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Making money out of misery

David Trott, 53, owns and runs a business that you won’t want to deal with.

Trott’s business, Farmington Hills-based Trott & Trott, which he inherited from his father, Robert Trott, is the biggest foreclosure law firm in the state and one of the largest in the U.S.

When the Great Recession began in 2008, it was a perfect storm for millions of American homeowners. Many had been the victims of predatory lending by banks and mortgage lenders, saddled with subprime mortgages designed to become unaffordable. With unemployment skyrocketing, others lost their jobs and became unable to meet their mortgage payments. Selling houses in such situations wasn’t viable, because the housing bubble burst and prices plummeted, leaving millions of people underwater in their mortgages, owing more for their houses than they were now worth.

Representing banks and mortgage lenders, Trott & Trott cashed in big time on other people’s misery, handling some 80,000 foreclosures in 2009 alone, thereby earning Trott the nickname of “the Foreclosure King.” Under the circumstances, foreclosure should have been the last resort, with people allowed to keep their homes through loan modification under the federal Home Affordable Mortgage Program (HAMP).

But for Trott and his predatory clients, foreclosure was the first resort, with Trott admitting that his firm makes more money from a foreclosure than a loan modification. Taking no prisoners, loan modifications under HAMP were frequently rejected by Trott’s clients on the basis of lies and meaningless technicalities, violating federal law, with Trott and his firm doing nothing to see that their clients complied with the law.

In Detroit, these foreclosures produced thousands of vacant houses, adding to an already serious blight problem. When homeowners were able to get loan modifications, it only came after an expensive, time-consuming, stressful and often aggravating process.

But Trott didn’t handle any of these foreclosure cases personally, delegating the dirty work to the 74 lawyers in his firm. In corporate CEO fashion, he takes a private elevator to his executive offices and has little contact with his employees.

Practicing a form of vertical integration, Trott bought into or started companies to handle every stage of the foreclosure process. These companies have included the Attorneys, Greco, Seaver, Talon, Bankers and Warranty title companies for title searches; NDeX for foreclosure paperwork processing; NetDirector LLC for foreclosure file processing software services; Detroit Legal News for publishing foreclosure notices; Gillis Trott Appraisal for property appraisals; Trott Recovery Services for debt collection; and the Coldwell Banker Weir Manuel real estate firm for selling foreclosed houses.

While Trott has played a major role in thousands of people losing their homes, he and his family live in a $2.5 million Birmingham mansion. For getaways up north, there’s a $2 million vacation home in Harbor Springs.

Ever the plutocrat, Trott is a right wing Republican who has been a major behind the scenes player in the Oakland County party for years. Since 1999, he has donated more than $700,000 to Republican candidates. His only previous run for office was a losing race for Oakland Community College trustee in 2012.

Now Trott wants to buy himself a seat in Congress, challenging 11th District Rep. Kerry Bentivolio (R-Milford) in the Aug. 5 primary. Bentivolio, a Tea Party extremist, is an accidental congressman, having been elected in 2012 after former Rep. Thaddeus McCotter (R-Livonia) was kicked off the primary ballot due to fraudulent nominating petition signatures. The Oakland County Republican Party establishment has no use for Bentivolio and enthusiastically supports Trott.

Trott has more than enough money to spare for the campaign. According to financial disclosure forms submitted when he filed for the seat in November, his net worth ranges from $60.2 to $204.9 million. As of March 31, Trott has raised $1,686,420, with almost half, $808,402, coming out of his own pocket. None of the other candidates for the seat are self-financed. Bentivolio has raised $448,441.

While the 11th District was designed to elect a Republican, it is by no means a safe seat for the party. Bentivolio won in 2012 by an unimpressive 51 to 44 percent margin over the Democratic candidate, Syed Taj, a physician and Canton Township trustee.

Given the weaknesses of both Bentivolio and Trott, the Michigan Democratic Party has targeted the 11th District, with four candidates in the primary. Anil Kumar, a Bloomfield Township physician, has raised $626,624, more than Bentivolio. Bobby McKenzie, a former State Department counterterrorism expert from Canton Township, has raised $239,861. Nancy Skinner, a radio and television commentator from Birmingham, gave former Rep. Joe Knollenberg (R-Bloomfield Hills) a close race in 2006. A late entry, she hasn’t filed a financial report. The fourth candidate, Livonia resident Bill Roberts, is a follower of conspiracy theorist Lyndon LaRouche who lost the 2012 primary to Taj.

Will Trott even get past the Republican primary? Could the seat change partisan hands on Nov. 4? Stay tuned.