Joe Wright
Activist Post
There are some stories that are so over the top as an example of the brazen disregard for human dignity that they defy imagination. But, we know that truth is stranger than fiction . . . and this latest event is certainly proof of that.
Foreclosure fraud has become institutionalized within a corrupt banking structure; it began at the top with banks such as BoA and has trickled down into nearly every community. For example, one couple had their home in Tampa foreclosed on even after they had paid off the full amount in cash. Countless others have been victims of mortgage payment modification schemes.
However, the predatory nature of what is happening to 75-year-old Aron Ezilla Ridge in Travis County, Texas might in fact be what one news outlet is calling “The Saddest Story You Have Ever Heard.” This story involves a mortgage company, but it also has a scary link to property taxes that should raise questions about the very nature of home ownership.
Back in 2010, at the peak of “Foreclosure-Gate,” a few members of the banking consortium went on record to deny their responsibility for creating a system that might have given mortgage holders a raw deal:
Jamie Dimon, CEO of JP Morgan Chase, whose bank is implicated in the scandal, said this week in a conference call that there have been no accidental evictions. “We’re not evicting people who deserve to stay in their house,” the multimillionaire banker declared.
“If you didn’t pay your mortgage, you shouldn’t be in your house. Period,” Walter Todd of the investment advisory firm Greenwood Capital Associates, told Reuters.
“Everyone’s responsible for following the law. If we all don’t have to pay our mortgage, should we just stop paying taxes, too?” said Anton Schutz, president of Mendon Capital Advisers. (Source)
Interestingly enough, even if you follow the law (and pay your taxes) as the above paragons of ethics assert, apparently your home can still be taken by sleight of hand and/or bureaucratic ineptitude. Such is the case with elderly and infirm Aron Ezilla Ridge, who is debilitated in a variety of ways as Courthouse News reports:
Ridge is partly blind, has diabetes, congestive heart failure and had surgery for colon cancer several years ago.
“She needs a wheelchair to leave her home and is largely housebound at this point in her life,” the complaint states. “She can read but her reading level is approximately at the 6th grade level and her ability to read is, of course, further limited by her failing eyesight.”
Regardless, she had paid off her mortgage 20 years ago, but needed repairs for which she did not have the immediate cash. She entered into an agreement for a “reverse mortgage” of $39,000 with a nationwide mortgage lender called James B. Nutter & Co.
A reverse mortgage is geared toward those who are 62 years and older, and essentially serves as a revolving credit line with title still held by the homeowner rather than with the lender as it would for a typical mortgage. Instead of the borrower making payments, the lender pays the borrower with the promise that the loan is to be paid at the time of death or sale.
It hasn’t been so cut-and-dried for Ms. Ridge who is now the plaintiff in a case against James B. Nutter & Co. after payment of her property taxes came into question.
Ridge says she was told by the Travis County Tax Assessor’s office in 2000 that she did not need to pay property taxes because the value of her home was below homestead and senior exemption caps.
But she received a property tax bill in 2011 for $20.31. She says she was able to drive to the assessor’s office and pay the taxes in full and on time.
In April 2012, the assessor’s office informed her that her home was valued at $60,743 and that her taxes were estimated at $46.87, according to the complaint.
Ridge says she did not receive a tax bill, but later received a receipt stating that $49 in taxes were paid in late 2012.
“She assumed that the receipt meant she was again exempt from property taxes,” the complaint states. “She did not call the tax office to see why she had received a receipt without having received a bill.”
This confusion, which has every indication that it was created by an outside party, gave an opening for Nutter & Co. to pounce via the “acceleration clause.”
In January this year, Nutter’s attorneys told Ridge her reverse mortgage had been accelerated, and that she had to pay off the entire loan “or the lender would exercise its right to enforce the lien on her home.”
Ms. Ridge’s home officially went into foreclosure Jan. 30th, 2013.
Unbeknownst to many older homeowners who take out reverse mortgages (especially those who have a 6th-grade reading level), an acceleration clause is there to ensure immediate payment. However, it is supposed to only be triggered upon the sale of the home, or death. Nutter & Co. are invoking this due to supposedly unpaid taxes. Ironically, Financial Web defines this clause in the following way:
At that point, the proceeds from the sale of the house, or the life insurance policy will have to pay for the remaining balance on the reverse mortgage. Many lenders also have an acceleration that is tied to fraud as well. (emphasis added) [Source]
The wording of Ms. Ridge’s exact contract would have to be examined, but it seems way outside the normal, ethical boundaries to invoke an accelerated payment due to unpaid property taxes . . . and even that fact is in question. This certainly appears to be one of those contracts “tied to fraud” that is mentioned above.
“The only property to which the application could possibly refer were the taxes for 2012 – which were not due until January 31, 2013. Yet defendant intended to enforce its right to foreclose on Ms. Ridge’s home because she had not paid $49.00, which at the time the application was filed, was not due yet.”
It’s hard to imagine this situation getting any more convoluted . . . but it does. Not only is the lender looking for immediate payment of the original loan of $39,000, the company seeks that amount, plus interest, fees, and subsequent attorney’s fees that total more than the actual appraised value of her home. In essence, she couldn’t even sell the home (or die) to pay off what is being demanded.
Ms. Ridge has signed on with an attorney who appears to be taking this very seriously and is going on the offensive in just about every way possible. Courthouse News lists the following that is being sought on her behalf:
. . . actual and punitive damages, an injunction and declaratory relief for wrongful foreclosure, breach of contract, negligence, real estate fraud, unjust enrichment, attempted conversion and violations of the Unfair Debt Collection Act and Deceptive Trade Practices Act.
Let’s hope this sad story has a happier ending. We’ll keep you posted. Please use the comment section below to tell us if you, or someone you know has been faced with a similar predatory lender.
Main source for this article, with additional must-read information:
http://www.courthousenews.com/2013/03/22/55963.htm
Other sources highlighting reverse mortgage scams:
http://www.huffingtonpost.com/2012/06/27/reverse-mortgage-foreclosures_n_1631626.html
http://www.nytimes.com/2012/10/15/business/reverse-mortgages-costing-some-seniors-their-homes.html?pagewanted=all&_r=0
http://www.investopedia.com/financial-edge/0111/5-reverse-mortgage-scams.aspx
Read other articles by Joe Wright Here