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CHRONOLOGICAL ACCOUNT OF EVENTS: |
CHRONOLOGICAL ACCOUNT OF EVENTS:
EASTER SUNDAY, MARCH 2005
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1. We viewed a 38 acre farm that was for sale in southwestern
Virginia.
This was 3rd or 4th property, after extensive real estate research,
that we had looked at in this area. We had decided a number of
months back that we would retire in this area. During our visits to
this area we also visited several financial institutions making
inquiries as to getting a bridge loan or financing the property we
wished to purchase. The answers to our inquiries were all similar,
in that, since we were out-of-state and owned property in that state
with considerable equity in said property we should go to our
current mortgage holder and take the equity out (even though we
wanted to sell that property).
APRIL, 2005
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2. Back in New York, we decide we wanted to purchase the 38 acre
farm and make that our retirement home.
On or about April 5th we visited the Fishkill, NY branch of Wells
Fargo Home Mortgage Inc., our current mortgage holder by buyout in
2001. Upon reviewing our credit line, interviewing us about the
house (value, location, etc.), she recommended that we refinance the
property for $650,00 that would pay off all existing mortgages and a
cash out to purchase the property in Virginia. She knew that we
were selling this property. She then assured us that the refinance
would be easy because of our excellent credit and also that we
should be able to close on the refinance in about two weeks. We
told her to go ahead with the loan application and she gave us the
mortgage approval letter, dated April 6, 2005, so we could go to
contract on the Virginia property.
APRIL 8, 2005
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3. Sign the contract to purchase Virginia property with a closing
date of May 25, 2005. We are now committed.
ON OR ABOUT APRIL 28, 2005
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4. After we signed the purchase contract and prior to this date we
had on several occasions attempted to contact the mortgage broker
regarding the status of our loan application (an application that we
had never received a copy of nor did we ever receive a Good Faith
Estimate (GFE) for this loan). It was during this period we
discovered the elusiveness of our mortgage broker. On or about this
date of April 28th, we were informed by our mortgage broker that we
were turned down for this particular loan plan and, of course, she
was just as "Shocked" as we were. She told us that the mortgage plan
that she had applied for "changed the terms of the plan" and this
made the cash out that we were seeking too much for this plan. When
we questioned if a lender could just change their conditions at will
she said "Oh, it's done all the time". This set back now put us in a
time crunch, it was less than a month to closing.
5. We felt it was too late to go elsewhere for a mortgage so we
asked the Wells Fargo broker what could be done. Naturally, she had
an alternative plan all figured out. We would refinance for
$522,000 and do a home equity line for $150,000. Feeling that our
backs were against the wall because of the purchase contract closing
date we authorized her to apply for this alternative plan, again
with her assurance that we would would have the approval with plenty
of time to spare.
MAY 3, 2005
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6. Signed and returned the Wells Fargo counter offer. The counter
offer's interest rate actually was lower (6.125%) than the original
plan applied for (6.75%). We delusionally thought things were now
"on track". Both offers were ARM type of loans, but since we were
selling the mortgaged property, we did not think of an ARM adversely
nor think to question why it was an ARM in the first place. We had
previously refinanced the property and always had a fixed rate.
MAY 9, 2005
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7. Another delay and only two weeks to closing. The underwriter has
decided to question an item on the appraisal report regarding the
reshingling (not replacing!) of the carriage house roof (an
outbuilding!). They had to know that it was more than 80% complete
the appraiser had said 50%. The appraiser wouldn't come back out
without authorization from our broker, our broker was once again
missing in action. After several screaming phone calls and faxes
from our end, the appraiser finally came out to recheck and pass the
roof work. She blamed the mortgage company, the broker blamed the
appraiser. The appraiser called us to tell us she got fired.
Strange. Our seller meanwhile was now questioning if this deal was
going to go through, he claimed to have another interested buyer.
More pressure.
MAY 13, 2005
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8. Finally, received commitment letter from Wells Fargo for $522,000
and based on this got the seller's closing attorney to extend the
closing date. We did, after all, still have to be approved for the
home equity line. Without the home equity line, the $522,000 was
actually useless since it did not give us the necessary funds for
closing. So we were still concerned about our ability to finalize
the transaction. We told the seller that upon closing the refinance
we would give him a 10% good faith deposit ($30,000). Our primary
concern in reviewing the preliminary papers was that (1.) there was
no early prepayment penalty, since we were selling the property that
was a big concern and (2.) all the existing mortgages were listed to
be paid off at closing (there were 2 with HFC and the Wells Fargo
mortgage with a balance of $143,409.56). May 16th was set for
closing.
MAY 16, 2005
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9. We met in the offices of Wells Fargo's settlement agent, Dominic
J. Penzetta, expecting a conventional refinancing procedure as we
had experienced with prior refinancings. Also present was a
representative from the title company, an Ellen Juracek, of River
City Abstract. Ms. Juracek came prepared with 3 payoff letters
including one from Wells Fargo for the outstanding amount of
$143,409.56 and was prepared to disburse the funds for each of the 3
loans. The HUD-1A Settlement Statement also reflected the
directions of the committment letter for 3 disbursements to be made
to pay off the 3 outstanding loans including Wells Fargo. Then to
our surprise and confusion, Mr. Penzetta presented us with 2
mortgages, one mortgage for $380,346.31 and one "consolidated
mortgage" for $522,000.00. Upon hearing this, Ms. Juracek became
flustered and agitated, evidently she was no more prepared for this
than we were. Mr. Penzetta left to make a phone call and upon his
return made a statement to the effect that's how we were doing it.
We signed both mortgages and all related paperwork. (Note: Penzetta
did not even stay through the closing procedure. He signed the HUD-1
Settlement and left, letting his associate or assistant to finish
the closing). At this point we had no alternative to sign, or
loose the Virginia property, and Wells Fargo knew that.
10. Also at closing, we were presented with the Truth in Lending
Disclosure Statement dated May 16, 2005, the same day as the
closing. This statement showed the loan amount to be $522,200.
This amount affirmed to us that we were indeed getting a refinancing
(all new money in one package, one note, one mortgage) for
$522,200.
11. After the 3 day recission period we notified our broker to go
ahead with home equity loan.
LATER IN MAY, 2005
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12. Received a certificate from Wells Fargo dated May 23, 2005
acknowledging receipt of funds submitted as payoff for the loan of
$143,409.56, with a seperate letter stating that the satisfaction
would be filed with the County, which was never done. Relieved
that the loan was paid, we didn't give it a second thought until
Wells Fargo attempted to foreclose on it a year and half later. At
the time of receiving the payoff letter we were still anxiously
waiting for approval of the equity loan so we could close on the
Virginia property.
JUNE 10, 2005
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13. Finally, signing paperwork for the equity loan (actually, an
equity line of credit) with very mixed feelings. Happy and relieved
that we will actually be purchasing our retirement home. Dismayed at
the terms of the equity line of credit. The initial Annual
Percentage Rate of 6.875% sounded good until we read further down
the page that the "Daily Periodic Finance Charge Rate...will be
adjusted the day of an Index Rate change..." and further on "The
Annual Percentage Rate...will never be more than 18%". And, we'll be
paying "interest only" for ten years. We were certainly never told
there would be terms such as these. Without this loan, the deal is
dead. We have already extended the closing date on the VA property.
JUNE 20, 2005
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14. Closed on the Virginia property.
MID-JULY, 2005
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15. Signed a four month contract with Weichart Realtors to sell NY
house. Decided on Weichart because it is a large company with
national exposure and we thought they understood the importance of
advertising and promoting the house in the right market, mainly the
New York Metro area, and we both signed a working understanding
agreement. Thinking we were in good hands, expecting no problems in
selling the house, we proceeded to begin moving our possessions to
Virginia. Bought our own moving truck and planned on making monthly
one week trips.
MID-OCTOBER TO EARLY NOVEMBER 2005
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16. Not happy with Weichart. They have yet to advertise in the New
York City market or Westchester County as agreed upon. Advertising
has been mostly local. They won't do more advertising until we
extend the contract. Their office manager will not agree to any
written commitment to specific advertising, she drops our contract.
We have been fired by our realtors. We are amazed that someone
would casually throw away the potential to earn $50,000, plus we
lost the Summer and Fall, 2005 real estate market.
LATE NOVEMBER, 2005
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17. Hire new realtors. Tried independents this time, young couple,
very enthusiastic. For 6% commission, they offer to do some work in
the house, claim they will bring in a crew. Also offered, as part
of service, to help move things out of the house and help load our
truck.
EARLY DECEMBER, 2005
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18. New realtors are very pushy, want to do way more than needs to
be done. Ripped up wall-to-wall carpeting in the living room.
Their help turned out to be their family, a brother-in-law and their
two underaged children (boy, about 10, girl, maybe 8) and someone
who may have been a cousin. They had the children pulling up the
hundreds of carpeting nails. They also let the children run around
the house and property unsupervised, and the father encouraged his
son to jump from the carriage house loft, about 12' and then had him
scale a partially sawn tree in order to topple it. Very unorthodox
behavior, but we humored them because they were so positive about
being able to sell the house. Of course we were the ones to finish
the work on the floors, living room, pantry, dining room.
MARCH, 2006
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19. Mid-March, Jean and the cats moved permanently to Virginia.
Also, starting to question the realtors. They seem to have lost
their enthusiasm, now claim the house needs more work to sell at the
asking price, focusing their attention on the kitchen. This is a
big change in attitude from November, when they loved the house and
said don't do anything about the kitchen, referred to it as "a blank
slate" and that anyone buying the house would redo the kitchen
anyway. They are getting very defensive when we ask for
documentation for their advertising and promotion because they are
making fantastic claims and we quite frankly don't believe them.
They havevn't shown the house in a few weeks (maybe, a month).
APRIL, MAY, AND EARLY JUNE 2006
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20. Realtors claim to have someone interested in the house, two
doctors. They are pretty positive the doctors are about to make an
offer. Good thing, money is getting tight. A friend offers to help
us, she has a CD maturing and is looking for a better deal. We
offer her 12% on a $25,000 loan to be paid at closing of the house
sale or one year whichever comes first. Scott gives her personal
financial information, for her eyes only, showing in incremental
stages that even if we had go as low as $800,000 for the house,
there would still be enough profit to cover her loan. She asked if
she could consult an attorney. Scott agreed and on the way to the
attorney's office she stated that he, the attorney, would like to do
our closing. At the office, after Scott agreed that the attorney
could have the closing, the attorney whipped out a copy of our
financial information that we had asked our friend to keep
confidential. Scott was unnerved by this but figured since the
attorney was an "officer of the court", he would protect this
confidential information. Our friend gave us $6,000 on the loan but
did not give us the balance until May. In the meantime we find out
from the realtors that they have not heard back from the doctors.
Tired of these "false hopes" from these realtors (the doctors were
not the first), tired of their gross exaggerations of where they
advertised and how much they spent without producing any
documentation, on June 12th, we chose not to renew their contract.
They had already gotten a one month extension because we thought the
"doctors" were going to make an offer. Now we had lost the Spring
2006 market. (This will not be the last that we hear from these
brokers.)
21. During the winter and spring of 2006, the time Scott spent in
Cold Spring was used not just to finish sorting and packing but he
also restored the 2 bedrooms, a bath and a bonus room on the third
floor to a habitable condition. In 2005 the appraiser for Wells
Fargo discounted the third floor because it needed a lot of work and
referred to it as an attic and did not include the square footage in
the report. It appraised at $868,000. After Scott finished the work
it added an additional 600 sf+/- to the house bringing it back to
its original square footage of 3080 sf(as recorded at the tax
assessor office) and 2 and 1/2 stories not 2 plus an attic as the
appaiser had it. We did not raise the price of the house to reflect
this work, as it was more important to us that we get a buyer.
MID-JUNE, 2006
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22. Totally disillusioned and wary of realtors, we decide to sell
the house FSBO, we had sold two other properties in Cold Spring
ourselves and both sales went smoothly, no road bumps (no realtors,
no attorneys). Scott immediately started to have Open Houses on the
weekends. June 18th, during the Open House, a couple come by and
were quite taken with the house and by evening they had come 3 more
times to see the house and speak with Scott. During the last visit,
they stated they wanted to buy the house. Scott referred them to
Wells Fargo, the same broker we used, figuring since we had the
appraisal from them and they were familiar with the house it might
be easier for a buyer to get a mortgage from Wells Fargo.
JUNE 20, 2006
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23. Scott contacts the potential buyers and offer them the house for
$817,000 (we had been asking $869,000) if they agreed to take the
house "as is". They agreed.
JUNE 21, 2006
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24. Receive a pre-approval for the buyers from Wells Fargo. The
buyers were planning on 50% financing. Scott begins preparing a
punch list of items to be included in the "as is" terms. Scott is
still marketing the house at this point.
JUNE 24th THROUGH JULY 3rd, 2006
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25. During this time period, the buyers returned to see the house
bringing friends to show them their "new home". They also brought a
large, heavy woodburning stove and put it in the carriage house.
They planned to use this to heat the carriage house. Scott took the
buyers and introduced them to the neighbors, next door and across
the street, as being the buyers of our house.
26. There were further phone calls between Scott and the buyers
ironing out details of the "as is" terms, how they were financing
the purchase, etc. Scott emailed the punch list (disclosures)
including the underground oil tank. On July 3rd the buyers, via
email, confirmed they had read Scott's email and were "aware of the
items you listed in regard to the house".
JULY 6, 2005
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27. We had the attorney prepare the contract and send it to the
buyers' attorney. The buyers came with the house inspector, not the
original one who supposedly cancelled at the last minute, but
someone they claimed to have found online and happened to be
available that day. We don't know why they didn't just reschedule
their original inspector. The story didn't sit well with Scott.
28. The inspector never talked to Scott after Scott informed him we
had a inspection done in Sept. 2005. He expressed interest in other
inspectors' reports but he never asked for a copy and he never asked
Scott any questions about the house. He nor the buyers said anything
about doing a radon and mold tests. The inspector spent most of his
time mumbling things to the buyers, making dire statements to the
them like "We have to talk" and sitting on the front porch (as
observed by the neighbors across the street) writing his "report".
(This porch that he spent so much time he didn't even acknowledge in
his report. He put a big"X" through the section on porches.)
JULY 10, 2006
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29. Buyers meet with their attorney. From this point on, the buyers
no longer communicate with us, don't return calls.
JULY 11, 2006
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30. Buyer' attorney sends a "purchasers' rider" to our attorney. We
were upset with this rider because it reiterated many items that
were clearly expressed in the contract but mainly because buyers'
attorney changed the financing terms from 50% to 80%. Our attorney
will only say that these riders are normal in negotiating contracts
and never pointed out the change in financing. We were upset at
this because it meant the buyers had to show they could afford this
change. Based on conversations Scott had with them they had wanted
to avoid the high monthly payments an 80% mortgage would bring
about.
JUNE 14, 2006
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31. Buyers' attorney sends a signed contract and deposit check to
our attorney but he does not inform us of this. We still think
contract is on hold because of the purchasers' rider.
JUNE 15, 2006
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32. Buyers receive results of environmental testing.
JUNE 16, 2006
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33. Jean sends email to buyers complaining about the redundant
points in the puchasers rider but more importantly, to question them
about the change in financing and requested a new preapproval for
the $653,600 quoted in the rider that would supercede the $408,500
as stated in the contract.
JULY 17, 2006
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34. Buyers attorney alledgedly sends a letter via fax to our
attorney requesting him not to execute contract because of problems
found as a result of environmental testing (mold tests). (We were
never informed of this situation by our attorney until October 17,
2006, long after the deal was killed, therefore, our accusation of
"alledgedly", because of the time element, the fact that we were
questioning our attorney's actions and he claimed to no longer have
any papers in our file, except conveniently this particular letter.)
35. Called our broker at Wells Fargo telling her of the change in
financing. She called the buyers who willingly agreed to the pre-
approval at 80%. When she called us back, she told us that the
"...M-----s were waiting to sign the contract." (According to their
attorney they had signed it on July 14th!).
36. Sent fax to our attorney informing him of our contacting Wells
Fargo and their contacting the buyers who agreed to the 80%
preapproval. Also stated in detail all the reasons why we can't
approve the rider. He never called or wrote back anything about
having received a signed contract and deposit check or of buyers
attorney's letter requesting him not to execute such. We still
thought we were in the negotiating stage of the contract. Why did
the buyers agree to a new preapproval when their lawyer put
everything on hold?
37. The next time Scott spoke with our attorney, either that day or
the next, the only thing he told Scott was that the mold test came
back and that it was "very serious problem".
JULY 20,2006
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38. Faxed our attorney that Wells Fargo had faxed to us the new
preapproval for $653,600 and then requested that he send us a copy
of the "mold" report.
39. We receive a faxed copy of the mold report that is totally
illegible. Request that he have the buyers attorney mail us the
mold report hoping it would be more legible and that we could not
comment on something we couldn't read.
JULY 22, 2006
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40. Buyers withdraw their offer based on the "findings" in the
inspection and the mold report. They did say that if we would
"remediate" some conditions they would still "be interested in the
house". They would have their attorney send us the mold report.
41. Considering that the buyers had agreed to "as is" conditions to
purchase, we were concerned as to what could possibly have been in
the inspection report that caused the buyers to withdraw. So, we
asked the buyers for a copy of the inspection report so we could
"remediate".
JULY 31, 2006
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42. Scott received copy of inspection and environmental reports.
AUGUST 3, 2006
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44. Our attorney sends us a letter notifying us that he "shredded"
the signed contract and returned the check (the FIRST we had heard
about either one) as per buyers attorney's request of August 1, 2006
to destroy the documents and return the check. We were speechless,
we hadn't even had a chance to review the inspection reports. Why
the rush to terminate? Why "shred" the contract?
AUGUST 4 THROUGH AUGUST 12, 2006
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45. Researched the inspection report, compared it with prior
inspection report of September 2005, did extensive research on the
Internet regarding radon and mold.
AUGUST 13 THROUGH AUGUST 18, 2006
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46. Composed and documented a rebuttal to the inspection report, the
radon test (which was done incorrectly) and the mold test (the
inconsequential results of which the buyers had totally over reacted
to). We used the September 2005 inspection report, our personal
knowledge of constuction, electrical and plumbing systems, our 22
year knowledge of the maintenance of the house and a number of
statements from the NYS environmental website and the EPA. In our
letter we left the door open for the buyers by inviting them to make
an offer based on what they thought the house was worth.
Mailed letter on August 18, 2006.
AUGUST 22, 2006
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47. Buyers received letter. Prior day, August 21st, letter was
received by our attorney and the buyers' attorney.
Scott is doing Open Houses again. We had stopped marketing the
house when contract was prepared. After Scott's numerous
conversations with the buyers prior to contract, everything semmed
to indicate this was a deal that would go to closing quickly.
Buyers still had their woodburning stove in our carriage house.
Summer was wasted in attempt to sell house.
SEPTEMBER 14, 2006
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48. Having not received any acknowledgement of our letter sent
August 18 2006, from any of the parties we sent it to (including our
lawyer who one would think would be interested on our behalf), we
then sent a letter to the buyers telling them to remove their stove
from our property.
49. Probably more upset that our attorney showed no inclination to
help us salvage this deal or even respond to the findings of our
letter of August 18th, we sent a letter to him. In this letter we
questioned him about why we were never told about any signed
contract, about a deposit check, why he destroyed a contract without
our permission or even knowledge, why he informed us of the
destruction only after the fact and other issues that we were upset
about.
50. Sent a letter to our broker at Wells Fargo informing her that
their was no evidence that this sale was to be recouped and that we
were not able to continue paying the mortgage on the property and
asked her as to whom we would talk to at Wells Fargo regarding this
situation.
MID-SEPTEMBER TO DECEMBER 20, 2006
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51. This period was spent dealing with Wells Fargo and trying to
sell the house. Scott spent every weekend doing Open Houses. There
was considerable interest and Scott sent all interested people to
our broker at Wells Fargo. At this point, we did not see any reason
not to and thought it was a good idea since she was familiar with
the property. (It wasn't until after the foreclosure action was
initiated that she mentioned to Scott that her daughter buys
foreclosures. We were aghast at this information considering her
intimate knowledge of our situation.)
52. We also sent 150 invitations to area realtors offering to
co-broke at 3%, or 4% if they brought a buyer before the end of the
year. A few brokers were interested in working with us, oddly
enough, not one from Cold Spring. We heard from 3 different sources
rumors that the "house had failed an inspection" and the house had a
"lot of problems". That latter statement came from two people
discussing the house while in line at Walmart. Our neighbor
overheard the conversation and when he challenged them on their
statement, they admitted they had never even been in the house. His
response was that he knew the house well and there was nothing wrong
with it and they should stop spreading rumors.
53. So, now the house is obviously blackballed among the local
realtors. None of them were willing to take a 3% co-broke, everyone
we spoke with wanted the listing at the full 6%, so they will just
bad mouth the house when anyone asks to see it. We had a couple
interested in the house in February 2007 and they told us they had a
local realtor show them some houses in the village. When they asked
the realtor about our house, they were told it had "a lot of
problems". The couple told us, after seeing our house, that our
house looked brand new compared to the house that the realtor showed
them. We were familiar with that house they were shown, it had some
structural problems among other things.
54. We spent a lot of time on the phone with Wells Fargo collections
repeating our story over and over, each time to a different person.
We learned that people at Wells Fargo apparently only have first
names and that they don't assign your case to one person. We were
directed to send a "hardship" letter to loss mitigation, that Wells
Fargo wasn't interested in taking our house, that they would work
with us, etc. We sent the letter detailing our situation, giving
them our income and other assets, little as they were at this
point. We asked them if they would freeze payments on the mortgage
until the house sale was complete. Our intention was that all back
interest, taxes, late fees would be settled at closing because there
was sufficient equity in the house to do this. This did not to us
seem to be an unreasonable request. We thought being honest about
our situation would be beneficial to us. We would later find that
honesty is not the best policy.
55. Upon inquiry, we were told it took 30 to 45 days to set up a
"file" and assign someone to set up an account for us in loss
mitigation. Further inquiries led us to find out that loss
mitigation repeatedly couldn't find our hardship letter.
56. Our frustration at Wells Fargo's incompetence (deliberate?)
earned us the tag of "uncooperative" even though we took their
almost daily phone calls answering their same questions. We probably
earned the tag because we started pressuring them for their names,
their supervisors' names, why they couldn't find our hardship letter
even though they acknowledged having received it, etc.
57. In early December we received a letter dated November 29th, from
a Steven J. Baum, PC stating that he represented Wells Fargo Home
Mortgage, Inc. The letter stated what we owed and gave us 30 days
after receipt of letter to dispute the validity of the debt.
Apparently, the "30 days" time period to dispute meant absolutely
nothing because on December 15, 2006 the summons and complaint was
filed.
58. On December 20th, Jean was wrapping Christmas presents when a
process server came to the house in Virginia and served her with a
summons and complaint (dated 12/15/06) to foreclose. Was it really
necessary to serve these papers 5 days before the Christmas
holidays? That was on Thursday afternoon apx 4:30 and with most
attorneys taking the next day, Friday afternoon off, the weekend
immediatly before Christmas on Monday and the entire Holiday week,
followed by the following weekend, really leaves only four days for
an attorney to respond and answer the suit within the twenty day
deadline. Considering the time off from work taken by most people
during this period, it would have been difficult to find an attorney
within the time frame given to respond to the complaint. (Perhaps
that was the intent?)
JANUARY - APRIL 2007
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59. Scott spent the winter in Virginia responding to court papers.
He left keys to the house with friends and neighbors who constantly
made sure all was well with the house as well as showing the house
when someone expressed interest. Scott had left fliers out front
that included our Virginia phone number. It was the winter and not
much real estate actvity.
60. Stress has taken its toll on Scott. This winter he has had
progressively worsening breathing problems and a cough. When he
returned to NY he was so sick that he had to seek medical
assistance. Turned out his blood sugar was very high as well as his
blood pressure, the doctor thought Scott was on the verge of a heart
attack. Medications improved the situaion.
THE FORECLOSURE LAWSUIT:
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61. Right up front, on the first page of the complaint, the
Plaintiffs make their first erroneous and misleading statement,
saying that in August, 1995, we entered into a mortgage for $162,000
with "MERS AS NOMINEE FOR WELLS FARGO HOME MORTGAGE, INC". Wrong.
In 1995, First Union was the holder of the mortgage and in May, 2001
FIRST UNION sold the mortgage to "MERS, etc.".
62. This was our first inkling that the $162,000 mortgage was still
"on the books". We had received certification from Wells Fargo that
it was paid back in 2005. Why were they going back to the 1995
date? We started researching the papers we had from the May 16th,
2005 transaction, the events and paperwork leading up to the
transaction and the records at the Putnam County Office in NY.
63. We discovered, that indeed, the $162,000 mortgage from 1995 was
still listed, that it was not satisfied. We found that the
"consolidated agreement" distinctly states that "under the law
Lender has one mortgage and I have one loan obligation..." and "the
Consolidated Mortgage which will supersede all terms, covenants,
and provisions of the Mortgages." This was what we had signed on
May 16, 2005, and it was witnessed as well. It is also recorded in
the Putnam County records that "by an Agreement recorded on the
20th day of June, 2005...to form a single lien in the amount of
$522,200." If these statements are all true as stated why do the
Plaintiffs refer back to 1995?
64. We challenge them on this point, charge them with fraud and
deceipt for the manner in which they sucked us in to this type of
agreement, the last minute switch to a loan for $380,346.31 when we
thought we were getting a loan for $522,200. Then to present us with
a consolidated mortgage agreement which supposedly did nothing more
than take the $380,346.31 and our already existing mortgage balance
($143,409.56) and combine them. We also noted that the HUD-1
Settlement form very clearly stated in "Item M. Disbursement To
Others", line 1501, Wells Fargo Bank, N.A., $143,409.56. It also
stated in the Wells Fargo commitment letter, dated May 13, 2005,
that "the following conditions must be SATISFIED (our emphasis) at
the time of closing", "Payoff all liens of record against subject
property".
65. This deceipt included changing the original mortgage plan
applied for at a late enough date that we were compelled to accept
the new proposed plan for smaller mortgage plus equity credit line.
This equity line, although held by Wells Fargo and was part of the
package, is secondary to the primary mortgage that they are
foreclosing on. They named themselves as Plaintiffs on the original
complaint. We challenged that. We challenged them on a number of
other points, such as the timing of the filing of the foreclosure
action, et al.
66. The Plaintiffs responded with a "Notice of Summary Judgement and
Order of Reference". Included was an "Affidavit" from a Sean Nix,
who claimed to be a Vice President Loan Documentation of Wells Fargo
Bank, NA and who claimed to be "fully familiar with the facts and
circumstances of this present foreclosure action". His affidavit
was used primarily to put down all our defenses as meritless. As to
our request to combine the mortgage and the credit line as being
part and parcel of the deal as proposed, Mr. Nix's response was "As
such, Defendants' request to consolidate the two separate loans is
unlawful...". (Yet, it wasn't unlawful when they did it and did it
without telling us beforehand?) Mr. Nix naturally blew off the
accusation of predatory lending and then proceeded to state that the
mortgage being foreclosed had been approved with an interest rate of
6.125% and "which is in no way considered an exceedingly high
interest rate". (Of course not, but what he failed to tell the
Court is that the mortgage was an ARM! By omitting this he was
making us look unreasonable to the Court.) Mr. Nix further attempted
to influence the Court by claiming "laches" based on the 1995 date
of the $162,000 mortgage and falsely stated that "after eleven years
that the origination of the same was not what they expected" and
that we were "merely attempting to extend their right of
rescission". He further stated that we "elected to regard the
contract as valid until they themselves were sued under this
mortgage". All these statements support our claim that they were
suing us on the $162,000 as the terms of said mortgage were in 1995
as opposed to the fact that the 2005 consolidated agreement and
mortgage stated that there was now one lien and one loan
obligation.
67. Mr. Nix went on to use language that would color the Courts view
as to our statements of fact. Our statements regarding our selling
the house, that it had been on the market prior to foreclosure and
that it had actually sold but that the contract fell through were
referred to by Mr. Nix as "Defendants allegation that the property
had been listed for sale...". Mr. Nix attempted to further
influence the Court with the totally false statement, "...in an
effort to buy a vacation home" when we had made it perfectly clear
that we were 1.) selling the home that was refinanced and 2.) we
were moving into the home we were purchasing, that it was to be our
retirement home. These two facts were well known to the Wells Fargo
broker, Marcia Frances who designed the mortgage and equity line
package and all the many different people who called from Wells
Fargo collections. At one point in discussion of the mortgage and
the equity line of credit as being two separate documents, Mr. Nix
blatantly lies by saying that we "requested" the two loans.
68. In an "Affirmation of Regularity" the Plaintiffs state that in
reference to the original $162,000 mortgage from 1995 which was
"duly assigned by assignment" in September 2001 and "Said mortgage
is to be assigned by an assignment to be recorded in the Office of
the Clerk..." This abovementioned document that was "to be recorded"
was attached and this was the first we knew of such a document, the
assignment was dated as being effective December 1, 2006. That is a
year and a half from when the consolidation agreement was executed,
a year and a half from when we received certification that it was
paid off. In that year and a half MERS still held the assignment
from 2001. If we had not been driven to foreclosure, would MERS
still be holding the assignment? How could there have been a
consolidation if Wells Fargo did not have the assignment? Obviously,
they needed it in order to foreclose, therefore the date of
12/01/06. If Wells Fargo paid it off as they claim, how come MERS
still held the assignment up until 12/01/06?
69. In the next paragraph they refer to the $380,346.31 mortgage
from May 2005 as being consolidated with $162,000 and once again "to
form a single lien".
70 .In the "Affirmation In Opposition To Defendant's Cross
Motion...", compiled by one Tracy M. Fourtner, Esq., this attorney
continued to sully our actions and intentions and continued to make
blatantly false statements drawn from their opinion from which they
made conclusions. This was all done to distract the judge from
misdeeds on their part.
71. Plaintiff extracts, out of context, a statement from our
"hardship letter" that "we refused to complete the borrower
financial information form". They fail to include our, 1.) reason
for not signing the form, and, 2.) the fact that we included the
required financial information with the "hardship letter"and signed
said letter.
72. In another paragraph, the Plaintiff quotes that "Defendants
applied for a mortgage loan with the Plaintiff amd the Plaintiff
granted said application for the combined/consolidated amount of
$522,200." This falsely infers that we applied for a
"combined/consolidated" mortgage. This is the second such
inference.
73. The Plaintiffs drew their own conclusion for the Court in that
we "...had an interested purchaser in the property, negative results
of radon and mold testing caused the contract to fall..." and that
we "...have not been able to enter into a contract of sale since
that time." The implication, of course, is that we have problems
with the house. Naturally, there is no mention of our 16 page letter
toally debunking the inspection and environmental reports nor of the
fact that there was a lawsuit pending against parties involved in
that lost sale. Nor do they refer to the "negative results.." as
alleged, they had no idea of the facts yet they dare to make
statements of fact.
74. They also emphasize the fact that it has been on the market
since July, 2005. They reiterate, for further impression, their same
concocted conclusion several pages later when the Plaintiff states
"the reason they are having difficulty selling the Mortgaged
Premises is based upon negative reports after the investigation for
radon and mold". Again, no allegations, just a bold statement
without documentation. The Plaintiffs were busy acting as their own
judge and jury. Their misleading statements were deliberate in
intent to make us look bad in the eyes of the Court.
75. The boldest deceitful statement is the one that states that we
have been in possession of the mortgaged premises "rent-free" (bold
and underlined). We made it perfectly clear in our hardship letter
that (at that time) there was more than enough equity in the
property so they would get their back interest, etc. that was due
them.
76. Notable Point: Exhibit A of the CEMA, in reference to the
$380,346.31 mortgage executed on May 16, 2005:
"This Mortgage is on a Fannie Mae/Freddie Mac Security
Instrument and will be recorded together with this
agreement."
In reference to the $162,000 mortgage executed August 24, 1995:
"This Mortgage is on a Fannie Mae/Freddie Mac Security
Instrument and will be recorded together with this
agreement."
Would these statements be applicable if Wells Fargo had granted the
$522,200 refinancing (a jumbo loan) that we had applied for and
thought we were getting until May 16, 2005 the day we closed?
77. On April 26, 2006, the judge called for a conference so Scott
returned to NY. Said conference was a joke, the judge merely took
the papers on submission, there was no conference.
THE DECISION AND ORDER, APRIL 27, 2007
______________________________________
78. Note the date of the decision is but one day after the supposed
"conference". What was the point of that charade? Or was the
Decision and Order worked out ex-parte? This was in a case
involving two lengthly affidavits submitted on behalf of Wells
Fargo, two lengthly affidavits and an answer by us, and a cross
motion, with both parties submitting over 40 involved exhibits, and
331 detailed paragraphs in all the submitted affidavits.
79. The judge, the Honorable Andrew P. O'Rourke, naturally found in
favor of Wells Fargo primarily because we admitted that we were in
default. It evidently made no difference that there were many, many
serious questions that needed to be addressed as to the legitimacy
of the mortgages and the manner in which they were executed. The
judge used our own words from our loss mitigation letter to hang us
with. So much for honesty with Wells Fargo. Ignored was our timely
submitted Demand for a Bill of Particulars and discovery, filed
before Plaintiff's rush to file the motion for summary judgement.
Ignored was our lengthly Answer which was treated only as a "limited
notice of appearance", and ignored the merits we had raised.
80. In his decision and order, the judge determined that we were
correct in that the "$162,000 was satisfied and in not in default"
and that the "$380,346.31 loan and the $150,000 loan are, by
Defendants own admission in default".
81. The judge also wrote as part of his decision that:
"They also obtained a loan in the sum of $150,000 which was
consolidated with the $380,346.31. The total consolidated
loan was $522,200."
82. Since this was the judge's "Decision and Order", based upon the
above statement we chose not to appeal, even though there were many
unaddressed and unresolved issues. The Plaintiffs did not appeal,
and made the notice of entry on June 12, 2007. This ruling then
became "the law of the case" and "res judica" meaning that it
became the official rule.
BACK TO HOUSE SALE, FEBRUARY - MAY, 2007
_______________________________________
83. The second set of brokers, the "enthusiastic couple" resurfaced
in mid-February 2007 when they called to tell us of a couple who
were very interested in the house. The realtors were not anxious to
co-broke, they wanted the full commission. They said we "owed" it
to them because of all the "work" they did for us on the house and
helping us load our moving van, etc. We reminded them that was part
of their contract set up by their own initiative. They offered a
low ball price for the house that didn't cover the outstanding
loans. The buyer came up slightly but not enough, so we said no.
The brokers then send to our new closing attorney a letter of intent
showing that we had accepted the buyers' offer. They did not send us
a copy. Fortunately, our lawyer called us and we went through the
roof. We called the broker and told him we were going to report
them to the real estate board and that there was no deal, that they
have not represented us since last June. His response, amazingly,
was that whether we liked it or not they did represent us and if we
didn't agree to 5% commission they would put a lien on the house. A
few days later the buyers called us wanting to know why the offer
wasn't accepted. Scott told them the story about the brokers, and
they told Scott that they had found our house listed on Craig's List
and the brokers had listed our house as their exclusive listing. We
checked the brokers' website and sure enough there was our house on
their site as an exclusive listing. The buyers really wanted the
house, we worked out a price amenable to all (this was after the
judge's decision), $760,000. We told the buyers we would have
nothing to do with these brokers, the buyers offered the broker 1%
as a finders fee. The broker was furious, he slandered Scott by
saying that he could tell the buyers about "Scott's mental state..."
and in bold caps "...THE WEBSTERS MUST PAY SOMETHING...". The next
day the front window of our moving van was totally smashed in,
someone had climbed on top of cab (there were footprints) and
deliberately destroyed the window. Scott filed a police report.
84. The buyers lawyer, upon running a title search and finding all
the unsatisfied mortgages, the consolidated agreement, the equity
line, told his clients it was a "difficult" transaction. The
buyers, who knew the whole story about the foreclosure action and
the judges decision still wanted the house, they did an inspection
which showed there was nothing wrong with the house, just normal
maintenance type of work one might expect in a 150 yr. old house.
85. We had accepted the offer of $760,000 only after we had obtained
a payoff letter from Wells Fargo, via the Steven J Baum law firm.
In that letter we deliberately asked for the amounts due listing
both the account numbers of the so-called consolidated mortgage and
the equity line of credit. The amount they came up with us
indicated that, indeed, they had accepted the judge's decision and
order.
85. We asked our new closing attorney to write the contract; he sent
it to the buyers' attorney. On May 18th, the buyers send us a
email, they have to withdraw their offer. They were disappointed
but they had to sell two condos in Queens. The prior Sunday they
had an open house and only a few people came and their broker told
them that it could take more than 5 months to sell, the market was
bad in Jackson Heights. The buyers did not want to overextend
themselves financially.
86. Disappointed, Scott put more flyers out front and had more open
houses. Our hopes were breifly raised when a realtor in Beacon who
was co-brokering with us brought a very interested buyer. She
matched the $760,000 offer and then the realtor couldn't contact
her. Finally almost two weeks later, she surfaced with the
announcement that she had also bid on a place in Brooklyn and
decided to take that one.
JULY - SEPTEMBER, 2007
______________________
87. Scott left keys with friends and neighbors to show the house and
returned to Virginia. The market was really drying up at this point
since there was more and more talk about mortgage defaults,
foreclosures, the sub-prime market, etc. Very few requests to see
house during this period.
88. We were concerned when upon investigating we found that Wells
Fargo had made no move to file a satisfaction on the $162,000
mortgage, so Scott wrote to Baum requesting that they adhere to the
judge's decision and order. They did not respond.
89. We studied the so-called consolidated mortgage, the "assignment"
of the $162,000 mortgage in December 2006, reviewed all the
documents involved in the mortgage transaction and closing and we
still could not come up with a reasonable and legitimate reason as
to why Wells Fargo would construct such a convoluted transaction in
the first place. We kept raising more questions, the more we
studied it.
90. One conclusion we came to was in regard to the first house sale
that fell through. The buyers' lawyer who specialized in real
estate law and handled foreclosures recognized the situation when
she did the title search (before she even received the contract from
our lawyer). It is conceivable that she discouraged the buyers by
telling them our outstanding mortgages added up to more than a
million dollars and that we could never go to closing. (If you scan
the county records it initially looks this way, some professionals
might read it properly.) Since our financial situation had been made
known to our lawyer via our "friend" who made us the loan, the
buyers lawyer would rightfully conclude that we would very shortly
be in trouble. She would then have "arranged" for an inspection
report that would give the buyers a way out. This would explain the
last minute change in inspectors. All she and our lawyer had to do
was sit back and wait. There was at that time more than $300,000 in
equity in the house and the market was still strong. We alleged
this conspiratorial action in our lawsuit against the buyers, both
lawyers and our former "friend".
91. Seeking answers to some of our questions, Scott posed them in a
letter to the attorney, Dominick J. Penzetta, who was the settlment
agent for Wells Fargo and he was the one who presented us with the
consolidated mortgage. Upon receipt of our letter, Mr. Penzetta
immediately called Scott and they spent an hour on the phone
together. A few days later we received a letter from him attempting
to explain (in his words) what a CEMA is and why a CEMA is created.
Well, we know what a CEMA is. But Penzetta's attempted explanation
as to why a CEMA was toally unsatisfactory and not too believable.
Penzetta claimed that:
92."The CEMA is done for the purpose of reducing your closing costs
so that you do not have to pay mortgage tax on the whole amount."
So technically, Wells Fargo screwed Putnam County out of some taxes
by filing a mortgage only for $380,346.31 instead of filing one for
$522,200. But of course, they were "thinking of the customer", and
trying to save us money, some $800. Big of them. This new, and
unsatisfactory explaination was never brought up to us at closing,
nor would we have ever risked future title complications over an
amount of .01% of the total loan amount, which would have been part
of the closing costs.
93. Mr. Penzetta further stated: "Almost every time that there is
a refinance with the same lender this is the way that it is done."
At one time we had a mortgage with HFC and then we applied for
another loan with HFC, they did not consolidate the two loans.
94. In reference to the "mortgage" for $522,200, Penzetta says:
"Exhibit D is not a mortgage"
Penzetta had told Scott during their phone comversation that the
$522,200 "mortgage" was only an exhibit. Well, they had us sign
that "exhibit", and initialled it in all the same places as we did
on the $380,346.31 mortgage. They even it "witnessed" it! What
would stop someone from filing this document as a mortgage in the
future?
95. Penzetta went on to claim that the outstanding amount on the
$162,000 was "closed out by payment" but that the "lien was not
satisfied, because it was consolidated". And, then he tried to tell
us that the letters we received from Wells Fargo stating that the
loan was paid in full was "...probably just a form letter that
referenced a satisfaction in error...".
96. Now, the Wells Fargo commitment letter, the HUD-1 Settlement
Statement both said all prior existing loans are to be paid off.
After closing we receive a "Confirmation of Loan Payoff" that says
"...we have received the funds necessary to pay your loan in full."
It then continues, "We will mail loan satisfaction documents to you
or your county recorder...". Why would we ever think this was an
error? Why would we think to question it?
97. At the same time we sent a letter to Penzetta, Scott also sent
one to the title company of record, River City Abstract, LLC. They
never even had the courtesy to respond.
98. About a week after the Penzetta response, we received a copy of
a letter that the Baum law firm faxed directly to the judge's
chambers. The letter was written by a law clerk and she was telling
the judge there was an "error" in his Decision and Order and then
telling him how it should have read and asked him to change it.
There had been an attachment, but it had not been forwarded to us.
The legal clerk then actually invites the judge to give her a call
if he has any questions.
99. We really were quite astonished at boldness of the law firm in
their attempt to disturb the Court's Decision and Order after the
time to appeal had expired wth no objection by the Plaintiff. Also,
the clerk's suggestion to the judge to "call". Had they previously
conversed without our knowledge?
100. On August 24, 2007 we sent a letter to the judge objecting to
the Plaintiffs actions, demanding they follow procedure and submit
their request through a proper motion and also noted that we had not
received the attachments, and if we had thought that his Decision
and Order could be changed after the matter had been settled, we
would have appealed and stated that if he acquiesced to the
Plaintiffs' request we would then appeal.
101. We were sure the judge would not go along with this unorthodox
request. Wrong! On August 27, 2007, the Honorable Andrew P.
O'Rourke signed an "Amended Decision and Order". He treated the
Plaintiffs' letter like it was a "motion" and in his Amended
Decision (written and prepared by the Baum Law firm), he removed two
critical deciding statements that he had in the original Decision:
A. "They also obtained an equity loan in the sum of $150,000
which was consolidated with the $380,346.31. The total
consolidated loan was $522,200."
and
B. "Defendants allege the $162,000 was satisfied and not in
default. They are correct."
102. In the Amended Decision and Order, the judge now describes TWO
DIFFERENT TYPES of transactions occuring "on or about May 16,
2005".
A. "...Defendants borrowed $380,346.31 from Wells Fargo Bank NA.
This loan was consolidated with the outstanding balance of
the previous loan of $162,000. The total consolidated loan
was $522,200.00."
and
B. "A review of the closing statement clearly sets forth that on
May 16, 2005 Defendants borrowed $522,200. From said sum,
a loan from Wells Fargo Bank NA for $143,409.56 was paid."
103. Can you really have it both ways? Yes you can, when the
Plaintiffs themselves rewrite the judge's original Decision and fax
the rewritten one for him to sign. Apparently, the judge doesn't
mind having words put in his mouth any more than he is concerned
with following proper procedure.
Obviously, we are appealing, and this is where our situation stands
as of September 14, 2007. The above is but a summary of events.
We have supporting documentation for all of the above.
Be sure to see our perfected appeal filed
August 25, 2008, answered by Wells Fargo, and our
Responding Brief
to be filed by November 13, 2008.
104. The following sums up some of the points of the appeal,
as was written on our Notice of Appeal dated September 27, 2007.
"The Amended Decision and Order being appealed herein
granted an ex-parte informal "motion" requested and
granted to Plaintiff Wells Fargo Bank Inc., that such
request was in fact a CPLR 2221 motion to reargue to amend
the prior Decision and Order of the Supreme Court dated
April 27, 2007, and was "the law of the case" which held
findings of facts which were entirely deleted from
Plaintiffs own prepared "Amended Decision and Order" that
was faxed directly to Court Chambers (Plaintiff's own fax
number appears on the rubber stamped signed "order"); that
the Court erred as the time to make a motion to reargue
must be made within the time frame of the time to file a
notice of appeal, which was not done as Plaintiff served
the Notice of Entry upon Defendants on or about June 12,
2007, over two months earlier, whereafter neither side
filed notices of appeal; that this instant matter was an
illegal "motion" in that a CPLR 2221 motion to reargue
first mandates a motion for leave of the court to reargue
where Defendants can assert laches, that no such motion
had ever timely been made or noticed upon Defendants, that
no supporting sworn affidavit by any attorney accompanied
this instant "motion", and said motion was not even filed
by by an attorney but a "legal assistant" of Plaintiff's
attorney's office, and a copy of the proposed "amendment"
sent to Defendants failed to contain critical exhibits.
"The fact that a motion may affect or even be directly
addressed to a prior order does not relieve it of the
requirement that a fee be paid for the motion when the
papers are filed with the county clerk." "(Section 253
Motion Practice, Motion affecting Prior Order)" which was
not done or filed with the Clerk or paid for.