Ohio Homeowner Fights Foreclosure & Lives Pymt Free for 11 YEARS!!!

[Moe]

By Moe Bedard

Let the truth be known. Most homeowners do not respond or fight back when they are facing foreclosure. The lender files the notice of default and the court hearing comes and goes without a peep, answer or simple appearance from the defendant (homeowner). 120-180 days later, the trustee sale happens on the court steps and they become another foreclosure statistic.

Then there’s Richard Davet.

In 1996, Mr. Davet was served with a foreclosure action in his Cuyahoga County, Ohio 1940’s 6 bedroom home. Unlike many homeowners that just take their foreclosure medicine and move on to rent, Richard Davet decided he was going to fight back against NationsBanc Mortgage Corp. and challenge them till the end in a Ohio court of law.

Davet planted his heels firmly and turned his fight into a full time job as he hit the books at the library of Case Western Law. He began his fight by challenging the lawsuit and then pro-longed the suit by flooding the court with motions, objections and affidavits, and he appealed the judge’s rulings at every chance, which bought him 11 years, mortgage payment free in his home.

Wall Street Journal;

“Mr. Davet has litigated these same issues over and over again…and in each instance the courts have dismissed his claims,” said Bank of America Corp., Charlotte, N.C., which merged with the owner of NationsBanc.

Several years into the case, Bank of America took the unusual step of bringing in lawyers from a big corporate law firm, Jones Day. Five years later, in 2005, a judge granted foreclosure in the amount Mr. Davet owed and set a sale date for the property so that the creditors could take the sale proceeds. But when the property finally went to sale, Mr. Davet set up a shell company to win the auction, for $436,000. He couldn’t pay more than the required $10,000 deposit, but the move delayed his eviction by months.

Mr. Davet says it wasn’t a delay tactic and that he was trying to line up investors to buy the property. The house was later sold to another family for $410,000.

The eviction finally happened on a snowy day in January of this year. Don Saunders, who lived three doors down from Mr. Davet and is a trustee of the neighborhood association, says it came as a shock in the upscale area.

Mr. Davet could be called a foreclosure fighter and pioneer or what a lot of critics have called him, “a scumbag”.

The Wall Street Journal;

The mortgage company that filed the suit, then NationsBanc Mortgage Corp., had so much trouble with the case that four years into it they brought in lawyers from Jones Day.

I obtained this quote from the law firms website;

Since 1893, Jones Day has grown, in response to our clients’ needs, from a small, local practice to a truly global firm with more than 2,300 lawyers in 30 offices around the world. Today, Jones Day is one of the most recognized and respected law firms in the world, and we count more than 250 of the Fortune 500 among our clients.

I think it’s quite amusing that a homeowner from Cuyahoga County, Ohio gave this powerful, 2,300 lawyer and 30 office law firm a 11 year fight.

More form WSJ;

Mr. Davet continued to try, unsuccessfully, to get the federal court to agree that the state judgment was invalid. Then, a possible lifeline arrived this past October, when a federal judge in Cleveland, Christopher A. Boyko, dismissed 14 foreclosure suits because the plaintiffs that brought them couldn’t prove they owned the mortgages when the suits were filed.

Such a problem can occur when mortgages are turned into securities and sold to investors. The companies involved in the transaction may not have checked that each mortgage was legally transferred, or “assigned,” to the new owners. In essence, the originating lender continued to legally own the mortgage — and would thus need to be the plaintiff in a foreclosure suit. In Mr. Davet’s case, however, the mortgage, which was not securitized, changed hands multiple times and wasn’t actually owned by NationsBanc until three years after the company filed suit.

Other judges have since followed Judge Boyko’s lead. The Ohio attorney general has asked numerous judges to dismiss or delay foreclosures based on similar grounds.

Earlier this month, Mr. Davet filed a second federal appeal, this time citing the Boyko ruling, which he believes he inspired. It’s unclear whether the latest salvo will work. If it doesn’t, Mr. Davet says, he will set his sights on the U.S. Supreme Court.

There are many debates circulating in the blog-sphere and forum arena on the internet in regards to foreclosure defense actions and the recent Ohio rulings. We reported on the recent Judge Boyko ruling and other similar rulings that are coming out of Ohio in November. These cases and many like them are at the forefront of the foreclosure legal sphere and will remain a hot topic as the foreclosure crisis continue with now apparent end in sight.

Here are some of those interesting comments circulating on the internet;

“It is heartwarming to see, that the Law can be worked by a “pro se” party. If the Bank had to bring in the awesome gun of Jones Day, then the Law can work. It is not that the party managed to live 11 years for free, for if you count the billable hours to learn the law, free is then an abstract. A delay in the foreclosure could only occur if the Court’s gave merti to his arguments. Which must have had some validity to take this long. Kudos to the system for making a grant effort and doing correctly.
As both a corporate and general practice lawyer, I’m with JC and bboy, but am really appalled at the name calling and lack of analysis of most of the other responders. I’ve also had a mortgage closing business back in the mid ’80’s when things went belly up, and I’ve seen a lot (but hardly all).

There is a big difference between having the Note, which allows you to sue for the repayment of the debt, and having the ownership of the property which a mortgage affords, and allows you to foreclose. If you don’t “own” the mortgage, you have no right to foreclose it, and you can’t foreclose for fees. Take it from there - these rights of ownership are important! Too many lenders are ripping us off with unjustified fees. I think the borrower here was actually doing the law and financing a great service.” Comment bylaserhaas.

“Judges like this one clamor for more pay as they waste mountains of tax dollars pampering a pro se debtor tying up the court for how long? ELEVEN YEARS?!?” Comment by Increased judicial salaries? HA!!!

” I agree with JC–if you read the article carefully you will note two things:
1. The entire legal process stemmed from NationsBanc’s allegedly erroneous tacking on of 90 separate sets of late fees, which the bank subsequently was largely unable to conclusively document were connected to payments actually made late.

2. NationsBanc apparently did not even own the mortgage in question (presumably the first mortgage) until 3 years after it initiated the initial foreclosure action.

Comment by bboy

“When I worked for a federal judge in Ohio I saw my fair share of “jailhouse lawyer” lawsuits from prisoners and their persistent and baseless motions. Mr. Davet’s actions remind me of those days. If he was a licensed attorney, he could certainly face disciplinary actions.
Of course, his unwillingness to pay legal fees may evince his cheap character.

As for his central argument of note ownership, I am curious to see if Ohio is willing to hinder securitizations by forcing the loan originator to hold onto the note. Comment by Cleveland Esq.”

“As a corporate lawyer who has a little bit of familiarity with the ins and outs of large banks, I am wholly unsurprised that someone who actually READ the terms of their mortgage papers would be able to drag out a process this long. Many of these banks have a HORRIFIC record of maintaining accurate and complete records on borrowers. In this situation, this failure to maintain records properly left the borrower subject to allegedly erroneous late fees that made payment of his mortgage impossible.”

“This case should act as a wake up call to the mortgage servicers of the nation: your sole value added to the process is to KEEP TRACK OF THE PAPERWORK. Don’t expect every borrower to be instantly cowed by a lawsuit or a foreclosure notice–there are folks out there (even non-lawyers) who can read and will use the boilerplate in the contracts (together with common law contracts doctrines) to stymie your efforts to go after ‘deadbeat’ borrowers.

All in all, Mr. Davet’s lawsuit shows that the legal system does work. By requiring lenders to actually DOCUMENT their claims, maybe, just maybe, this case will lead to better customer service and an end to frivolous fees.” Comment by huntting

[Brian K.]

Perhaps her will be writing a book? As of now I have only had a foreclosure case go for a little over two years. I hope to get one that will go on until my kids get into college, it would be fun, but the court file would be a bear to drag into the judges chambers for hearings.

All kidding aside, this is a good example of what a well motivated person can do in one of these cases with a few basic forms and a little guidance.

[five2one]

Originally Posted by Brian Korte

All kidding aside, this is a good example of what a well motivated person can do in one of these cases with a few basic forms and a little guidance.

where do I sign up for the forms and guidance??? We're nearly a year since defaulting (will be a year by the time we go to mediation in February). The bank and the loan modification people can't get their stories straight and the fees keep adding up and up. I'm hoping all that plays in my favor, too.

[momof3boys]

If HomEq isn't going to work with me, trust me...I will be fighting for as long as I can...I am STILL working on my QWR letter (I am a terrible letter writer), but I am currently getting all my ducks in a row...The fight is on.....

[dealingwithHomeEq]

Mr. Davet is a hero. And speaking of HomEq, does anyone know how long you can stall the collections people at Homeq before they finally hand you over to the next level--loss mitigation? I know they've got to have some objective guidelines for their collections people.

My payment was due on December 15. They finally called me yesterday for the first time. That should be an indication of how inundated these people are.

[Brian K.]

The delay begins with a proposed workout. If you are attempting to negotiated in good faith , they are very unlikely to move you to loss mitigation. Also, Freddie and Fannie guidelines require the lender to inquire about a workout and delay foreclosure until the third month after the first missed payment.

A good defense begins with a good offense. Review your docs and find those TILA and RESPA violations. It is really hard to foreclose when the mortgage has been revoked!

[momof3boys]

[quote=dealingwithHomeEq;2556]Mr. Davet is a hero. And speaking of HomEq, does anyone know how long you can stall the collections people at Homeq before they finally hand you over to the next level--loss mitigation? I know they've got to have some objective guidelines for their collections people.

My payment was due on December 15. They finally called me yesterday for the first time. That should be an indication of how inundated these people are.


I am dealing with HomEq right now...I got the Loss Mitt. people to call me back when I was 45 days behind...How I did that?? Contacted Keith Becher the CEO. He was an extremely nice man. BUT, I have been battling with Loss Mitt since October. I have called Mr. Becher several times after our inital conversation to see if he could expedite the modification process, and he has not returned a phone call. I can only hope in the end, this all work out. Just get both guns loaded and be prepared to fight. Their loss mitt. depart is hit or miss. At times you will get the most wonderful person on the phone who treats you like gold, and at times you will get the under paid, overworked piece of shit that treat you like you are a prisioner trying to get out of the famous "debtor prison"...

[dealingwithHomeEq]

Thanks to both replies. Brian, do you know where I can find the Fannie and Freddie guidelines on the requirement for the lender to negotiate a workout? HomEq asked me to go onto their web site and fill out the financial form. I told the agent that, because of the nature of our business, we qualified for the original loan without showing any proof of income. Why would he think we can show it now? He didn't have an answer, but he said that I should fill it out anyway.

Momof3boys, I am tracking down Mr. Becher's home address through the property records and plan to serve him personally with a proposal letter when the time comes.

I checked the California Secretary of State's Internet site to get an address for service on HomEq. http://kepler.sos.ca.gov/list.html

I tried every combination of HomEq I could think of. Interestingly, there is no current registered agent listed, even though they have a principal office in California. I guess that's just one more obstacle for the people they don't want to hear from--at least not in writing.

[dealingwithHomeEq]

Thanks! This is good information. Happy New Year!

[tomnikids3]

[quote=dealingwithHomeEq;2556]Mr. Davet is a hero. And speaking of HomEq, does anyone know how long you can stall the collections people at Homeq before they finally hand you over to the next level--loss mitigation? I know they've got to have some objective guidelines for their collections people.

My payment was due on December 15. They finally called me yesterday for the first time. That should be an indication of how inundated these people are.

I have had dealing with Homeq for the last several months and believe me they dont seem to easily let you get in touch with the loss mitigation dept, i proposed a modification plan drew up the numbers submitted that with our paystubs, taxes info, etc. and have not heard yet and its been 4 wks. its an uphill battle with Homeq that really has no real vested interest..all they can suggest is put the house up for short sale, we got behind due to my job loss several months ago, i got back to work 3 months ago and we have almost begged Homeq to work with us to save our home. The ONLY plan they could propose is pay 4954.00 a month which was impossible...We we served with foreclosure papers this past saturday that finally let us know who owns the note and i will try to circumvent Homeq and appeal directly to Wells Fargo, in the meantime i have compose a rebuttal letter to the attorney or Wells and the court in my County. Its a shame to me that my proposal i submitted to Homeq porposed paying everything with 2 scenarios of 30 and 40 year rates affordable payments and they would not loose a dime. Does it make sense that they would rather lose money than retain and make money? I dont have a masters degree in finance but this is not rocket science to me.

[dealingwithHomeEq]

See my reply to your post under HomeQ Modification Question. Hope this helps. Keep in mind that if they sued you in New York state court, then "diversity jurisdiction" is inapplicable. Diversity jurisdiction allows an out-of-state plaintiff (the bank in this case) to sue for foreclosure in federal court, provided the amount in controversy exceeds $75,000. Standing, though, would still be an issue in any court--state or federal.

[tajelina]

I am VERY new to this foreclosure stuff... so bear with my questions.

This is a whole new world to me. New terms, new concepts... someone help me get "into" this mindframe. There seems to be a lot of lingo/ideas that only the experienced understand here!

And might I add what an AWESOME forum this is?!

Is this thread basically conveying the idea that a foreclosure can be legally "stalled"? A few months ago I would've gasped at how unethical the concept is... but I'm tired of drowning in the middle-class pool. My husband and I are honest people making every effort to meet our financial obligations, but a few months of financial havoc (such as his custody battle for his daughter and an unexpected business repair) has left us in a whirlwind of debt-collectors and financial woe.

I feel like I'm "missing something" in this thread... like there's something between-the-lines here relating to financial relief over a long period via legal means (letters, etc...) but avoiding the word "tactic" (as it's probably a bit harsh).

Please don't think I'm sounding critical... we're desperate... and we're the type of people to say "well, it's not the lender's fault we didn't keep up with our payments... it's not their problem we hit a temporary financial low... and it IS OUR fault that we didn't answer the phone for so long because we didn't know what to tell them... now we pay the price that we can't pay monetarily... we lose our home."
That's what one part of me says, while the other is here on this forum desperately seeking alternatives.

[tajelina]

BTW, I live in NY so I'm curious also about the above "diversity" statement (I think that's what it said).