It was just an ordinary day for Andrew Haig when he received the news that would change his family’s lives forever. As far as he knew, the Haigs had never missed a payment on their second mortgage, but as Andrew sorted through his mail, he was shocked to discover a foreclosure notice from a loan servicer he had never even heard of.

“I didn’t really believe it,” Andrew recalled. “This secondary lender, FCI to be specific, had acquired the loan from another bank. I’d received a ‘goodbye’ letter from the previous bank, but I never received a ‘hello’ letter from FCI saying who they were and that I was going to start doing business with them.”

As Andrew pulled out second mortgage statements dating back to 2009 when he received a loan modification from his bank at the time, everything indicated that he had never missed a payment on his Glendale home.

“I tried to reach out to (FCI) to try to get some clarification,” Andrew said. “I didn’t know who they were… I wasn’t sure if this was some nonsense.”

But what Andrew soon learned would turn his world upside down: when he received his loan modification back in 2009, the bank had formally approved a $1200 monthly payment. However, Andrew still couldn’t afford that payment at the time, and said an employee with the bank had asked him what amount he could afford.

His answer was $400 a month, and he says the bank employee readily agreed with no further discussion about it. The Haigs had been paying that amount ever since, despite the loan being sold off to seven different servicers over the last nine years, with no indication, ever, that there was any problem.  

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Devastated and at a loss for what to do next, Andrew enlisted the help of Rich Szerman of Alta Realty Group, a Santa Clarita realtor who offers foreclosure defense services to the public completely free of charge.

“What he didn’t know is that by paying $400 a month … that left him with an $800-a-month deficit,” Szerman said. “So his debt began to balloon, and the interest on that debt feeds on itself, so it kept getting bigger and bigger… There was a financial cancer building inside his house, and he didn’t know.”

The latest victims of the second mortgage crisis, the Haig family had no idea their second mortgage debt had ballooned from $120,000 in 2009 to almost $335,000 today.

After FCI officials recently bought the loan from another servicer, allegedly without informing the Haigs, staff appeared to conduct an audit that would have informed them the Haigs had about $200,000 in equity on their first mortgage — making them a prime target for an unexpected foreclosure.

“The Haigs have a lot of equity,” Szerman explained. “Five, 10 years ago, they didn’t have any equity, so their second — performing or not — was useless. Now they have equity. Suddenly that note becomes a lot more valuable.”

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Despite his efforts to find documentation approving the $400 monthly payments from any of the servicers that held the loan before FCI, Szerman unfortunately came up empty handed.

“This has gone through, near as we can tell, at least seven different banks to wind up with the current servicer,” Szerman said. “Not one of those banks ever raised an objection. Not one of those banks ever told (Andrew) he was behind.”

When Szerman contacted FCI officials to see if anything could be done to rectify the situation, he says their minds were made up: the Haig’s house had equity, and Szerman noted FCI officials wanted it.

“They said ‘no’ to any sort of loan modification, they said ‘no’ to any sort of repayment plan, they said ‘no’ to everything,” Szerman said. “What they offered him was, ‘Give us $75,000 right now and start paying $10,000 a month.’ Now who do you know who could possibly … afford (that)? They knew very well that that was impossible.”

The apparent lack of compassion for the Haigs’ situation or any real effort to reach a resolution was shocking to Andrew, who is now forced to do a short sale on his home of 14 years to avoid a foreclosure, relocating his wife and three school-aged children in a hurry.

“We’re heartbroken,” Andrew said. “All three of our kids have grown up here, go to school here… All of a sudden, (FCI is) literally just going to steal the house away from us and there’s nothing that we can do about it without having some exorbitant amount of money to hand over to them. This doesn’t seem like a legitimate way for them to do ‘business.’”

He continued, “I don’t argue that we’re not responsible for paying off the home — that’s never been a problem for us. The previous banks that we had been with, we’ve been making regular, consistent payments on time…  And so for (FCI) to not even extend to us an opportunity to go forward in good faith and prove that we can follow through with this thing without being completely ridiculous just seems cruel.”

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Sadly, the Haig family is the latest in a rising number of homeowners who are losing their houses to what Szerman calls “zombie” second mortgages, which seem to come back from the dead after about 10 years of inactivity and destroy the family’s life.

While Andrew’s situation in unique in that he received a modification on his second mortgage and had been making monthly payments ever since, most victims of these zombie seconds received a letter in the mail after the real estate market crash of 2008 stating their loan had been “charged off” and no further payments were necessary.

While the average homeowner would take this to mean the debt had been erased, Szerman explained that this is not the case; the bank essentially declared the loan had no value and took a tax write-off for it, but then sold it for pennies on the dollar to an outside loan servicer.

These loans have typically changed hands over and over again over the last 10 years or so, before one of the servicers realizes there is now equity in the house and attempts to collect.

“You get a letter in the mail that says, ‘We now own the debt on your second you haven’t paid for 12 years,’” Szerman said. “‘If you take all of the back interest that you should have been paying that you didn’t pay, you now owe us three to 10 times — depending on your interest rate — what your initial debt was. Pay us immediately or we’re taking your house.’”

Related: Foreclosure Battle Continues For Saugus Family, Ends With Heartbreak For Dana Point Couple

Szerman has been working to raise awareness about the alarming rise in zombie second mortgages over the last year, taking it upon himself to save as many homeowners as possible from foreclosure by going toe to toe with loan servicers, always free of charge.

“This is a storm that is on the horizon and it is getting worse,” Szerman said. “I think I’m up to 17 or 18 of these in my office now. I’ll break 30 or 40 of these by the end of the year. Last year I had three.”

Anyone who had a second mortgage that was charged off around the time of the real estate market crash in 2008 could be at risk of losing their home, according to Szerman. He is encouraging anyone who believes they might fit the criteria of having a “zombie” second mortgage to contact him immediately for free assistance.

Andrew hopes that sharing his story can help save other families from being put in the same tragic situation, and has a message for the public:

“Really pay attention to who has your loan and how they do business. Be very careful about what’s going on, keep your eye on it and don’t take it for granted,” he said. “FCI, they’re not there for your interest — they’re there for the investor’s interest. They have no interest in helping the homeowner… Their ethics are terrible.”

An FCI employee familiar with the Haig’s file declined to comment for this story. A formal media request submitted to FCI officials was not returned as of the publication of this story.

To contact Rich Szerman of Alta Realty Group for free foreclosure defense services, call/text 661-714-1400 or click here.