Friday, August 23, 2013

The Skanner Examines Nationstar's Alleged Fraudulent Mortgage Practices

UPDATE

Check out this article covering the McElderys in The Skanner newspaper:

'Lost' Check Cashed: Oregon Mortgage Fraud Lawsuit Exposes White Collar Abuses


UPDATE

On Friday, August 16, 2013, members of Portland's Irvington District community hit the streets to raise awareness about Nationstar Mortgage's alleged fraudulent practices.

Homeowner Michael McEldery and his
consumer protection attorney Michael Fuller
The group posted community alert flyers at local businesses and spread the message door-to-door throughout the neighborhood.

The flyers contained an open letter to the community written by the McElderys, detailing Nationstar's alleged fraudulent practices and wrongful foreclosure.

Nationstar Mortgage LLC, owned by parent company Nationstar Mortgage Holdings Inc. (NYSE:NSM), refuses to comment.

The mortgage company's CEO Jay Bray was served with an order to show cause why Nationstar shouldn't be held in contempt last month. Mr. Bray has yet to file a response.

Nationstar's attorney, Ryan Farmer of the law firm Pite Duncan, refuses to comment. Mr. Farmer cannot explain why Nationstar will not dismiss its pending foreclosure lawsuit against Mr. McEldery.

UPDATE

On Wednesday, July 24, 2013, United States Bankruptcy Judge for the District of Oregon the Honorable Elizabeth Perris issued an order to show cause why Nationstar Mortgage LLC should not be held in contempt of the discharge order.

The Judge has ordered Nationstar to appear at a hearing on August 27, 2013.

Mr. McEldery, through his consumer protection attorney, has requested internal documents from Nationstar relevant to the alleged wrongdoing related to his mortgage with them.

Nationstar refuses to comment and has not filed a response.

UPDATE

On Tuesday, July 23, 2013, Michael McEldery filed a 29 page court document detailing alleged wrongdoing by Nationstar Mortgage LLC.

The motion and supporting documents ask Judge Perris to hold the mortgage company in contempt of the discharge injunction entered in his bankruptcy case back in December 2011.

Mr. McEldery, through his consumer protection attorney, also seeks compensation for stress, punitive damages not to exceed $500,000, and reimbursement for his attorney's fees and costs necessary to prosecute Nationstar.

Nationstar's attorney says it has no comment. The company has yet to file a response.

UPDATE

On Wednesday afternoon, July 18, 2013, Judge Perris issued an order reopening the McEldery bankruptcy case to entertain a motion for contempt against Nationstar Mortgage LLC.

Mr. McEldery's attorney expects to file a motion detailing Nationstar's alleged wrongdoing shortly.

Nationstar's attorney has yet to file a response or return a phone call for comment.

[District of Oregon Bankruptcy Court Case No. 11-38361-elp7]
[Mult. County Cir. Court Case No. 130608595]

ORIGINAL BLOG

In September 2012, Portland homeowner Michael McEldery became unable to make his mortgage payment to Nationstar.

"After a death in the family, we knew we couldn't afford the payment for much longer," he says.

After five months of delinquency, Nationstar sent McEldery and his wife a letter that offered them hope.

"We felt so lucky. The letter said if we sent three monthly checks starting in February, we could keep our home with lower payments," says McEldery.

The McElderys did as the letter said and sent Nationstar three cashier's checks dated February, March, and April 2013.

"We kept copies of the checks as a receipt, just in case," says Michael's wife Judy McEldery.

In April, several weeks after making their third payment, a Nationstar rep called the McElderys with shocking news.

"[Nationstar] said it never got our second check," Judy says. "We were devastated," says Michael.

The McElderys began frantically requesting bank records but by May it was too late. 

Based on a summons issued May 2nd by its Portland attorney Ryan Farmer, Nationstar was moving forward with foreclosure.

In disbelief at their seeming misfortune, the McElderys continued to research the missing check with their bank.

In late June, bank records confirmed their sneaking suspicion.

"According to the bank records, Nationstar had the check all along," says Judy.

Nationstar later confirmed it held on to the check until June, then cashed it after the trial period ended.

Nationstar now refuses to honor its original modification offer, refuses to refund the trial payments, and refuses to stop the foreclosure proceeding.

"We may go away. But not without a fight," says a dogged Michael McEldery, who turned 66 year old in February.

On July 15, 2013, Mr. McEldery, through a Portland consumer protection attorney, filed papers in federal court indicating he intends to ask Judge Elizabeth Perris to hold Nationstar in contempt.

Nationstar has yet to file a response. Nationstar's attorney did not return a phone call for comment.

[District of Oregon Bankruptcy Court Case No. 11-38361-elp7]
[Mult. County Cir. Court Case No. 130608595]