Family Breaks Into Former Home, Moves Back In, Claims Foreclosure was Fraudulent, Lots of Legal Maneuvers
Thanks to a burbed reader for sending this in. I know it looks like another TL;DR, but trust me, this one’s worth it.
By Stephanie Hoops, Ventura County Star
Posted October 12, 2010 at 2 p.m., updated October 13, 2010 at 6:58 a.m.
Photos by Karen Quincy Loberg, VC Star Staff
An 11-member Simi Valley family who claimed they were wrongfully evicted after a foreclosure forced their way back into the house over the weekend in a move meant to block the new buyer from moving in.
Jim and Danielle Earl and their nine children used a locksmith to help retake possession Saturday, despite an investor who spent $697,000 to purchase the house at a foreclosure sale in January and remodeled and sold it to people ready to move in Tuesday. The two-story house in the 5800 block of Mustang Drive has nearly 4,000 square feet, six bedrooms and 4.5 baths.
Police officers were on hand when the Earls changed the locks Saturday but did not intervene. The Earls’ lawyer, Michael Pines of Encinitas, held a news conference to announce the family was taking back the home and reportedly filed a complaint against the real estate broker and investor when police arrived at the scene.
Pines said the Earls are not concerned about the possibility of being charged with trespassing.
The Wall Street Journal covered this story too, and they said we may be seeing more of this. Now it’s not enough for a bank to go through through all the steps of foreclosure and eviction on determined deadbeats. You never know when they’ll turn around, hire a lawyer and a locksmith, and move right back into the house you sold out from under them in good faith! Your team of robo-signers worked hard forging a pile of documents and backdated every single one of them, and all for naught.
Actually this story gets more and more complicated depending on which version you read. But the basic facts are, the Earl family bought the house in 2001 for $539,999. Being Southern Californians, they considered mortgage equity withdrawal a religious rite rather than a guaranteed method of ruining their credit and their future, and owed $880,000 on the first mortgage, when they were finally shown the door of their former residence. Total debt and unpaid costs on the property was over a million dollars, according to foreclosure documents.
The house was bought by investors for $697,000, who put $40,000 of improvements into it (including the mandatory granite countertops) and flipped it for $800,000. With the new owners scheduled to take possession within a few days, the Earls (both parents and 9 children) broke in and moved their stuff back.
A number of items are in dispute, which is where the fraud claims come in. This may be a question of which party are the bigger slimebuckets, as absolutely nobody comes out looking good in this story.
The Earls had some financial difficulties, and in trying to set their mortgage right, say that a catch-up payment of $12,500 they made to GRP Services was never credited to their loan. Danielle Earl says she then stopped making payments because the loan had been repeatedly reassigned to different lenders, she believed, fraudulently. “They clearly didn’t want us to catch up,” she explained. Their lawyer elaborated:
The Earls’ fraud claims are twofold, [Michael] Pines said: The loan was originated and serviced with improper documents, and the foreclosure and eviction were created with new and phony documents. He said there were multiple instances of people signing the foreclosure documents who were not authorized to do so.
Foreclosure documents says GRP Financial Services owns the loan. The Earls’ mortgage was from WaMu, which was acquired by JPMorgan Chase, and went to B of A the same day the Notice of Default was sent. The Earls claim Chase never properly acquired their loan and therefore had no right to sell it. Not surprisingly, the group acquiring the house doesn’t see it that way.
“They broke in and are proceeding to squat in there,” listing agent Chris Garvin of Troop Real Estate, told HousingWatch. […]
Garvin was not only the listing agent but also the acquisition and sales partner for his client, Conejo Capital Partners, the investors. He says that he purchased the home in good faith for $697,000 in January on behalf of his client, at an auction on the courthouse steps.
In June, a judge refused to seat a jury for trial, claiming it was another delaying tactic by the Earls. Conejo had been trying to get them out of the house since February.
In 1994, the Earls have filed for Chapter 7 bankruptcy, and they began two serial and voluntary Chapter 13 bankruptcy proceedings after their house was sold at auction The judge claimed the bankruptcies were yet another delaying tactic. Their liabilities exceed one million dollars, with creditors including both the IRS and the state tax board.
At the close of the trial, however, [Conejo attorney Stanley] Yates said of the whole matter: “I will say this, that the (Earls) are an indefatigable source of stalling and red herrings.”
The Earls are asking for damages of over one million dollars on the fraud allegations, and claim this means they own the house free and clear plus additional money owed them.
Good luck with that.