Many homeowners seem to have a perception that goes something like this: "If you are behind on your mortgage payments, especially by three or four months or more, you can face lawful foreclosure--no questions asked."
The truth is very different from that. Birmingham lawyer John Watts defends homeowners in foreclosures and has written extensively about the subject at his Alabama Consumer Law Blog. Watts has written an article titled "What Is Wrongful Foreclosure in Alabama?" and it's probably the best overview on the subject you will find. Watts shows that foreclosures often are sloppily conducted, and a whole lot can go wrong to make them unlawful--and turn homeowners into victims.
Here is an example of a lawsuit Watts filed against Chase Mortgage, which held the mortgage on our home. As the complaint shows, the foreclosure process is not always as cut and dried as many homeowners might think.
My primary focus, at the moment, is on an element of wrongful-foreclosure law that is perhaps best stated in a case styled Reeves Cedarhurst Development v. First American Federal Savings and Loan 607 So. 2d 180 (Ala. Sup. Ct., 1992). From the Reeves Cedarhurst decision:
A mortgagor has a wrongful foreclosure action whenever a mortgagee uses the power of sale given under a mortgage for a purpose other than to secure the debt owed by the mortgagor. Johnson v. Shirley, 539 So.2d 165, 168 (Ala.1989); Paint Rock Properties v. Shewmake, 393 So.2d 982, 984 (Ala.1981).
At the heart of the underlying Johnson v. Shirley case was a divorce, where the wife alleged that a bank foreclosed on the couple's home in order to benefit the husband financially. The Alabama Supreme Court found in the wife's favor, ordered the issue go before a jury, and wrote:
The mortgagee cannot use the power of sale for purposes other than to secure the debt owed by the mortgagor. Any improper use of the power for such purposes as oppressing the debtor, or serving the purposes of other individuals, will be considered by the court as a fraud in the exercise of the power.
Were we the victims of foreclosure fraud? Considering that conservative political interests had caused me to be unlawfully thrown in jail, and had also tried to arrest my wife Carol, evidence suggests someone wanted both of us out of the house so it could be scoured for documents I had gathered in research for Legal Schnauzer.
When Carol managed to escape abduction and was able to spread news about my arrest, that apparently foiled Plan A. But Plan B involved foreclosure on our home, which kicked into gear just as I was being released from jail. That process, and the resulting haphazard move, could have allowed our home and belongings to be rifled through--in search of damaging information about conservative political interests--while both Carol and I were gone. If proven, that points to a grossly improper use of the power to secure the debt--and a classic case of wrongful foreclosure and fraud.
What about those other oddities connected to our foreclosure? Here are a few:
* A Huntsville law firm called Stephens Millirons, and an attorney named Robert Wermuth, conducted the foreclosure process on our home. Does that firm conduct its affairs in a competent and upright fashion? Well, it's hard to say, but they still have never supplied us with a copy of the foreclosure deed.
* An outfit called Spartan Value Investors supposedly bought our house at an auction on the steps of the Shelby County Courthouse. I say "supposedly" because we didn't attend the event, and given our experiences with the Shelby County "justice system," I would be amazed if the sale was conducted properly. What is Spartan Value Investors? It apparently is a house-flipping company that originated in Tuscaloosa with a University of Alabama graduate named Clayton Mobley. The firm has a Web site, plus an office on Birmingham's Southside. Are they a noble outfit? Well, Lindsay Jackson Davis, the company's market director, told our representative they would pay $2,000 of our moving expenses if we were out of the house by a certain date. We were out by the date, but we've never seen a dime from Spartan.
* Court records show that roughly two weeks after we left the house, Spartan sold it to JAG Investment Strategies, which appears to be another house-flipping company. Records with the Alabama Secretary of State's office show that the registered agent for JAG is James F. Williams, with an address of 5213 Logan Drive in Birmingham. That's right down the street from our house. Does that seem odd? And why would Spartan go to the trouble of successfully bidding on the house--and then promptly sell it to another house-flipping outfit?
* During our last few weeks in the house, Spartan had most of the utilities put in its name. And at least two of the utility companies--Alabama Power and Birmingham Water Works--made the change without checking with us. At that point, under the law, we were in a tenant-landlord relationship with Spartan--assuming Spartan lawfully bought the house, and that's a big "if." It is standard for utilities to be in the tenant's name because the tenant usually pays them. Why did Spartan want the utilities in their name? Apparently, it was so they could terrorize us by threatening to have the power and water shut off. In fact, they did have the water shut off at one point, which is illegal under Alabama law.
* Let's consider some possible political intrigue. Perhaps no law firm in Alabama is more known for doing work with utilities than Birmingham's Balch Bingham. In fact, the firm pretty much is joined at the hip with Alabama Power. Balch Bingham just happens to be where Jessica Medeiros Garrison serves in an "of counsel" role; that's the same Jessica Medeiros Garrison who is suing me in an ongoing defamation case. It's also the same Ms. Garrison who publicly has stated that her mentor is U.S. Circuit Judge Bill Pryor--and Shelby County deputies started showing up regularly on our property very soon after I reported on Bill Pryor's ties to 1990s gay pornography via nude photographs that appeared at a Web site called badpuppy.com. Did Jessica Garrison and/or her legal compadres connected to Alabama Power help ensure our home would go into foreclosure, and that our power unlawfully might be turned off as part of a scheme to terrorize us? And was this done, at least in part, in retaliation for my reporting on Bill Pryor?
* Speaking of Alabama Power and Balch Bingham, they are connected to a curious outfit called Partnership for Affordable Clean Energy (PACE). It sounds like PACE is concerned with keeping energy affordable for consumers. But published reports indicate PACE's primary purpose--perhaps its only purpose--is to ensure that Alabama Power's rates stay at a comfortably profitable level. What law firm helped incorporate PACE? Why, it was Balch Bingham. Who really is behind PACE, and how is it funded? That is not entirely clear, but Mobile-based investigative journalist Eddie Curran is shining considerable light on that question. We never have held Mr. Curran in particularly high regard, mainly because we view his reporting on the prosecution of former governor Don Siegelman as way off base. But we think Curran's reporting on Alabama Power and PACE, at his blog mrdunngoestomontgomery.com, is worth a look. The following post describes the curious relationship between Alabama Power, PACE, and the Montgomery-based political consulting firm Matrix LLC. I never thought I would find myself on the same page with Eddie Curran, but I think he's onto something important with PACE, and I am looking into the matter as well.
* Finally, a friend provided us with a copy of the foreclosure deed on our house, and it shows that Spartan produced a winning bid of $74,359. During the period that we were trying to save our house, Stephens Millirons sent us information, at our request, showing that we could own the house free and clear for a payment of $66,000. My research indicates that it's rare for a house to sale at foreclosure for more than is owed on it, but when that happens, the difference between the two amounts represents equity for the homeowner. In other words, we are owed roughly $8,359, and my sources close to the foreclosure industry say it is Stephens Millirons' responsibility to make sure we receive those funds. Has the law firm sent us a nickel? Nope.
* For the record, a couple named Preston Crider and Angela Gulledge Crider are the current occupants of our home. We know little about them other than they appear to work in or around the nursing field. Are they in our house lawfully? I doubt it. Do they have any idea about the skulduggery that caused our home of 25 years to become available? I doubt it, but then again, who knows how deep all of this goes?
Below is the copy of the foreclosure deed, which a friend found and sent to us. Stephens Millirons, the Huntsville law firm that ramrodded the foreclosure, still has never sent us a copy of the foreclosure deed or any other subsequent paperwork. Our original mortgage, in 1990, was with a company called Troy & Nichols, and we refinanced with Troy & Nichols at some point in the 1990s. A 1993 New York Times article calls Troy & Nichols a "residential mortgage servicer." and reported its sale to Chase Manhattan. Here is how The Times described Troy & Nichols convoluted history:
Troy & Nichols services about $10 billion in residential mortgage loans. The company operates 21 offices in Louisiana, Texas, Mississippi, Tennessee, Alabama, New Mexico and Florida. Chase manages a $35 billion mortgage-servicing portfolio. Last July, First Gibraltar paid the Resolution Trust Corporation $82 million for Troy & Nichols, which had been part of the failed Southwest Savings Association of Dallas. First Gibraltar is owned by the financier Ronald O. Perelman, who also controls Revlon Inc. and Marvel Entertainment Group.
A document that Spartan Value Investors sent us described the auctioneer on our home as James J. Odom Jr., of Troy & Nichols. The foreclosure deed below identifies Odom in a different, and more detailed, way.
(Note: The Alabama State Bar lists a James J. Odom Jr. as an attorney in Pelham, with an office on Yeager Parkway. Could he be related to Michael B. Odom, who with his mentor Jesse P. Evans III, screwed us royally in our defense of the lawsuit that our troublesome neighbor, Mike McGarity, brought against me? That, of course, is Mike McGarity with the extensive criminal record. Wouldn't it be ironic if the lawyer who auctioned our house was related to the lawyer who helped usher in our 15-year Era of Legal Headaches? Odom and Evans took roughly $12,000 of our money, did pretty much nothing that they should have done, refused to file a valid counterclaim after stating they would do it, and then lied to me about their actions. When I requested a refund--as you would do with a mechanic who failed to fix your car--Odom and Evans refused. In my view, they flat-out stole about $12,000 from us.)
Bottom line: We have no idea who actually "owned" our mortgage. Based on The Times article, the paper trail goes something like this: Troy & Nichols > Southwest Savings Association > Resolution Trust Corporation > First Gibralter > Chase Manhattan.
21 comments:
As screwed up as the mortgage industry is, there is no telling what actually happened on your foreclosure. They do a terrible job with paperwork, and it sounds like your mortgage bounced from one company to another.
We rarely agree on our opinion, but in part of this article I am inclined to agree with you. It has always been my understanding that if an auction occurred for any property to collect a debt, fees for the auction and attorneys were collected first, then the debt was paid. If the amount received was over the amount owed, the original owner would collect the difference. I will propose two possibilities that could be an issue. First, the $8,359 could have been eaten up in "fees". While that seems a little excessive at first glance, if every party involved collected a fee, i.e. the Sheriff's Office, Probate Office, Clerk's Office and attorney's office, the fees could stack up rather quickly. $74,359 is a weird amount in the first place, why not $74,000 or $75,000. Most auctions would be for even amounts, unless the "buyer" is the only one and knows the exact amount that clears everything. It would seem that you should have been provided an invoice showing exactly how all the money was allocated. Which brings me to my second point. Do they have your new mailing address? Earlier post suggested you didn't change your address with the Jefferson County Clerk's Office for your civil case, citing a number of reasons. Is it possible that they used your old address and it got returned to them? Have you contacted the company since your move? If so, what was their response? On a side note, did they put the $2,000 offer in writing or do you have a recording of it? If not, I hate to say it, but you can kiss that money good-bye.
You need a good lawyer to nail these SOBs!
Johnson v. Shirley was remanded for further proceedings. What was the outcome at the that trial? It also dealt with a first and second mortgage. I skimmed over the case, but what I did read, suggested the foreclosure of the first mortgage was affirmed and the issue was with the second mortgage.
Interesting point about the uneven amount. Question: Who is "they" that should have our new mailing address? Is it Stephens Millirons, the firm that conducted the foreclosure? If so, no, they don't have our address, but we were in the house for more than two months after the foreclosure, and we never received a word from them about anything. We were told prior to the auction that we could own the house free and clear for a payment of $66,000, and that included a bunch of tacked on fees. The amount we actually owed was significantly less than that. My impression was that any fees already were figured in.
We haven't contacted anyone since the move because we didn't know who to contact. I figured calling the courthouse would result in the runaround. A friend with knowledge of how these things are supposed to work said Stephens Millirons is responsible for getting documents and our money to us. I probably need to contact them, but again, I expect the runaround. Call me cynical, but if they steal our house, what's to keep them from stealing what's left of our equity?
As for the $2,000, no that wasn't in writing, so I agree that money can be kissed good-bye. Moral of the story: Never trust a house flipping company to tell the truth.
If we had it to do over again, we would have stayed in the house and fought it out to the death with Spartan Value Investors. We could have used some professional legal help--we still could use such help--but it's been hard to come by from Alabama. I was in a touch-and-go emotional state after being released from jail and had a hard time trying to think my way through what was being done to us. I think I have a much clearer vision of it now.
I would like to know who actually owned our mortgage, and I would like to know how Chase arrived at the decision to move toward foreclosure while I was in jail--and they did it without much of any warning to my wife, after we had received one extension. We had timely paid on this thing for roughly 23 years--and never would have fallen behind if someone hadn't cheated us out of our jobs--so the lack of notice and consideration is pretty disgusting.
In my view, whoever caused me to be thrown in jail also cost us our house. With me in jail we had almost no way of trying to get back on track and deal with foreclosure issues. That was a five-month period where Carol and I could barely communicate--and it was time where we lost an opportunity to deal with the foreclosure problem.
Yes, Johnson v. Shirley was remanded for further action, which probably means either the case went to trial or was settled. I haven't been able to find records on how the case turned out. The case did involve two mortgages, but I see no sign that has any impact on the finding re: wrongful foreclosure. The finding in Johnson was pretty much identical to that in Reeves Cedarhurst. From Johnson:
"Regarding the wrongful foreclosure claim, it is generally recognized under Alabama law that a power of sale given under a mortgage affords the mortgagee an additional and more speedy remedy for recovery of the debt. Paint Rock Properties v. Shewmake, 393 So.2d 982, 984 (Ala.1981). However, the mortgagee cannot use the power of sale for purposes other than to secure the debt owed by the mortgagor. Any improper use of the power for such purposes as oppressing the debtor, or serving the purposes of other individuals, will be considered by the court as a fraud in the exercise of the power. See, Shewmake, supra, at 983-84, quoting Abel v. Fricks, 219 Ala. 619, 123 So. 17 (1929)."
As you can see, this provision has roots in 1929, maybe earlier, so it's been around a while.
You've provided a lot of valuable information here, not only about your experience but how it could apply to others. One of the best posts you've written, LS. It's long, but I hope people take the time to read it.
Yes the "they" I referred to is Stephens Millirons. If they don't know where to send paperwork, it is going to make it difficult to get it to you. I'm sure you forwarded your mail, but some types of mail are returned to sender rather than forwarding. Advising them of the address, even if it's a P.O. Box puts the ball back in their court. If they sent a certified letter, that got returned to them, they may not try again. At least if you contact them, they lose that argument. I am a little disappointed, the old Roger would have recorded the conversation where they promised $2,000 and posted it to YouTube. Speaking of YouTube, it's been a while since you've uploaded a video. Do you have plans to make any more? It also looks like a few videos are missing, did you delete them?
Was there liens on your property? I just watched your video of Bubba Caudill auctioning your house back in 2008 for a little over $2,700. I'm guessing that may have also been factored in the about that was bid on your house.
Unfortunately, @11:27, I'm not "old Roger" anymore. At least two medical professionals have diagnosed me with PTSD, and the symptoms and repercussions from that are very real. It's part of the fallout from having brownshirts enter our home, beat me up, spray me with mace, and haul me to jail for five months--with no lawful justification. It's the fallout from leaving jail and then having your home of 25 years stolen out from under you--and I believe the evidence strongly suggests that our foreclosure was the product of fraud. The $2,000 promise was made to a friend of ours, so I was not directly involved in that. I figured Spartan would screw us on that, and they did. They also turned off our water, and threatened to turn off our power, and that is illegal in Alabama and most every other semi-civilized state. As for YouTube videos, the material I've been reporting lately just hasn't required videos. Plus, our video camera was one of the items that got lost or stolen in our move. It might be in a Birmingham storage unit, but I doubt it. We plan to replace it soon, so yes, I hope to make more videos. I haven't deleted any videos. In fact, I've posted additional videos, several of which are marked private (for now). That means I can see them, but the general public cannot. They will be used at the appropriate time.
Were there lawful liens on our house, @11:54? No. Was there an utterly bogus sheriff's deed in Bill Swatek's name? Probably so. I have no idea if that was factored into the amount bid on our house.
Are you saying Alabama Power and PACE had something to do with your foreclosure?
I think it's possible, and I'm checking into it. Will address this issue further in an upcoming post.
Hey, LS, big fan here. Maybe I'm paranoid, as you've been accused of being, but I get the sense that @11:27 knows something about the theft of your video camera. Why else would he be asking about YouTube videos, and your supposed lack of new ones.
If you could trace the comment @11:27, I bet you would find someone who knows exactly who entered your house, and why, and what they came away with. Heck, he might have been one of the people involved.
Call me nuts, but I think @11:27 confirms your suspicions about what went on.
I do hope you will be able to get your home back. it really is very sad at the rate Americans loose their homes to the banking industry and their friends.
I'm not calling you nuts, @5:51. In fact, I appreciate you raising an issue that I had not considered. In retrospect, the comment is peculiar.
Thanks, e.a.f. Based on my experience, I would say going through foreclosure is much worse than going through jail. One of the things that got me through jail is the thought that I had a home to return to--and I believed I would be back there relatively soon. When you really don't have a home, and evidence suggests the one you had was swiped out from under you, it's extremely difficult.
I asked about YouTube videos, because Roger use to record a lot of phone calls and post them to his channel. You can look at his YouTube channel and still see most of them; I know s few aren't available anymore. There were a couple where he is speaking with deputies in reference to him being hit with a sign of some sort. One of the first videos was the auction that led to a possible lien on Roger's house that I watched to see how much was bid. I was under the impression that the foreclosure company told him directly that they would pay him money to be out by a certain date. If he had a recording of it, I would hope it would be uploaded for all to see. I would also like him to get a copy of the arrest video and upload it too. I had no clue Roger had lost his camera, but then again my question was for an audio recording not video. I don't have a clue what went on with the foreclosure. You may not be nuts, but your definitely reading too much into a simple question.
So apparently the loss of a disabled person's access to their home is the only thing that will halt this high theft of public assets. Blue Indy released to Fox 59 News this statement on its decision to halt work at the site
Court approved shoplifting class
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In some cases of foreclosure, there may be enough instances of misconduct by the lender to show that the entire process constitutes a wrongful foreclosure. Many states even have common law regarding this issue.
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