Army veteran, entrepreneur may lose Henderson home

In the photograph, then-U.S. Army Staff Sgt. Jose Perez launches an anti-tank missile from his shoulder.

The time and place for that action might surprise some people, Perez says as he sits with his wife, Edna, in the backyard of his Henderson home.

"That was the late '80s in Afghanistan," he said last week. "I was part of the American force secretly training the mujahadeen (Islamic warriors) to fight against the Soviets."

Though historians have credited President Ronald Reagan's covert support of the mujahadeen for the 1988 Soviet pullout from Afghanistan, Perez, 51, said today he can't help but be concerned about how the training of Afghans is now being used.

He has read and seen media accounts of how men who had formerly fought as U.S.-backed mujahadeen are now fighting for the Taliban against the United States.

"The longer I live, the stranger life becomes. There are so many twists and turns that you don't expect," said Perez, who also was part of the security force when the United States invaded Panama in 1989 to oust dictator Manuel Noriega.

The 11-year Army veteran never thought he would be in the situation he finds himself today, facing foreclosure on the house he purchased in 2003.

"I've always worked hard," Perez said. "I never dreamed I wouldn't be able to pay my bills."

Perez figured he was on a roll when he bought the four-bedroom, two-story 2,500-square-foot home in the Cinnamon Ridge subdivision for around $230,000. He was making more than $50,000 a year as a service technician for Smith's Foods, his wife contributed about $1,000 a month working in food service for the Clark County School District, and he had almost no debt.

Just his wife's check alone would practically cover the mortgage payment.

The five-year adjustable rate VA mortgage that began at 4.5 percent would rise to 7 percent, but Perez didn't see that as a problem.

"I was doing great at Smith's and figured I'd move up," he said.

About a year after they moved into the home where they finished raising a son and daughter and two nephews, Perez took a higher-paying job with Hobart, servicing the commercial food equipment firm's products in the Las Vegas Valley at nearly $70,000 a year.

Even after he was laid off from Hobart in 2007, it just seemed like a momentary problem.

He had a high credit score, so he could easily take out a $68,000 second mortgage to start his own one-man business, JP&E Mobile Equipment Specialists, which services restaurant, bakery and meat-butchering equipment.

It wasn't long before he was making $12,000 a month.

"It just seemed like our lives would always work out," Jose Perez said. "Edna was my childhood sweetheart, and she was born on the same date I was, though she's a year younger. It just seemed like a good life was meant to be."

But last year, when the economy really started to crater, Perez said he started "to stress."

Clients put off servicing their equipment. His income was cut in half. Still, he was confident he could weather the recession by cutting back on expenses at home.

His wife, who was still working for the school district, stepped up her sales of Tupperware, bringing in another $350 a month.

Things weren't great, but they felt "blessed" that they weren't as hard hit as other families.

In March, however, when Jose Perez's business had a hard time bringing in $3,500 a month, they knew they were in real trouble. Losing the house became a possibility. Sleep hasn't come easy.

They no longer could make the mortgage payment, which had climbed to almost $1,800 a month, and still run a business and stay up on the other payments of daily life, including almost $800 a month for a truck and car that was needed for work.

Perez called his mortgage company, MVB Mortgage Corp., a Michigan-based firm, and asked if they could get a loan modification. Lowering the interest rate to the VA interest rate of less than 6 percent would allow him to make the payments, he said.

"I had understood that the president and Congress wanted mortgage firms to work with people so they could stay in their houses," Perez said. "But the mortgage company doesn't seem to want that at all."

Perez said the firm's representatives told him that because his family's monthly expenses, including the mortgage payment, were exceeding net income, they wouldn't work on a loan modification. He said they told him he needed to make at least $6,000 a month.

Initially, Perez thought that MVB might not be willing to negotiate because the VA offers what is known as a "government-guaranteed loan."

In other words, he thought that if he or another veteran defaulted on a VA loan, the lender would still be guaranteed all of the loan amount from the government. But Mike Frueh, assistant director of the Department of Veteran Affairs' Loan Guaranty Service in Washington, D.C., said the VA only guarantees 25 percent of the loan amount.

"That certainly doesn't absolve a lender from a loss," Frueh said.

He said the VA actually pays lenders a $500 fee if they can work out a loan modification.

"We hate for any veteran to lose his home," Frueh said, adding that VA counselors will talk to mortgage firms on behalf of borrowers who have VA loans.

Upset that the mortgage firm appeared to dismiss the chance of a loan modification, Perez hired local attorney Jacob Hafter to represent him.

"We believe that this drives right at the heart of the problem that thousands of homeowners face in dealing with lenders across the country," Hafter said.

"The lender has so far been unable to realize that reducing the mortgage payment will result in the homeowner's ability to not only pay the mortgage, but also to stay current on their other bills as well. A hundred or two hundred dollars less a month can mean staying out of financial ruin."

Now seven months behind on payments, which comes to more than $16,000 when late fees are included, Perez thinks the mortgage firm could easily tack the months he owes on the back end of his loan, in addition to giving him the current 5.75 percent VA rate on a 30-year-loan.

"Why would it be better to put my house on the market now when you can't even get half of what I paid for it?" he said. "It makes no sense. How is that better for the mortgage company or the country?"

Hafter said every time his office calls MVB representatives, "we are told they have no interest in working with us."

Pam Groosbeck, the servicing manager on Perez's loan with MVB, did confirm that up to now the only thing the mortgage firm has offered the couple is either to pay the arrears in full or get a deed in lieu of foreclosure, where they would move out of the home and hand over the keys to the mortgage company.

While sparing the borrower and lender much of the fees of foreclosure, a deed in lieu of foreclosure is still a huge hit to a borrower's credit score.

"Basically, they're still talking about financial ruin for a man who had never been behind on anything until the economy went bad," Hafter said. "He's still making money; and when the economy is back, he'll have no trouble at all."

Groosbeck said her company would be glad to work on a loan modification as soon as the Perez family shows more financial stability.

That may come in a way the Perezes didn't expect.

A year ago, before they ran into serious economic trouble, they had applied to become foster parents with Maple Star Foster Care in Las Vegas.

"We prayed on it a lot," Edna Perez said. "We had empty bedrooms, and our house was too quiet.

"We love kids and we thought that we could help kids by giving them a good life in a nice house. Children need love."

On their shared birthday, Aug. 31, the Perezes were notified that they had been accepted for training as foster parents. Their foster parenting classes are scheduled to begin in October.

As many as three school-aged children could be placed with them in November, for which they would be paid around $3,000 a month. That would be enough, according to Groosbeck, to qualify for a loan modification.

Edna Perez said she gets off work at the school district a little after 1 p.m., "so it could work out perfectly."

Even if a loan modification is not made and they lose their house, the Perezes say they will become foster parents.

"We make enough to rent a nice home," Jose Perez said. "There are a lot of people worse off than we are. I've just recently got four new clients, so my business is picking up again. If God wants us to have this house, we'll have it. Right now, it seems like God wants us to help some kids. And we're ready."

Contact reporter Paul Harasim at pharasim@reviewjournal.com or 702-387-2908.