Tuesday, February 21, 2012

Suit: Bankster Waits Until Homeowner Successfully Completes Ch.13 Payment Plan To Stop Foreclosure, Then Belts Her With Bogus Fees; Takes Home Anyway

In Clark County, Nevada, KTNV-TV Channel 13 reports:

  • Wrongful foreclosure, fraud and deceit... all allegations at the center of a lawsuit against JPMorgan Chase. As Contact 13 Chief Investigator Darcy Spears reports, the nation's second largest mortgage lender is accused of taking a family's home while it was supposed to be under court protection.


  • It started when Cathy [Gaither's] mother, [homeowner] Jo Ann Gaither, filed bankruptcy in 2003. She did that to re-organize her finances and keep her home while paying off her debts.

  • Her mortgage, originally through Washington Mutual, was part of the bankruptcy plan. But [Cathy's attorney Chris] Keller says the bank ignored the rules, repeatedly sending her foreclosure notices despite the fact that she was under bankruptcy protection. The bankruptcy was successfully dismissed in 2008.

  • "We thought finally we've completed it, now we can move on and pay normal mortgage payments and there's not gonna be any more notices posted on the window and we can move on now, it's a fresh start," Cathy recalls.

  • Not from the bank's perspective. The same month the bankruptcy was discharged, Washington Mutual sent a letter saying Jo Ann owed more than $15,000. "And they were seeking to foreclose on the property that same month -- the very month that she finished the bankruptcy itself!" Keller says in disbelief.

  • [Cathy's] lawsuit says payments during the bankruptcy were "illegally applied" and that the bank tacked on inappropriate late fees and other charges.

  • Washington Mutual's May 2008 letter even says "we understand you have been discharged from the indebtedness through bankruptcy. Nevertheless, our records reflect that your account remains delinquent and foreclosure proceedings may be warranted."


  • In the midst of it all, Washington Mutual became Chase, the loan modification was denied, and Jo Ann Gaither died. "And the last foreclosure notice that was sent to the property was forwarded the month that she died in July of 2010," [attorney] Keller explains. The house immediately went into probate in another court that Keller says the mortgage lender chose to ignore.


  • The court has ruled that Cathy can stay at her family home until her lawsuit, which is now in federal court, is resolved. But even that has proved impossible since Fannie Mae took over the house.

  • "Since that time, the water company has refused to allow the water to be on at the property because, technically, the property is owned by Fannie Mae," says Keller. "They won't allow me to get the water on and they actually had my power turned off three days after Christmas also," Cathy says.

  • The power was turned back on after Keller threatened an even bigger lawsuit. But the house has been without water for an entire year. "I have a 5-gallon bottle I bring in for my dogs or to do little things and that's about it," Cathy says.

  • She asked to talk with us out front because the house is in such bad shape. Even vandals have struck. "This window got busted out. There's two, looks like pellet gun holes in the window right here."

  • Making Cathy wonder why the bank even wants the house, and why they're putting her through this. "And not just to me but to so many people. There's so many people out there that don't have homes because of something like this."

  • Keller says this situation illustrates the flaws in our banking system. "And the inability of the banks to police themselves." Both legally, he says, and morally.

  • Cathy hopes her story will empower others to push back against the big banks. "I didn't give up for my mom's sake. And now, yeah, my mom passed away but I'm still not gonna give up."

  • Cathy recently got an order from North Las Vegas Justice Court that forces Fannie Mae to allow her to have water at the house while the case is ongoing.

For the story, see Chase accused of wrongful foreclosure.

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