By Santa Clarita Realtor Rich Szerman of Alta Realty Group

This is the sad and twisted tale of an elderly homeowner from Palmdale. It is an example of how irresponsible “zombie seconds” can be and the human cost of their poor behavior.

A zombie second is a loan on a property that the owner thought was paid off, reconveyed or just gone, and has not received a payment for many years, but that has remained on the title to the home waiting to come back to life to eat the homeowner’s brain and any available equity in the owner’s property.

Imagine this: you come home from work on an average Wednesday and find a very scary letter in your mailbox saying you owe over $93,000, and if you don’t pay it immediately, you will lose your home. Like most people, Sulma DeLeon was shaken when she received such a letter. Her first response was to contact the sender and ask what this was all about.

Related: Santa Clarita Realtor Fighting For Family Of 5 Being Forced Out Of Home By FCI

The servicer told her they represent a company that bought her delinquent second mortgage. She replied by saying she doesn’t have a second mortgage. She had previously borrowed $39,000, but it was dismissed when she did a loan modification several years earlier. She had been making her payments on the first mortgage, and she remembered getting a letter telling her that her second loan was being “charged off” and “no further payments would be required.” She thought the matter was settled. But as we now know, it was not.

So, after checking the title and finding the still enforceable second lien, on September 13, 2017, we initialed a loan modification for Mrs. DeLeon with the now “zombie” second. After a month of back and forth over documents that the servicer said were not sent, but we could prove were, we finally learned that the company behind them — the investor — was West Coast Capital Group, a small but curiously well-funded operation out of a tiny office in Huntington Beach.

We spoke to a man named Marcel Weise. He had a very interesting attitude similar to that of a mob enforcer being sent to collect the vig from unfortunate gamblers. He represented himself as the one and only person to talk to. He had many less-than-helpful suggestions, like on November 16, 2017 when he suggested our client go ask their church for money, because a lot of investors were getting money from church people lately. Or on April 3, 2018 when he suggested our client “sell a body part, or just rent one out.” He never said it directly, but he left me with the impression he thought our client — an elderly woman with health issues — should resort to prostitution. He made other similar suggestions, but those two stood out.

In any case, on April 5, 2018, despite our attempts to negotiate a settlement that would keep Mrs. DeLeon in her home, we became aware West Coast Capital Group filed a foreclosure Notice of Sale and we again contacted Mr. Weise. We had already offered to do a loan modification in which Mrs. DeLeon would start making payments immediately to avoid the foreclosure. We were denied by Mr. Weise, who said that unless the borrower stopped making “ridiculous offers” and he got money up front, he wasn’t willing to consider anything. I thought offering to immediately start making payments on a $39,000 debt the borrower didn’t know still existed and had sat undisturbed for years was a serious offer. But not to Mr. Weise.  

Related: Santa Clarita Realtor Believes ‘Zombie’ Second Mortgage Crisis Has Reached Epidemic Levels (VIDEO)

So, we asked about doing a short sale, and Mr. Weise demanded money up front to consider it. When we told him Mrs. DeLeon doesn’t have money to give him “up front,” he again became combative and suggested her best option was to give him the keys to the house and maybe they would “give her a couple of bucks to leave.” After over 15 years in her home, Mr. Weise would give Mrs. DeLeon a few bucks to leave. Can you imagine what it’s like to have someone tell you that, or treat you like that?

We again tried to initiate a short sale and Mr. Weise again refused to consider it, repeating his demand of money up front to even think about it.

With no other option, on May 5, 2018, Mrs. DeLeon filed a bankruptcy. During the bankruptcy’s initial opening period, many offers were sent to West Coast Capital Group only to have them refused because they were now insisting on the total amount owed, now nearly $100,000, or they would contest the bankruptcy and take her home. And because Mrs. DeLeon doesn’t have nearly $100,000 to give West Coast Capital Group, that is exactly what they did.

Despite the bankruptcy judge trying to find a way to allow Mrs. DeLeon to stay in her home because Mrs. DeLeon owed slightly less than the home was worth on her first mortgage, the law does not provide a protection against the likes of Mr. Weise and West Coast Capital Group. In effect, Mr. Weise and his ilk have found a way to legalize the theft of Mrs. DeLeon’s home.

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As West Coast Capital Group was close to prevailing in the bankruptcy court, and because Mrs. DeLeon had had enough, she offered to give West Coast Capital Group the keys and be done with it. They first agreed to give Mrs. DeLeon $5,000 to leave, only to later rescind their offer because, as Mr. Weise put it, “it wasn’t in writing” and because Mr. Weise felt it might be better to complete the now uncontested foreclosure first, and then they “might give Mrs. DeLeon some money to leave.”

As Mr. Weise had behaved so poorly and had lied so often, Mrs. DeLeon was not willing to give them the keys and then see if they were willing to give her money to leave. As I explained to Mr. Weise, “I will gladly pay you Tuesday for a hamburger today,” is not a viable business practice.

All during this process, we repeatedly explained to Mr. Weise that the house was only worth a tiny bit more than was owed on the first mortgage on the property. West Coast Capital Group had no hope of selling it for more after a foreclosure. In short, they would never get the $93,562 they were now demanding. Even the appraisal in the bankruptcy showed this to be true.

But none of this mattered to Mr. Weise. He was determined to take Mrs. DeLeon’s house. He convinced himself, despite all the evidence, that the property was worth over $300,000. All of the appraisals, comparable sales and other evidence showed it was only worth $220,000. But Mr. Weise would not be swayed.

Related: Santa Clarita Realtor Empowers Homeowners Facing Foreclosure With Free Defense Services

So, despite multiple appeals, math and even a bankruptcy, on September 9, 2018, West Coast Capital Group foreclosed on Mrs. DeLeon’s home.

Just to add insult to injury, Mr. Weise called a few days after the foreclosure — completely oblivious to the situation he himself caused — to ask if Mrs. DeLeon would like to rent her home back. She could now start sending Mr. Weise money to stay in her home as a renter after they stole it out from under her! Almost unbelievably, he presented this as if he was doing Mrs. DeLeon a favor. She has not yet answered, but I am sure she will decline. Wouldn’t you?

In my conversations with Mr. Weise after the foreclosure, he had completely forgotten who I was or who Mrs. DeLeon was, and he let slip some very interesting information: West Coast Capital Group bought the loan with a face value of $39,000 and an accrued interest value of $93,000 for $35,000.

When I asked why they refused multiple offers of settlement, payment plans and other remedies when they had no hope of getting money out of the property due to its market value, his response was very telling. He said, “Whoops, I guess we overpaid for this one.”

He took an elderly woman’s home because he made a mistake. He ignored all of our attempts to stop the process and save Mrs. DeLeon’s home because he made a “whoops.” This is little comfort for Mrs. DeLeon. I’m also sure, given his attitude, they have had many “whoops” files that gained them no profit and forced families onto the street — but “whoops” is his response?

And because this story just keeps getting worse, I received a call this week from another investor who was contacted by West Coast Capital Group, and that new investor told me West Coast Capital Group offered to sell him the now foreclosed loan and title to the house for $20,000. This is interesting because Mrs. DeLeon had previously offered an amount higher than that, and Mr. Weise had summarily dismissed her offer as “not serious.”

So now Mr. Weise and West Coast Capital Group have a loan they cannot service and a foreclosure they will have a difficult time selling on a home that has no more value today than it did when they first demanded over $93,000 from Mrs. DeLeon. But Mrs. DeLeon has no home and no hope of buying another in her lifetime. All because Mr. Weise and West Coast Capital Group made a “whoops.”

This insanity must stop. Good people are losing their homes because of these zombie seconds. My staff and I fight every day to save homeowners from Mrs. DeLeon’s fate. I have yet to hear a single politician or government regulator say anything about these loans and the growing list of people who have suffered from them. You could be next!

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

Ed. Note: West Coast Capital Group did not return a request for comment made by KHTS as of the publication of this story. 

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