OAKLAND, Calif. - An Emmy-award winning flamenco dancer and her guitarist husband will likely have to leave their Oakland home this holiday season as one missed mortgage payment has gotten them in financial trouble with their service lender.
Yaelisa Petlin and Jason McGuire are fighting back even though they are scheduled to be foreclosed on Dec. 28.
Their attorney, David Smart, filed a lawsuit this month in Alameda County Superior Court alleging that his clients are victims of fraud and that their homeowner rights have been violated. He also alleged that their mortgage servicing company, SPS, or Select Portfolio Servicing Inc., based out of Utah, violated business and professional codes.
"We'll be displaced," Petlin said on Monday. "Our source of income will also be taken away from us because our house is where we teach, where we rehearse."
KTVU tried unsuccessfully to reach SPS by phone but unless you are a customer of the company, the phone system will not allow you to reach a representative to speak to. There was no email provided on the company's website to contact.
Petlin and her husband, who goes by "El Rubio," are well-known Bay Area artists. Petlin has run a successful flamenco company, Caminos Flamencos for 20 years.
As they and their attorney tell it, Petlin and McGuire missed one payment on their home in the Dimond District in 2016.
Meanwhile, their loan was taken over from Bank of America by SPS. At that time, the interest rate jumped to 6.5%.
The couple said they made up that one missed payment – paying double – in 2017.
They also said that SPS told them that they should apply for a loan modification and company officials implied their problems would be fixed. And yet their repayment plans were denied, even though SPS officials repeated to the couple that they should re-apply. Smart said the company kept giving conflicting statements, which he said they're not allowed to do.
According to their suit: "A customer service agent of SPS advised Plaintiffs to apply to SPS for loan modifications of the first and second loans, as there was a possibility that their monthly payment for each loan could be lowered as a result. The representation that there was a possibility that the payment terms of both loan agreements could be lowered as a result was false, as there was no such possibility."
Each time they submitted paperwork, they were told that something was wrong, despite following the instructions given to them, they said.
They also allege that SPS "customer service agents [continue to repeat] the false representations that the applications were incomplete," the suit states.
But the one missed payment ballooned into a host of other problems.
Smart explained that SPS representatives verbally told the couple that they could keep making their payments at the lower interest rate, which caused them to fall behind and accrue additional fees.
Then, a SPS agent told the couple that they could withhold payment until their loan modification went through, which they believed would simply be rubber-stamped – but that approval has never come after a year of waiting for their application to be reviewed.
Finally, in another conversation, a SPS agent denied their loan applications and told the couple that the company would no longer accept partial payments, that they had to pay for the entire amount they owed – which is now about $150,000.
"They were led to believe it would all be OK," he said.
Their back-and-forth with the mortgage company has continued until this summer.
That's when SPS told them there is no available option to allow them to keep their home, which is also their dance studio. A foreclosure sale is scheduled for three days after Christmas.
Smart, the attorney, said the Oakland couple is not alone in falling victim to foreclosure fraud.
"I've been representing homeowners in disputes since 2010," Smart said. "And it doesn't seem to me that there's anything different. They're still making the same misleading statements. I'm still filing lawsuits. I think this has happened to thousands of people. I've represented hundreds myself."
Petlin and her husband are devastated, as their impending foreclosure is bound to have repercussions for the Bay Area flamenco community.
"We've spent years building a community," Petlin said. "We have generated income for artists and without our home and studio that is not possible. We will have to leave the area."
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Yaelisa Petlin and Jason McGuire. Photo: David Charnack