce it.”

Concerns over the integrity of the mortgage industry’s eviction practices have alarmed the sheriff’s office. DiCaro has been reminding her 42 deputies to verify a tenant’s identity before an eviction. In April, the department began researching a new protocol, but officials say it’s too soon to discuss it publicly. The current protocol requires the sheriff to verify that the person named in the eviction order lives at the address only if someone is home. If no one is home the realtor verifies that the address on the court order matches the address of the eviction, and the eviction proceeds.

It’s difficult to quantify exactly how many people fall victim to illegal eviction, as most don’t seek legal help. When told by the sheriff’s office to move, most just move, said Steven Bashaw, an attorney who for 25 years represented banks in foreclosure.

An analysis by The Chicago Reporter shows the problem with evictions could affect thousands, including those that are legal, illegal, threatened, avoided or where people–”like Tabitha–”ultimately succumb. According to interviews and an analysis of Cook County foreclosure data, the Reporter found:

* In 2006 and 2007, some households have faced the threat of eviction from the more than 3,551 two- to six-unit apartment buildings that had been foreclosed upon in Cook County. Two of every three foreclosed small apartment buildings are in black neighborhoods.

* Since last summer, advocacy groups, including the Metropolitan Tenants Organization, the Legal Assistance Foundation of Metropolitan Chicago and the Lawyers’ Committee for Better Housing, have reported an increase in calls from people whose apartment buildings were going into foreclosure or had been foreclosed upon. Roughly one-third of those calls were from renters being wrongfully evicted.

* Tenants have some recourse. In at least 30 eviction settlements in the past two years, the Legal Assistance Foundation and the Lawyers’ Committee for Better Housing have helped tenants win extra time to move out and get free rent until they do so.

“There are probably a lot more folks out there who have gotten screwed,” said Gerard O’Toole, director for the Chicagobased Lawyers’ Committee for Better Housing, which provides pro bono legal assistance to the poor around issues of housing.

This is a national crisis, said Judith Liben, a housing attorney at the Massachusetts Law Reform Institute, a nonprofit firm that promotes social and economic justice through advocacy, education and legal action. “There is such a torrent of foreclosures that things are done wrong all the time,” Liben said.

Even in the District of Columbia, one of three jurisdictions or states where the law forbids tenant evictions because of foreclosure, the buildings’ new owners still pressure tenants to move, Liben testified in a Sept. 20, 2007 hearing before the U.S. House of Representatives Committee on Financial Services. Banks send tenants 30-day notices to vacate as soon as the foreclosure is complete, Liben testified. The majority of these tenants move because they’re frightened, she added.

Banks left owning foreclosed properties are trying to get the properties back on the market to be resold. It’s believed that small apartments will sell faster empty, said James Trausch, general counsel for the Illinois Mortgage Bankers Association. In a company’s haste, mistakes are made during the eviction, trumping tenants’ rights. In some cases, the wrong people are being evicted under the valid court orders. In others, tenants are not fully aware of the legal timeframe in which they have to move. Banks who have repossessed the property in foreclosure court are telling renters to move “immediately” as opposed to the 30 days allowed under Illinois law, said Bashaw.

The Reporter found at least 30 cases settled out of court during the past two years in which tenants alleged they were not given lawful notice or valid court orders when their apartment buildings went into foreclosure, according to the Legal Assistance Foundation and the Lawyers’ Committee for Better Housing. Some of the mortgagees tried to use the orders they obtained to evict the landlord against the tenant. Others didn’t give tenants the 30 days notice the law requires.

These evictions mar a tenant’s rental history. Tenants in foreclosed buildings don’t usually get their security deposits back, said Bartlett, the executive director of the Chicagobased Metropolitan Tenants Organization, an advocacy group that organizes tenants around housing affordability and availability issues. In some cases, the renter has little time to find new housing and ends up homeless or having to share housing with relatives or another family.

Some of the wrongful evictions are just honest mistakes, Liben said. Evicting a tenant because of foreclosure requires extensive coordination between many different companies and communication is not always clear. The sheer volume of today’s foreclosures and evictions creates frequent snafus, she said.

But Richard Wheelock, a housing supervisory attorney for the Legal Assistance Foundation, said that illegal evictions are attributed to the economic self-interest of mortgagees. The faster and cheaper they repossess properties and evict tenants, the faster and cheaper those properties can be sold, Wheelock said.

Mortgagees that violate the law should be punished, said Marve Stockert, executive director of the Illinois Association of Mortgage Professionals trade association. But tenant and news accounts of illegal evictions are grossly exaggerated, he said, adding that occasional mistakes are part of the cost of doing business, he said. “If there’s 1,000 foreclosures and it happens 25 times, to me, that is a really low percentage.”

Tabitha was one of the unlucky renters caught in the middle. In January, she was running errands across town when a representative from Jax locked the grandmother out of the home she had lived in for seven years. A panicked neighbor called Tabitha on her cell phone to let her know what was happening.

While Tabitha wasn’t sure what was happening, she suspected it had something to do with a mysterious letter left under her door a month earlier, in December 2007, offering her $1,000 to move. Tabitha turned down the offer–”she had nowhere to go. Tabitha was caring for her children and grandchildren in the home and couldn’t afford a moving truck.

When the deputies arrived in January, Tabitha couldn’t rush home to stop the eviction but sent a friend. When Tabitha returned home later that day, she found a Jax business card. Tabitha called hoping to get inside the apartment to pack and move her appliances, like her stove, refrigerator and air conditioner.

But it wasn’t that simple, because Tabitha didn’t know who controlled the property.

Since the 1970s, mortgage lending has become convoluted, involving many players. Many people don’t know who owns their mortgage, making it complicated to get answers when something goes wrong.

Thirty years ago, when loans went into default, banks considered foreclosure a last resort. They were often willing to avoid foreclosure if the bank’s attorney believed the borrower was willing and able to catch up, said Bashaw.

But in the 1970s, the industry began a reorganization that eventually eliminated that flexibility. Wall Street investors, who wanted to profit from home loans, began buying a portion of the underlying interest and principal that borrowers must repay. Mortgage lenders agreed to the arrangement, because in exchange, the investors put up enough capital to effectively pre-pay the original loans.

The new arrangement allowed banks to make more loans than it could otherwise, but it also undermined the borrower’s relationship to the bank that gave him the loan.

The roles that used to be performed by a single bank on Main Street, U.S.A., are now farmed out to four new companies–” some time zones or oceans apart. Today, a lender’s job is generally to screen loan applicants, set interest rates and write the check to the borrower. A separate investment bank pools lenders’ loans and converts them into bonds. Those bonds are then sold to investors so that lenders can buy more properties. A separate mortgage service company is brought in to collect the monthly loan payments for the investor owners and foreclose on the property when the payments are behind. Finally, a trustee represents the owner investors who bought the bonds on Wall Street and who own the building.

The bureaucracy becomes more convoluted when mortgage service companies hire contractors to handle foreclosures. The companies contract with attorneys to file the foreclosure and eviction lawsuits. Sheriff’s deputies enforce the eviction court rulings. Real estate agents are brought in to offer tenants like Tabitha cash incentives to leave. The realtors also act as witnesses at the evictions, secure the buildings after the eviction and search for a new owner for the property. Field asset companies haul away belongings left inside of the repossessed property. Rigid timelines have been created to coordinate the different organizations, putting tenants in a precarious position. Foreclosure lawsuits are filed within 14 days on loans that were 90 days in default, regardless of the borrowers’ intention or ability to repay it, Bashaw said.

The Metropolitan Tenants Organization, a group whose clients are largely poor or black, saw a spike in complaints, said organizer Malik Wornum. Some tenants had no heat or gas because the landlord couldn’t pay the bills and was rumored to be in foreclosure. By July 2007, renters were calling more frequently to say the sheriff was summoning them to eviction court. The organization tracked 64 foreclosurerelated calls in 2007.

“We see just the tip of the iceberg. So when I see a number of cases, I know there’s a lot more going on out there,” Wheelock said.

Outside of the changes that the Cook County Sheriff’s Office is making to address the problem of wrongful evictions, some players in the mortgage industry have also responded to tenant complaints. Deutsche Bank, the trustee for the security into which Kevin Rice’s loan was bundled, organized a meeting last summer between the mayor of Boston and several mortgage service companies to talk about tenant rights, said company spokesman John Gallagher. Deutsche Bank sent a memo to the mortgage service companies asking them to follow all applicable laws: “Attentiveness to governmental and community concerns about the impacts of foreclosure and eviction activities on neighborhoods promotes healthy, stable communities,” according to the memo.

Yet, at the beginning of May, things remained unresolved for Tabitha. When she called the company the day of her lockout, she said an employee agreed to let her in two days later at 10 a.m. Tabitha arrived at 9:45 a.m. with a brigade of minivans and cars with friends, some of whom had taken off work, ready to pack, load and move her things, despite the 33-degree temperatures outside. They waited two hours. She said Jax never showed up.

The next day, Tabitha walked into the West Side office of the Legal Assistance Foundation and briefed attorney Jennifer Payne on her case. Payne believed she could retrieve Tabitha’s belongings and get her some restitution.

Payne contacted Jax to see if the company was willing to negotiate. A company representative seemed agreeable and a date was set to meet at the apartment, Payne said. Jax officials did not show up for the second time and subsequently did not return her phone calls, Payne said. By the next afternoon, a truck from a different company was being loaded with Tabitha’s furnishings. Tabitha’s neighbor phoned and told Tabitha to hurry home. She arrived and called police. Some of her property was in the truck, some was still in the apartment. The rest was in a trashcan in the alley.

When police arrived, Tabitha showed her identification. The movers showed the officers their paperwork and called Jax Realtors and the move was stopped. According to the police report: “Complainant stated tenant home in foreclosure and contractor hired to clean building without notifying or allowing tenant to move out. Contractor returned property into residence, building resecured.” Four days later, movers were there again. Again, they left without the furnishings. By this time, the damage to Tabitha’s property was irreparable. The movers had damaged a fair amount of furniture to the point that Tabitha no longer wanted it.

When she learned that Jax owner Michael R. Fields called the Reporter’s office, Tuesday, April 29 at 10:46 p.m., to say she could get her things back from the apartment, Tabitha recoiled in disgust. “I don’t want that crap,” Tabitha said.

Fields said that his company never stood Tabitha up when she wanted to move in January, adding that Jax is not responsible for the fact that Citi Residential Lending didn’t have a court order against her personally. Citi’s attorneys are to blame, he said.

Citi Residential Lending said that it was the mortgage service company that foreclosed on Tabitha’s landlord and hired the sheriff. In a statement to the Reporter, Citi officials said: “The occupant of the property was given an opportunity to contest the eviction, but no objection was submitted. We believe the resulting eviction was conducted consistent with applicable law.”

The original property owner, Kevin Rice, could not be reached for comment.

As this story went to print, Tabitha was in the process of settling with Citi after the company had been contacted by the Reporter, said Payne, Tabitha’s attorney. Payne would not divulge the amount of the settlement, but said that it was enough money to compensate Tabitha and that she expected to receive the check in June. Citi said they were misinformed by Jax and did not get the letter Payne sent to Jax explaining Tabitha’s situation, Payne said.

Fields declined to comment further based on the recommendation of Jax’s legal counsel.

According to Payne: “If [Jax] didn’t have a court order to evict Tabitha, what [they] should have done was gone back to the bank and say, –˜Bank, you don’t have an order to evict Tabitha.'”

Christiana Schmitz helped research this article.