Salem man 'shames the banks'

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July 28, 2010

By Tom Dalton Staff writer The Salem News Wed Jul 28, 2010, 12:01 AM EDT

SALEM — When President Obama signed the sweeping financial reform bill last week, Richard Zombeck was watching.

Zombeck, 46, has been following the American economy closely since buying a house in Salem in 2006. What should have been a happy event for the technical writer and his wife, who were buying their first house, turned into a nightmare when they took on a toxic mortgage and joined the millions trapped in the housing crisis.

In a complicated mortgage deal, they financed all $360,000 of their home purchase, were left with no equity and watched the market crumble under them.

"We had money to put down," Zombeck said, "and every single one of the lenders said, 'Why would you do that when you can finance it for 100 percent?'"

One potential lender was eerily prophetic.

"One guy said, 'Rich, the only thing that's going to (mess) this up is if the housing market and economy crash at the same time, and that's never going to happen.'"

The Zombecks have held onto their house but have engaged in a long battle with a loan servicer, paid extra charges in the process and now owe more than the original mortgage.

But this is where the story takes an unexpected twist.

Unlike most victims, Zombeck, a freelance Web and blog designer, fought back.

He became a blogger, mostly on the housing crisis and the need for financial reform, on The Huffington Post, an Internet newspaper.

In March, he launched a website, ShameTheBanks.org, which became a vehicle for individuals across the country to tell their own horror stories, check out the latest housing-related news, and link to government and other housing information sites.

The website gained notoriety in April when Zombeck made a trip to Washington, D.C., as part of a national group called "Americans for Financial Reform." With members of a small state delegation organized by MASSPIRG, a consumer advocacy group, he visited the offices of Massachusetts senators John Kerry and Scott Brown.

Almost by chance, he had a brief one-on-one with Austan Goolsbee, chief economist on the president's Economic Recovery Advisory Board.

"To a geek like me, that was better than partying with the Beatles and Led Zeppelin," he said.

Zombeck, it turned out, was a key member of the small state group.

"We reached out to Richard just because he had been such an activist," said Lizzi Weyant, the staff attorney for MASSPIRG. "His site had really been gaining a lot of attention because he was one of the few people who was collecting stories from homeowners."

Shortly after the visit, Zombeck starting getting e-mails from people across the country whose congressmen had suddenly contacted them after reading their stories on ShameTheBanks.

Zombeck's website was getting noticed in high places.

"I don't think he set out to accomplish what he did," Weyant said, "but he really did an amazing thing."

Zombeck doesn't know what effect his website may have had on the national debate, but he feels some satisfaction in giving homeowners a voice. His real hope, he said, is that he gets "to take the site down someday."

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