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Foreclosed Homeowners Break Into Former Home

There's been a lot of funny business in the mortgage industry. It's getting less funny by the minute.

Justin Sullivan | Getty Images

Danielle and Jim Earl admit they skipped mortgage payments, filed for bankruptcy, and lost their home. But they broke back into the house last week after changing the locks.

"How can you trespass on your own home?" asks Danielle Earl inside the 4,000 square foot house in Simi Valley, California, where she and her stay-at-home husband, Jim, live with their nine children (six of them adopted).

The Earls are the new face of the mortgage crisis.

They admit having money troubles in the past, including bankruptcies. Danielle Earl reportedly co-owns a medical equipment company, and she says times were tight in 2006, so they skipped some mortgage payments. Earl says they eventually caught up, paying more than $100,000, only to receive a notice of default. The home was foreclosed on earlier this year and sold to an investor group, Conejo Capital. The Earls were evicted.

The investors sold the home, but before the new owner could move in, the Earls had the locks changed and moved back in themselves. "Why should we lay down?" she says her husband asked her. "We need to fight back." She began researching the history of their mortgage and the title to the property. Names began popping up that she says she'd never heard of, documents allegedly appeared forged. "The company that we had been paying all this money to, that we felt our money was stolen from us, was actually not legitimately our mortgage company." If no one can prove who owns the home, the Earls argue, it's still theirs.

So far, they haven't convinced a judge. The Earls have been ordered to move out a week from today, but their attorney, Michael Pines, says they may move back in, saying they can legally do that since the judge didn't issue a permanent injunction. He's reportedly helped other Southern California families break back into their old homes, and Pines claims that mortgage securitization calls into question every commercial and residential loan going back decades.

So what now? "If the sheriff shows up and tells us to leave we're going to leave," Danielle Earl says, "but that doesn't mean our fight is over."

Here is Danielle Earl explaining how she tried to catch up on mortgage payments.

Here Danielle Earl explains why her family moved back into the house.

Here is attorney Michael Pines making grave predictions about the unfolding legal mess.

Questions? Comments? Funny Stories? Email funnybusiness@cnbc.com

  • Based in Los Angeles, Jane Wells is a CNBC business news reporter and also writes the Funny Business blog for CNBC.com.

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