suggest the foreclosure on our home of 25 years was not lawful. But there are a number of oddities about the process we haven't addressed yet. Let's take a look at those now, along with the law on wrongful foreclosure in Alabama. (See foreclosure deed at the end of this post.)
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.