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| A Maryland borrower who lost his property to foreclosure after refinancing because the closing agent allegedly failed to forward proceeds to Washington Mutual Home Loans Inc. is looking to the state’s highest court for help. Attorneys say the lawsuit could dramatically change the lender-friendly rules governing foreclosures in the state.Atta Poku, a Maryland cab driver, lost his home in a botched streamline refinance of the mortgage held on his Columbia, Md., townhouse. WaMu foreclosed on Poku, a Ghanaian immigrant, in August 2006 when he couldn’t prove that the original mortgage had been paid.
The owner of the settlement company who handled the closing served time in jail for embezzling. “The Court of Appeals has the opportunity in this case and two other cases that it will be hearing next month to order a reshape of the rules and procedures governing the foreclosure process in Maryland,” said Phillip Robinson, an attorney and the deputy executive director of Civil Justice Inc., a public service law, firm told MortgageDaily.com. His firm filed a friend-of-the-court brief in Poku v. Friedman. “If the Court of Appeals chooses not to do that, the Governor and General Assembly have indicated they will step in,” he continued. Robinson said the state’s foreclosure process does not require a mortgage company to prove that a borrower has been notified of a foreclosure, allows the taking of a house in just a few weeks and does not require a hearing. As a result, Robinson said borrowers can be hit with a foreclosure in as little as 15 days. The state’s foreclosure proceedings have gone unchanged for years and need to be overhauled to be fair to homeowners who have a good faith defense, Robinson said. While Maryland law allows foreclosures to be delayed if an injunction is obtained, Scott Borison, Poku’s attorney, said in a phone interview that such a ruling is not easily obtained. “They call it extraordinary relief,” he said. Borison said tenants have greater rights under state law, explaining that before a Maryland renter can be evicted, the law calls for a hearing on the matter. “I’ve been complaining about the foreclosure laws for years saying they are ridiculous,” Borison said. And, some Maryland attorneys are loathe to encourage homeowners to declare bankruptcy to obtain a delay of a foreclosure if, as in Poku’s case, the borrower’s credit is in good shape. Foreclosure attorneys declined to go on record but said Robinson’s interpretation of Maryland law regarding foreclosures is oversimplified. Court records indicate that Poku was sent several letters over the course of several months indicating his mortgage loan hadn’t been paid. Maryland’s intermediate appellate court upheld the foreclosure and eviction on May 8, 2006. While many speculate that the owner of the title agency who handled Poku’s refinancing and who later pleaded guilty to embezzling $1.6 million in escrow settlement funds took Poku’s funds, Borison isn’t so sure. “He issued a check to them. We have a UPS showing it was delivered to them,” Borison said. A WaMu spokesman has reportedly said Washington Mutual never received the settlement check. For his part, Borison said he’s open to settlement talks from WaMu’s attorneys. It is not known when the Maryland court will issue a ruling on Poku’s lawsuit. WaMu’s attorneys declined to comment. |
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