Stolen Property?
An unscrupulous mortgage-collection firm sold Jim Hultman's Berkeley home out from under him, leaving behind a feud and an eyesore.
By Jeremy Singer-VineArticle Tools
THIS HOUSE IS STOLEN. The words are spray-painted in what was once black along the sidewalk directly in front of 2122 Ward Street. It's old graffiti. Over time, sunlight and foot traffic have reduced it to a shade of gray only slightly darker than the concrete.
But the message is unlikely to be overlooked. Just feet away, on the paved landing leading up to the steps of the gray, wood-paneled south Berkeley house, someone has stenciled DONT BUY THIS HOUSE in smaller, darker block letters. Just beyond, a six-foot chain-link fence encircles the rest of the property. Inches farther, on the same landing, are more stenciled graffiti: STOLEN PROPERTY and GIVE IT BACK and RETURN JIM & BRETT.
These unequivocal slogans began cropping up in the summer of 2005, just weeks after Jeff and Loren Toews bought Jim Hultman's house at an Alameda County trustee's sale. The Toews (pronounced "taze") brothers are retired NFL players turned San Jose businessmen who have made a small fortune in Bay Area real estate. It wasn't the brothers who "stole" the house, but they bought it after an unscrupulous mortgage servicing company foreclosed on the property — fraudulently, according to Hultman. That's why he thinks the new owners ought to sell it back to him and his partner Brett for what the brothers paid, rather than to a third party at the market rate.
The graffiti has served half of what appears to be its intended purpose: Jeff and Loren Toews have been unable to make a sale. They balked at Hultman's offers — and vice versa — but haven't found anyone willing to buy the contested property. The two-year stalemate has whittled away at the patience of all the parties: The businessmen have a high-six-figure asset that is now essentially frozen, Ward Street residents have an eyesore and a headache for a landmark, and Hultman and his partner Brett are stuck living at Brett's mother's house. Hultman, meanwhile, is at his wits' end, and by many accounts has become reclusive. The Express, in fact, was unable to track him down for a photograph to accompany this article.
The way Hultman tells the story, his despair is understandable. The house had been in his family since 1911, when his maternal grandfather bought the property. Seventy years later, Hultman moved in to care for his ailing grandparents, and inherited the property when they died. In August 2001 he took out a $170,000 loan with Aames Home Loan to pay off some property taxes and do a series of long-overdue repairs. At the time, the house was appraised at $850,000, but many of its parts — roof, plumbing, wiring — hadn't been replaced since his grandfather bought it. Hultman, an assistant property manager and home stager for local real-estate agents, planned to do most of the work himself.
About a month later, he got a call from a representative of Fairbanks Capital Corporation asking for his mortgage payment. This was news to Hultman, who insisted he'd sent his $1,200 payment to Aames earlier in the month. The Fairbanks rep politely informed him that the company had bought servicing rights to his loan from Aames, and would be managing his payments thereafter.
Confused and a bit suspicious, Hultman immediately went online to research Fairbanks, which was then the nation's tenth-largest loan servicing company, owned by the PMI Group, a publicly traded mortgage insurance corporation.
What he found frightened him. Roughly a dozen Web sites warned of the company's practices. Among the many grievances of fellow Fairbanks clients: The company charged them unwarranted late fees, demanded payments already made, and falsely stated customers' account balances. "I knew it was trouble," Hultman recalls.
Still, he figured there was little he could do except pay on time and keep record of it: "I went ahead making my payments. They were never late, and I always mailed them before they were due."
Hultman provided the Express with photocopies of his canceled mortgage checks from the time he became concerned right up through the date his property was auctioned.
Sure enough, the homeowner says, the company would occasionally claim his payments were late. "But I knew that was one of their ploys," he says. "I would just argue with them and just get it straightened out."
In November 2003, the US District Court of Massachusetts settled a national class-action lawsuit Alana L. Curry, et al., v. Fairbanks Capital Corporation. While the company admitted no wrongdoing, the lawsuit represented the first significant legal action by a regulatory agency against a large mortgage servicer. The $40 million settlement sent a mixed message to customers. While both the settlement deal and an accompanying order from the Federal Trade Commission demanded that the company reform its exploitative business practices, they also confirmed customers' widespread suspicions.
Hultman qualified for the settlement but decided to opt out. "I had followed the lawsuit against Fairbanks," he says. "Everything I read said, 'Opt out; don't go along with it.' If you stayed in as a class in the lawsuit, you gave up all rights to ever sue the company." In addition, the settlement made little financial sense. The $40 million in consumer redress was split among nearly 300,000 homeowners for an average payout of less than $200.
The following February, a man appeared at Hultman's door hoping to buy the house. Hultman had defaulted on his mortgage, the man said, and the house was in foreclosure. Bewildered, Hultman dismissed the man from his property. The last time he'd spoken with Fairbanks, the rep had told him his account was current. Moreover, he says, he'd received none of the documents that always accompany a foreclosure.
California law requires a lengthy process — 121 days at the very least — for a lender or servicer to foreclose on a house, which gives homeowners the chance to "cure" their default. It begins with a Notice of Default, which must be recorded with the county and sent by certified mail. Even if this notice is lost in the mail, thrown out with the recycling, or simply overlooked, it's nearly impossible for homeowners not to know they're in foreclosure.
Showing 1-4 of 4
I was reading this article and I have to say this sounds a little bias. I completely agree that the mortgage company should fry for what they did. I hope he wins his case but, to take out his wrath and rage on the guys who just bought the house legally is not right. This article pastes a really nasty picture about them when the real people to blame are the mortgage company. I think its sad that writers like you like to drag people through the mud who otherwise might be really good people just to make a little more fire to your article.
Interesting article. I have seen the house. It sounds like the culprit in this case is the mortgage company. I'm familiar with foreclosures, and have looked to buy them myself. There is no contact between buyers and whatever lender is foreclosing. You just show up and bid. It's pretty messed up that the home has been vandalized, preventing the Towes brothers from selling it. Sounds like it's the neighbors or the former owner. If they (the neighbors) really want this done, they should not protest these guys selling the home (knock off the signs, vandalism and flyers) and encourage the owners to go after the lender. Sounds like the case would be a slam dunk. I'm sure some lawyer would take it on a contingency basis.
Unfortunately I am in the same boat as this man, I know how he feels, I will never give up either.
In 1998, I did an equity loan with WMC Mortgage Corp for
374K, my home of 18 years had appraised for 575K at
that time so it was perfect target for equity stripping.
WMC was to pay off my first mortgage with The Money Store
in 1998 but never did. I received tons of default notices from
TMS and contacted WMC who assured me they would fix the
problem. A month after that 1998 closing, TMS forever closed
its doors. I never heard from them again however, the Note/Deed of Trust for their mortgage which was 289K were
never released.
WMC did a bait and switch, put me right back into an adjustable which was why I did the refi in the first place since TMS was an adjustable rate mortgage.
In 2000 my monthly payment went from 2900.00 to 4800.00, there was no way I could make that payment. I filed bankruptcy to try to save my beloved home. I was 60 years old at that time.
Filing bk was a bad decision that court trampled all over me,
thought it was fine that TMS was never paid and lifted the Stay for WMC in January 2005 despite the fact that my Plan payments were current and my home was fully insured.
I could not get an Injunction, filed another bk after dismissing the previous one.
In the meantime Quality Loan Service of California, Holthus, etc. became the Trustee.
In May 2005 I discovered that WMC had sold the loan to Fairbanks now known as Select Portfolio after the Curry
settlement. The bad part, WMC sold the loan to Fairbanks four months before I filed bk and or back in January 2000. Did the bk judge care? Of course not...he told me to take the matter to superior court.
Factually WMC filed a false proof of claim in my Bk, got the Stay lifted through fraud and never mentioned the fact that they had committed fraud.
Fairbanks sold the loan to JP Morgan Chase who listed my home as bank owned in April 2005. All three added 150K into the payoff for the legal fees they incurred which they owed to
Snell & Wilmer in Phoenix.
My home was sold at auction on June 21, 2005 without Quality ever sending me a notice of trustee sale. Aside from that they misrepresented the home to be in the town of Carefree when it was not but none of this convinced any judge thus far that this is wrong especially in a non judicial foreclosure state.
The current judge in superior court fully knowing that in June, 2006 TMS was finally paid off by ALTA in Florida which is still another alias of Fairbanks. I furnished tons of evidence and
for the September 2007 hearing on WMC, Fairbanks, JP motion for summary judgment the judge granted it to them.
I even procured a 2007 from HomEq who again informed me that the first mortgage to TMS was paid September 7, 2005 and or almost three months after my home was sold to a third party investor at auction.
WMC, Fairbanks, or JP presented no tangible evidence. The court relied on the opinion of their attorney who claimed, this happens all the time, mortgage company's forget to release deeds of trust and that loan was paid years ago meaning TMS.
No it was not. WMC and the rest lucked out only because TMS
went under. I did get notices now and then from a company called First Union but they could never find me in their system. Ultimately, First Union sold those TMS accounts to HomEq.
The only money WMC ever put out to me was the 22K equity for which they were overpaid @ 2900. per month by me until I filed bk.
I almost forgot the day of the trustee sale I motioned the bk court and forwarded a copy of the Title Report from a agency which showed TMS to be the true and only first mortgagor on my home. Bk judge blew it away and refused to Set the illegal sale alive.
If this had not happened to me I would never believe it in a million years. It is insane. I have told the judge, I would have been better off if my car was stolen...Sheriff Joe would have found the thief and my car would have been returned. The
courts are sorely in need of investigation.
I also am fully convinced that the illegal buyers are connected to Fairbanks.
Another update. I filed a complaint with the Banking Department and just received a letter from JP Morgan Chase who claims they aren't at fault because they sold this immaginary loan to the Bank of New York in October 2006!
How did they do that? They already sold my home to AFG
who sold it to TNT Properties Doug Hardin in June, 2005.
These pooled loans are illegal.
My best wishes and best of luck to Mr. Dillion, like him I too
am a fighter for justice and will never rest until I see these
companies in prison where they belong.
Anyone having a similar story can contact me at
ipredict7@aol.com
I ran across this article trying to locate a couple of old friends, Jimmy and Brett. It is a shame that this has happend to their home. If anyone knows how to contact them please call me, Sincerely, BJ Egbert 559-438-0922
Latest in Feature
-
A Coach's Job Begins Off the Court
Coach Joanne Boyle has built the Cal women's basketball program by treating team members as people as well as players.
- Nov 18, 2009
-
Das Mann of Steel
How a metalworker from Burning Man became the maestro of the huge American Steel artist complex.
- Nov 11, 2009
-
Understanding North Korea
For years, East Bay activists have been trying to influence US policy toward North Korea. Finally, Washington may be listening.
- Nov 4, 2009
- More»
Comments (4) RSS