Four Year Old Foreclosure .. Oops, Wrong Bank
“Equity imperatively demands of suitors in its courts fair dealing and righteous conduct with reference to the matters concerning which they seek relief. He who has acted in bad faith, resorted to trickery and deception, or been guilty of fraud, injustice, or unfairness will appeal in vain to a court of conscience, even though in his wrongdoing he may have kept himself strictly ‘within the law.’” Epstein v. Epstein, 915 So.2d 1272 (FL 4DCA, 2005), emphasis added.
I’ve written several times about my own foreclosure. I purchased a house with a girlfriend, the idea being it would appreciate then she would refinance and pay me back the $75K I brought to closing.
First, let me say to readers, friends .. this is an awful idea. I’d say don’t try it at home, but it’s more accurate to say don’t try it on a home. :)
Predictably, we quickly split up and I eventually purchased my own house, that I’ve since paid for.
My ex-girlfriend still lives in the other and soon after we split I asked the “bank” — knowing then virtually nothing about the mortgage industry — what to do. ”Stop paying for three months then you can short sell it,” they answered. ”This is a full-doc loan with a substantial down-payment, no second, in an area with rapidly decreasing value; a short sale should be easy.”
I followed their advice, even going so far to paint, improve landscaping, and pretend I really was selling a house rather than mitigating a breach. That worked well because I received two short-sale offers, both above generally acceptable values. One was for cash and the other a 50% down-payment on a pre-approved loan.
Both legally binding offers had clear, unambiguous deadlines, and I was asking the bank for no concessions other than to close the deal. That is, I was attempting to mitigate a breach in good faith. This wasn’t a strategic default, though I do not see anything wrong with strategic defaults; this was “owning” a house with an ex-girlfriend and reasonably desiring not to.
My “bank,” perennial bad-boy Aurora Loan Services — who had “purchased the loan” from the originating “bank,” GMAC not long before — accepted the offers months later, after they’d expired and after the value of the house plunged. Needless to say, those buyers were long gone.
While Aurora was extremely slow to mitigate the breach they’d induced they were extremely fast to hire fraudster David J. Stern to file a foreclosure.
I honestly find many foreclosure stories boring, and a little sad, so I’ll cut to the end: the latest law firm — the formerly venerable Broad & Cassel — filed their third amended complaint, and an umpteenth copy of the note; that is, the loan. It is clearly and unambiguously endorsed to Deutsche Bank, who is named nowhere in the lawsuit.
Deutsche Bank, the owner of the loan, appears nowhere in the foreclosure except on the note itself. Assuming Stern didn’t forge the note — which, for Stern, is admittedly a big assumption — I’ve been sued by the wrong bank.
At this point, I’m ready to write my own foreclosure.
This should have been a short-sale years ago, with little or no loss to investors. Instead it’s turned into a fiasco: years of protracted litigation and junk fees as Aurora continues to slog along. No doubt the loss severity will reach some threshold — 100% give or take a little — where they’ll magically figure out how to either prosecute their foreclosure or reappear and offer to close this never-ending saga.
Every month investor losses needlessly mount. Every month my credit sits in the tank. Oh yeah, and every month Aurora continues to collect higher servicing fees.
If Aurora had fulfilled their obligation to investors and to me to mitigate this breach, and closed that short sale, they would have collected nothing for the past couple years. Zero is much higher than the net amount I suspect they’ll end up with on this loan after the inevitable lawsuit against them by investors and/or the mortgage insurer.
Aurora can forget a statute of limitations defense: every month this continues they reset the clock for the inevitable fraud claims.
Forget the “living for free,” nonsense: if I amortize the amount I put down for that house, the payments I made, and the time I lived there I could have purchased it for cash at its current value. My ex-girlfriend has been living for free for years (no comment on my current longtime girlfriend’s feelings about that), but she is not me.
At least one law firm that worked on this fiasco, Stern — who Broad & Cassel has plead deserves to be paid for his malpractice — has disappeared in a fabulous and famous explosion of fraud after my data proved he was a sociopathic liar. Boom.
The second law firm, outfit run by Elizabeth Wellborn, quickly vanished after I wrote to Lizzie that I looked forward to finding out who her “friends at the courthouse” that will “speed your eviction” are, a statement she’d posted on her website. Ciao.
I have no idea what’s happened to Aurora’s OCC loan reviewer, Allonhill, after I found the company was founded and run by the same woman who’d run a prior company, Murrayhill, that created and audited Aurora’s default practices. I suspect it’s see ya’ Susie.
At some point I hope to find out which trust actually owns this loan — even with my large data sets my own loan has disappeared — so I can work with the investors and the mortgage insurer to bring about some justice to Aurora Loan Services. They deserve to join the ranks of the incompetent vendors they’ve hired.
Something is seriously wrong when a borrower spends years trying to bring a foreclosure to fruition only to be frustrated by vendors of the servicer — who, thanks to Lehman’s bankruptcy, may not even have paid for servicing rights — at the expense of bond investors and the mortgage insurer.
Foreclosure is what lawyers call an “equitable remedy.” Any party with “unclean hands” is theoretically unable to receive “equitable relief,” in courts operating under equity, mainly foreclosure and family court. The rule is easy and ancient: if you lie you lose.
Dismissal for unclean hands seldom happens though strict enforcement would be better for everybody that matters. Investors and mortgage insurers could sue servicers and their lawyers for the losses as the cases are dismissed. Judges would clear their dockets and, thanks to malpractice insurance, investors would get paid. Investors would still be able to force borrowers to pay something under a doctrine where you can’t get free houses, but that something would likely be something affordable.
Hopefully I’ll get the chance to work with the genuine parties who lent me money to rip back the money Aurora meant to make for month after month of delay, for this loan and every loan like it.