Rhonda G. Mills, the Mashpee homeowner challenging eviction from her foreclosed Emma Oakley Mills Road home, has lost a key court decision, but she is pledging to fight on in her effort to expose what she says is unfair treatment and fraud from the mortgage industry.
The Falmouth District Court decision marks the latest battle in a war between Ms. Mills, a bus driver and specialized foster care parent, and a group of financial institutions involved in her mortgage and foreclosure. It is an effort that has come to dominate Ms. Mills’s life, but one that she feels she cannot give up on now. Beyond the legal issues, there is a personal, highly emotional element to her experience.
“I have a strong spirit about this,” she said in an interview last week.
The Falmouth case is proceeding separately from a US District Court case in which Ms. Mills is also challenging the foreclosure and charging that US Bank, OneWest, and Mortgage Electronic Registration Systems, known as MERS, deceived her and failed to honor a loan modification that was approved for her $376,000 mortgage.
Earlier this month Judge Michael C. Creedon ruled that OneWest Bank had the legal right to sell the three-bedroom, Cape-style home at foreclosure auction, and US Bank National Association obtained a legal title when it purchased the home at the auction.
Rockwell P. Ludden, Ms. Mills’s attorney out of Yarmouthport, in turn filed a motion on October 13 asking Judge Creedon to reconsider his decision based on a technical legal argument questioning whether MERS was allowed to transfer the mortgage to OneWest, the bank that foreclosed on Ms. Mills.
The case was first filed in May 2011 and now rests at the court in Falmouth in a docket more than eight inches thick.
A hearing on the motion to reconsider is scheduled for early next month.
Attorneys for US Bank and OneWest have repeatedly argued that the process followed to transfer the mortgage and note across several entities and to eventually foreclose on the home was proper and legal.
The eviction case in Falmouth district was a narrow challenge to whether the bank that purchased the property at the foreclosure auction received legal title from the bank that foreclosed on the house. Ms. Mills and her attorneys questioned whether the bank that foreclosed had the right to sell the property in the first place because it obtained the mortgage in violation of law and the terms of the mortgage itself. Had the judge determined that the foreclosing bank did not have the power of sale, the auction of the property would not have been valid.
The complicated transactions between banks—transferring the mortgage between several entities and selling Ms. Mills’s financial obligation to pay her principal and interest into a financial trust created on Wall Street—held up under Judge Creedon’s scrutiny.
Also at issue was whether the foreclosing bank followed the necessary legal protocol to announce the sale and turn over the deed.
Ms. Mills lost on both counts.
The Challenging Path
The legal issues will eventually be resolved by the judges. For Ms. Mills, though, the experience has been about much more than legal technicalities. Aside from her home and her livelihood, for as a specialized foster mother her home was integral to her livelihood, her reputation, her pride, and her sense of right and wrong have all been central to her decision to carry on.
It is an experience mirrored by many thousands of homeowners across the country since the real estate market collapsed. Facing health issues and personal challenges, she and her then-husband first thought about selling the house back in 2006. But on the advice of a relative, they refinanced and signed on to an interest-only loan with a low initial monthly payment. The idea was to refinance after about two years. However, $14,000 was soon added to her principal loan balance, and she could not keep up.
While that scenario is shared by hundreds of thousands of other homeowners, there are many ways to handle it. Ms. Mills has chosen what in many ways is the more challenging path.
Ms. Mills said she finds great strength from her spirituality. She said she has never aimed to get her house for free, as has been the case in other foreclosure challenges across the country. Rather, she just wants a fair shot at a loan modification that she can reasonably be expected to pay.
She had that shot with a loan modification approved by her lender before the foreclosure process began. It was approved and then inexplicably never came to pass. Her calls to her lender to find out the status of the modification were not returned, she said.
“I am not challenging the bank because I don’t think they own my house. I am challenging the bank because they didn’t give me the chance that they were supposed to give every homeowner under the [federal Home Affordable Modification Program],” she said.
After a single bad decision—to sign on to the loan, a choice she acknowledges was poor even in court documents—she said she feels she has done everything she can to correct her mistake. She went through credit counseling. She worked with a refinancing company that told her to stop paying her mortgage, a move that initiated the foreclosure process. She was advised to file for bankruptcy, a move that may not have helped, either.
She is preoccupied by a novel, if very basic question: if so many of the banks and corporations involved in her mortgage from its inception through the foreclosure have been the subject of federal investigations or consent orders, why has the government done so little to help her and the other alleged victims of the wrongdoing?
The US Justice Department sued MortgageIT and Deutsche Bank, which took over MortgageIT in 2007, for civil fraud under the federal False Claims Act for reckless lending practices and false certifications to the US Department of Housing and Urban Development in connection with the residential mortgage origination and sponsorship practices of MortgageIT.
A $202 million settlement was reached on May 10, 2012.
MortgageIT originated her loan.
US Bank, which serves as trustee for the real estate trust that owns her home, and MERS both signed consent decrees with federal investigators last year, pledging to fix any deficiencies in residential foreclosure practices that may or may not have existed. The decree did not involve an admission of guilt.
She also highlights dozens of reports about how certain financial institutions targeted minorities with predatory loans, and she said she feels this is another example in a long line of laws being used to take advantage of “the little guy.” From her perspective as a Native American, there is deja vu in the story of bewildering terms of land transactions that result in Indians losing their homes.
She is deeply indignant. She wants to make her point. She is planning her second trip down to Washington, DC, hoping to meet with federal officials to tell her story and solicit some assistance.
The Internet holds an endless trove of both official documents and unofficial opinions about the issue, enough to keep her continually finding new information that pertains to her situation.
She has been piecing together the money for legal bills and said she feels fortunate that she has been able to fight as long as she has, despite the odds of a homeowner facing down some of the largest real estate financing institutions in the country.
“I feel like I have to keep going,” she said. “I’m not sure what it will take.”