Reverse Mortgage Foreclosures Based On Banksters' False Claims That Elderly Homeowners Violated Loan Agreement By Moving Out Of Their Homes Begin To Garner Spotlight
- Felicia El Hassan had already lost one house. During turbulent times decades earlier in communist Cuba, she'd been forced to surrender property before fleeing to America.
The 86-year-old woman thought those days were far behind her after living quietly for nearly 20 years in a modest house in Opa-locka, a working-class neighborhood in northern Miami-Dade.
But that peace of mind ended when a process server appeared on her doorstep with court papers informing her of a foreclosure lawsuit by Liberty Home Equity Solutions Inc., formerly Genworth Financial Home Equity Access Inc. The complaint's sole basis was the lender's claim that El Hassan violated a key covenant of reverse mortgages by moving out, thereby defaulting on the loan.
"The allegation is basically debunked," El Hassan's lawyer, Ricky Corona, said. "Not only was she living there, but … they served it at her house."
This, defense attorneys say, is a new strategy by lenders and plaintiffs lawyers: sue to foreclose on government-guaranteed home loans under various defaults, then fast-track these suits by filing motions for orders to show cause. These motions shift the burden of proof to the borrower, requiring them to appear in court and explain why a judge shouldn't grant final judgment against them.
"All of a sudden, we saw a spate of foreclosures where the mortgage companies alleged the seniors no longer lived in the home," said Gladys Gerson, supervising attorney for Coast to Coast Legal Aid of South Florida's(1) senior unit. "This has been happening around the state."
About a dozen similar cases reached Gerson and other attorneys at Coast to Coast, who have helped a growing number of low-income seniors fight and win dismissals despite aggressive lender litigation.
Florida is ground zero for seniors' issues, but as the strategy has often proved effective, it's likely to spread, according to defense attorneys. “If you see the volume of national advertising that’s geared to seniors, I can’t believe this is limited to Florida,” Corona’s father and partner, Ricardo, said. “The servicers are not even based in Florida, so I don’t see why they would limit themselves.”
Corona admits he didn't expect a hard fight when he first reviewed El Hassan's case, but court records show he was wrong. Over the last 10 months, the ongoing litigation yielded two hearings, 40 docket entries and attempts by both sides to collect attorney fees.
When he first met El Hassan, Corona expected the plaintiff would realize the error and dismiss the suit. Without charging her or entering a notice of appearance, he placed a phone call to plaintiffs lawyers at Robertson Anschutz & Schneid in Boca Raton to say El Hassan had never moved out of her home.
Robertson Anschutz & Schneid did not respond to requests for comment, but court records show they ratcheted up the litigation with a motion for an order to show cause weeks after Corona's phone call.
"I looked at the document. I couldn't believe it," Corona said. "I was in shock (at) what the bank was trying to do."
***[F]lawed representations permeate an industry where real estate debt routinely changes hands through systems and processes that create a myriad of challenges in foreclosure cases. When reverse mortgages trade, elderly borrowers sometimes fail to realize the change. As new lenders mail postcards and letters requiring seniors to return the documents and certify occupancy, clients struggling with cognitive difficulties are especially vulnerable to technical defaults.