Rare foreclosure success story: Long Beach farmer navigates loan-modification labyrinth

Larkin Stentz of Long Beach recently completed a long and arduous process of renegotiating a real estate loan on his small farm and emerging from the mortgage foreclosure process. Stentz grows and sells organic produce, and rents rooms at his farm to help generate additional cash income.

It’s taken four years, pages on pages of documents and upward of 20 “relationship managers” between two financial institutions, but Larkin Stentz has managed to buck the threat of foreclosure that has hovered over his Long Beach Peninsula farm, Green Angel Gardens, since 2011.

Before the recession, Stentz ran a successful landscaping business, but, in 2008, business dried up.

Months passed without a call for work, cutting off the revenue he’d relied on. Over the next three years he began selling off his landscaping equipment to offset the revenue loss, he said. Then, in 2009, he filed bankruptcy and finally, in 2011, he stopped making his mortgage payments.

What would unfold over the next four years would be a nearly nonstop effort to keep his farm — and his home — from falling into a bank’s hands.

It wasn’t easy.

“I have been frustrated and I have woken up in the morning going ‘What am I going to do?’” he said.

Throughout 2011, Stentz attempted to work with Bank of America, the holder of his first mortgage, to modify his loan terms. That process, he said, was a nightmare.

Stentz ran his farm as a sole proprietorship, which meant the bank required profit and loss statements in order to move forward with the modification.

He didn’t qualify, they told him. And during a phone call with a bank representative, he learned the bank wouldn’t work with him to reduce either the interest rate or the principle, he said. That led to the next step — mediation.

He managed to stave off a foreclosure on his second mortgage during the same year with a community fundraiser. Negotiating a modification on his first loan proved far more difficult.

In the month leading up to his mediation meeting for his first mortgage, he researched the documentation on his loan and found that Bank of America didn’t have the right to represent the loan, he said.

When he brought that fact up during his mediation meeting in July 2012, it earned him a sharp end to the conversation with the bank representative, he said.

Following that meeting, however, months passed without communication from the bank. In September 2012, he was contacted by Select Portfolio Servicing, a company that bought mortgages, including Stentz’s, and the rightful loan representative.

Over the next year and a half Stentz would continue to negotiate a modification, making rounds with the another dozen lender representatives and sending file after file of documents.

Throughout the process, Stentz continued putting together weekly boxes of produce from his farm and selling them to locals as part of his Community Supported Agriculture program. He also hosted participants of World Wide Opportunities on Organic Farms, a program linking volunteers with organic farms.

In March 2014, a month before the farm was to be foreclosed on, Stentz said he learned that because his land was a farm, the traditional foreclosure process did not apply. Instead, the bank was required to move forward with a judicial foreclosure.

It was then that he began working with Ariel Speser, a staff attorney at the NorthWest Justice Project Foreclosure Prevention Unit. The organization provides no-charge legal aid to qualifying low-income clients.

The fact that Stentz’s home was also his livelihood lent some extra urgency to his cause, and Speser tried to convey that through the documents she sent to the banks, she said.

One of the hurdles they faced was the fact that the seasonal nature of income on a farm made profit and loss statements difficult to organize, she said.

Eventually, she and Stentz were able to convey to the banks that, even though his income fluctuated seasonally, he would be able to make his mortgage payments, she said.

With Speser’s help, Stentz received a modification offer from the bank, but not one as favorable as it could be, Speser said, so they appealed the offer in hopes of a better modification.

Their appeal was successful, and, after a three-month trial period, Stentz made his final $600 payment in September, he said. Now Stentz is in a good place financially, Speser said.

To prevent any financial issues in the future, he has plans to continue his work with CSA and has begun renting out spare rooms in his farm house, he said.

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