Homeowner Recovers House Lost In Foreclosure Sale After "Missing POA" Issue Raised In Subsequent Lawsuit Leads To Settlement With Lender

In Salem, Virginia, The Roanoke Times reports:

• The day his house was sold at an auction on the steps of the Salem courthouse, M.T. Warden said he didn't even know he was facing foreclosure. He knew he was several months behind on his mortgage. When he called American Home Mortgage Servicing to make a payment, Warden recalled recently, "they said my home had been sold, and I didn't live there."

• That was news to Warden, 30, who, at the time, was sitting in the kitchen of his Valleydale Road home. The next week, he found an eviction notice taped to his front door. Rather than move, Warden filed a lawsuit challenging the foreclosure.

• After his attorneys found flaws in the paperwork leading up to the Dec. 2, 2008, auction, the case was settled last year and Warden was allowed to keep his house.

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• It's unknown just how many forced home sales in Virginia might have been affected [by the filings of fraudulent documents], and to what degree. Tom Domonoske, a Harrisonburg attorney who represented Warden in the disputed Salem foreclosure, said he believes the flaws uncovered in that case are common.

• After Warden fell behind in his payments in fall of 2008, an official with Dallas-based American Home Mortgage Servicing signed a document initiating the foreclosure, asserting she had power of attorney to act for the lender, U.S. Bank. The foreclosure fell apart when the mortgage company could not produce the power of attorney -- a document that Warden's lawsuit claimed never existed. "It was just part of a shortcut they were taking," Domonoske said of the missing document.

For more, see Foreclosure system ripe for errors in Virginia (The state has one of the fastest-moving systems in the country, and one lawyer said flaws are likely common).