[NYTr] Amerika: Sub-Primed and Locked Out

[All the News That Doesn't Fit]

Public Citizen - Oct 24, 2007
http://www.citizen.org/pressroom/release.cfm?ID=2532

SUB-PRIMED AND LOCKED OUT

Homeowners Facing Mortgage Foreclosures Denied 
Constitutional Right to Proper Notification

Appeal Argues That Maryland’s System for 
Home Foreclosures Tramples Due Process

WASHINGTON, D.C. – Maryland resident Joyce Griffin lost her house in a
foreclosure sale because she did not receive notice until it was too
late for her to save her home. Her case is a stunning example of how
predatory subprime lenders, a fast-track foreclosure process and a
hands-off legal system can combine to wreak havoc on people’s lives.

Griffin’s mortgage company, the now-defunct Ameriquest, tricked her
into refinancing the home she owned, when, after her fiancé died, she’d
simply wanted to have his name taken off the mortgage. When the single
mother could no longer make the increased mortgage payments, a law firm
dedicated to foreclosures representing Ameriquest quickly began
proceedings. After they made a bare-bones and unsuccessful effort to
notify her of any pending action, Griffin lost her home when it was
literally auctioned off on the courthouse steps. She only learned that
her home had been sold when the new owner tacked a note on her door.

Griffin immediately hired a lawyer to block the sale, arguing that the
notice procedures violated her constitutional right to due process, but
the court upheld the lender’s actions.   Public Citizen and
Baltimore-based Civil Justice Inc. are appealing that decision.  In a
brief filed Oct. 23, Public Citizen attorney Deepak Gupta argued that a
2006 U.S. Supreme Court decision requires that additional reasonable
steps must be taken to notify a property owner if a foreclosure notice
is returned as unclaimed by the post office. But the lawyers who
conducted the foreclosure of Griffin’s house said they could ignore
undelivered letters and did not have to make any effort to follow-up
before selling someone’s house.

In the brief filed in the Court of Special Appeals in Maryland, Gupta
also argued that the U.S. Constitution and the Maryland Declaration of
Rights both require “at a minimum” that the “deprivation of life,
liberty or property…be preceded by notice and opportunity for
hearing.”   No property interest is more important than home ownership,
yet Griffin’s home was put up for auction after a half-hearted
notification attempt by Ameriquest’s trustees consisting of several
certified letters, all of which were unclaimed and returned to them by
the post office.  

If Griffin had been a defendant in a small-claims case, a property tax
foreclosure, a federal tax foreclosure or even a tenant in an eviction
proceeding, the law would have required that the documents be served in
person, sent via restricted certified mail (complete only upon
delivery) or be posted by mail-and-nail notification in which the
mailed documents are also posted directly on a dwelling’s door. Even in
a routine debt collection action, Ameriquest’s mishandling of Griffin’s
case would have violated her constitutional rights. 

“People are waking up to the reality of predatory subprime mortgages,
but what they may not yet realize is the one-two punch of shifty loans
and shiftier foreclosure firms that can knock them right out of their
homes,”    Gupta said. 

“We hope that Maryland’s new Home Preservation Task Force becomes the
first step in fixing an unjust system in desperate need of reform,”
said Phillip Robinson, executive director of Civil Justice Inc and
Griffin’s attorney in the trial court.

READ the brief.
http://www.citizen.org/litigation/forms/cases/CaseDetails.cfm?cID=433