‘OREGON TALE’ Chapter III
The Kind Of Place You Don’t Want To Lose
BY CHRIS FARAONE
After zigzagging south out of Grants Pass and hugging hilly roads for 20 minutes, I snap west and head toward the site of the eviction on Slate Creek a month earlier. The sweeping canopy of the Siskiyou wilderness grows thicker, the air thinner as I arrive in Wilderville, an unincorporated community comprising a post office and a general store on the rocky rim of Josephine County.
Tom Roach and Melinda Starba have stayed with their neighbors since the SWAT raid on their Wilderville home, which is a short ride from where the Redwood Highway passes on its squirm to the coast. The natural beauty is arresting, and as I approach my destination I climb, and climb, and climb until my truck reaches a steel gate with three separate “No Trespassing” warnings.
Tom is standing there waiting with a smile under the curved brim of his baseball cap. He appears to be in positive spirits, and enthusiastically shows me where to park. I hop out; we shake hands. Tom points to one of the bright yellow “No Trespassing” signs: “So, do you think people get the message?” It’s a joke, but he says there really has been some suspicious movement in the woods in the past month that may be related to the spat over his land.
With cold beers for us both, Tom leads me to the edge of the contested property. He’s not legally allowed to step any farther, but we’re close enough to see the boarded-up bungalow that he called home for 24 years. I ask what went wrong, and he loops me all the way to the beginning of the story. Tom relocated out west in 1984 after growing up in New York City. A builder and construction supervisor, he says there was steady work in his native Queens, but that he ultimately grew tired of the crime. He has returned only five times in three decades, for major family events and funerals.
After six years in Southern California, where Tom met Melinda, the couple migrated to Southwest Oregon, eventually settling in a small cottage on Slate Creek surrounded by 60 upland acres, all off the electrical grid abutting the Rogue River-Siskiyou National Forest. For income, while Melinda managed a busy optometrist’s office, Tom continued working small construction gigs, did some drywall, and later on perfected a bathtub remedy to manage poison oak burns he suffered chopping wood. To this day he makes and packages small batches of his own glycerin-based miracle soap and sells the product to local stores.
Looking up from the dirt road outside the neighbor’s house where he’s staying, Tom points to the remnants of his life in the woods with Melinda and his son, my friend who alerted me to their predicament. Their former pets are buried in the mountainside. There’s a wooden bridge over the creek that Tom helped build, and a rusted shed full of tires from old cars, more than a dozen of which he purged over the years since the owners who preceded them left the land strewn with auto carcasses.
After I’ve spent less than half an hour with Tom, we begin talking about the fraud to which he and Melinda appear to have fallen victim. From a racketeering operation compromising their initial loan, to the suspect search warrant that a SWAT team used to evict them, their plight reads like the Greatest Hits of American Mortgage Scams. Tom lets a couple curses fly about those who covet his home, but he’s more or less an easygoing guy, fitting for his gentle voice and thin frame. With traces of a New York accent lingering, he takes a deep breath, stretches both arms toward the sky, and exhales over the sound of water splashing through the creekbed:
“This is the most beautiful place I’ve ever known … It’s the kind of place you don’t want to lose.”
For their tiny clapboard cottage and the 60 acres around it, in 1990 Tom and Melinda paid $75,000, putting $20,000 down and borrowing the rest from a private Oregon-based trust. For the following eight years they paid monthly installments of about $500, and say they fulfilled their contractual commitments. Records on file in Josephine County support their claim that difficulties only arose when a Pandora’s Box of loan impropriety exploded after 20 years of residency.
After collecting monthly checks from Tom and Melinda for nearly a decade, in 1999 the holder of their original $55,000 trust deed, real estate securities broker Dennis Lloyd, pleaded guilty to racketeering and fraud, a Class A felony, in Oregon state court. As a stipulation of the plea, Lloyd was ordered to never again “be employed by or seek employment as a mortgage lender.” Though the guilty party was fined $750,000 for acting with “fraud and deceit” in transactions around Josephine, the Roach land was not netted in the investigation. That despite Lloyd and others having apparently shuffled the Slate Creek holding between multiple owners and trusts in a pyramidal fashion similar to that which landed him in court.
By the time Lloyd was banned from the business, records show he’d moved the deed for Melinda and Tom’s home to a mortgage house named Associates Financial Services Company of Oregon. According to correspondence obtained by an investigator doing volunteer advocacy work for Tom and Melinda, the property on Slate Creek was then drained of equity repeatedly and subsequently paid off, over and over, as if funds were being laundered through the home. That same investigator, a New England-based forensic mortgage fraud examiner named Susan Decker, has uncovered more than 500 pages of documents detailing suspicious practices targeting the couple.
I’ve seen a lot of sleaze in my decade of reporting on mortgage schemes, foreclosures, and evictions, but this particular tale of Wild Western lending appears to be deeper and more depraved than most others. And that’s before Tom and Melinda were evicted by a SWAT team.
By 1998, per documents obtained by Decker, Melinda and Tom’s property had been illegally mortgaged several times then paid in full. In one case, $33,000 was borrowed in Tom’s name, then covered in under a year. In another instance, it appears Associates Financial processed further such transactions including one for nearly $67,000. According to records, at one point monthly payments in Tom’s name totaled more than $14,000.
Tom says he authorized nothing and had zero knowledge of the shell game. In regard to paperwork, he assumes his signature was lifted from the back of a teaser check he received from Associates Financial for $2,500 in 1998. Records show he accepted the loan and returned the whole sum in months. Meanwhile, it appears the company was lending itself much larger amounts, presumably to cash in on handsome fees and interest rates of more than 10 percent. In 1999, records show more loans were made against the property; unlike previous unauthorized deals in Melinda and Tom’s names however, these were never paid back, leaving them on the hook for deeds they say they never signed.
Associates Financial is no longer in business. The company once operated as a subsidiary of Associates First Capital Corporation, which in 2000 was acquired by Citi for roughly $31 billion. At the time, Melinda and Tom say they believed their checks were going toward buying the home they found as a refuge from SoCal and New York. In reality, their paperwork ricocheted between companies like a predatory dodge ball, their land seemingly stolen from them again and again.
Reached by email, a spokesperson from Citi wrote, “Due to legal privacy restrictions … the company cannot comment on customer issues without their express permission. In this case, we will decline comment.” In other news, last year Citi paid $7 billion in fines and settlements related to mortgage shenanigans, bringing the company’s penance for helping fuel the housing crisis to nearly $12 billion. Some of that money, including a $4 billion civil penalty that is the largest of its sort in history, has gone to securing homes for displaced families. Not Tom and Melinda though. Their case only worsened.
Records show that Tom and Melinda made monthly payments on their home of up to $730 until November 2010. For Citi though, it was not enough that they had paid back multiples of the principal value of their original mortgage by that point. In 2010, the lender contacted Tom and Melinda by mail requesting they make future payments through another bank. Due to confusion over this change, the borrowers claim they soon after found themselves in the throes of foreclosure, at the mercy of numerous loan servicers making claims on their property.
By the end of 2011, Tom and Melinda saw no choice but to seek help in the form of a loan modification from Citi, which brought on a company called Northwest Trustee Services to process the mortgage. Northwest has serviced tens of thousands of foreclosures in three Pacific states, and has been sued more than 100 times in federal court for its seemingly sinister practices. In their dealings, Tom and Melinda argue they too were taken advantage of, and say they were coerced into submitting documents that subsequently buried them in debt. In 2012, Citi and Northwest moved to foreclose.
Borrowing money from a family member, Tom gave a $78,000 cashier’s check to his lawyer to buy the 60 acres outright. He was too late. Despite the couple’s initial down payment and monthly checks, their attorney informed Tom that Northwest wanted more than $90,000 due to added fees. Tom and Melinda believe their lawyer acted in bad faith by depositing their money in an escrow account for 30 days, effectively tanking the deal. While they thought they were still negotiating with lenders, in August 2012 Citi and Northwest moved to evict them from the house — even though a county judge had stayed the eviction until September. The couple says they weren’t made to leave, and that they locked the gate behind the sheriff’s deputy as all parties waved goodbye. In any case, when all was said and done the property sold to a local real estate investor for $80,000 in July 2013.
On the belief that their land had been unlawfully stolen from them, Tom and Melinda stayed put after the 2012 eviction and kept fighting in court. In time they began to receive help from Decker, the Massachusetts mortgage examiner. The Josephine County Sheriff’s Office did not respond to inquiries for this story, but Decker says that she communicated with Sheriff Gil Gilbertson after he found her through a former New Hampshire sheriff named Christopher Conley, who had started a task force in his state for investigating mortgage fraud and racketeering. Conley recommended Decker, who was helping train his unit, to examine the Wilderville case. Gilbertson asked for any evidence he needed to stop a wrongful eviction and arrest; but despite presenting him with the detailed evidence presented herein, Decker was unable to avert a second eviction. In the wake of local law enforcement’s reluctance to interfere, Conley, all the way in New Hampshire, nonetheless wrote an affidavit noting the depth of Decker’s findings. His statement attests:
It is most probable, based upon the inquiries and facts presented, that Sheriff Gilbertson’s concerns were warranted and there are multiple levels of embedded fraud and purposeful wrongdoing by specific persons.
If the whole ordeal over the past several years was a drama, the raid on Slate Creek in April of last year was a fitting encore spectacle. In addition to the terrifying visual aspect — an armored all-terrain tank plus camouflaged SWAT team members with machine guns — details of the warrant seemed sketchy, from the odd presentation of signatures, and certain omissions, to the fact that snipers arrived before the deputies who served the documents.
Authorities, according to Tom and Melinda, had taken extra special interest in removing them. This in spite of funding cuts that left the sheriff often unable to answer distress calls in remote corners like Wilderville. In order to help determine whether Josephine County pursued an erroneous eviction, Decker tapped Gary Michaels, a Colorado-based forensic document examiner with more than 50 years of experience, to scrutinize the paperwork. After spending three to four hours a day for two weeks poring over the warrant, Michaels reported his conclusion:
The submitted documents for examination were found to be non-genuine and are original individual counterfeit creations in conjunction with the application of photocopying and electronic software manipulation resulting in an overall finding and conclusion that the documents are all counterfeit forgery.
“I went through these extensively,” says Michaels, whose complete analysis is 35 pages in length. He notes the fakes are fairly well-executed, possibly the work of someone with experience in forgery. “These are absolutely counterfeit. They look like the originals, but they are absolutely counterfeit.”
NEXT: Tom Roach and Melinda Starba are hardly the first residents of Southwest Oregon to have their land taken by force. Before moving forward, a look at the past two centuries in Josephine, from Native Americans to Forty-Niners.
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