CitiMortgage goes down

Christopher Youngs, TLC ’10 Grad. TLC Alumni List Serve, March 30, 2012.

I just won summary judgment against CitiMortgage in a case which -- in the beginning -- I did not think we could win.  I proved that CitiMortgage is a greedy cheat.  My client, Charlie, takes a mortgage with Citibank, makes one payment then defaults. CitiMortgage forecloses.  Before the sheriff sale is scheduled, the house burns down.  Nothing suspicious, just bad luck.  Charlie tells CitiMortgage he wants to pursue the fire insurance claim and try to pay down the mortgage.  The bank delays the Sheriff sale so that Charlie can get the insurance check.  As the new sale date approaches, the insurance check still has not arrived.  Desperately, Charlie calls CitiMortgage lawyer, who tells him that if Charlie gets the check to the lawyer's office before the sale, the sale will be stopped.  CitiMortgage lawyers  Are a big foreclosure mill out of Philadelphia.

Charlie turns himself inside out to get the check to the lawyer.  Naturally, the check is made out to Charlie, his wife and CitiMortgage.  He is separated from his wife and somehow gets her to endorse it.  After Charlie and his wife sign the check, Charlie sends the check to CitiMortgage lawyer - and here is where he finally starts thinking: he sends it by certified mail.  The Sheriff sale is scheduled for June 4.  CitiMortgage lawyer receives the check on June 2.  Lo and behold, the lawyer lets the sale go through anyway!  Surprise, surprise!

The check was not enough to satisfy the mortgage, but it was way more than the delinquency.  Charlie comes to me and lays all this on me.  He did not have a lot of equities going for him, though, and the mortgage provides that the bank can do what it wants with the fire insurance proceeds.  Reluctantly, I filed a petition to set aside, or undo, the Sheriff sale.  CitiMortgage lawyers farm out the case to a hotshot Philadelphia commercial trial lawyer who assures me that I am full of crap, but CitiMortgage is a nice person who wants to settle and all we need to do is arrive at a dollar amount and he will work magic with CitiMortgage and make it happen.  We were negotiating on a plan to sell the property, pay off the mortgage balance, and Charlie would get what was left.  Every time I talked with Mr. Hotshot, the price went up.  It went up from $25,000 to almost $50,000.  In frustration, I started doing some of the legal research I probably should have done at the beginning!  There is a pretty good statute in Pennsylvania that nullifies the power to hold a Sheriff sale if the mortgage debtor brings his delinquency current before the sale takes place.  Well, Charlie’s fire insurance check certainly brought his delinquency current, but the source of funds was fire insurance proceeds to which CitiMortgage had, at least, an equitable claim.

Charlie and I decided to take a chance.  We told Mr. Hotshot to go take a flying leap, that we would not pay the exorbitant amount that CitiMortgage wanted.  We reduced our offer to peanuts, and when they refused, I filed a motion for summary judgment.  This is a case of first impression in Pennsylvania because nobody ever litigated this issue.  The Judge could go either way -- in favor of the big-money interests, or in favor of the little guy.  Arguing summary judgment was fun.  I made a point of pointing out that several weeks earlier, CitiMortgage joined in with several other huge lenders in a $25 billion (give or take) settlement with the federal government over mortgage fraud.  Mr. Hotshot lawyer attended by telephone, so I did not get the opportunity to see the look on his face as I was painting CitiMortgage and its lawyers as frauds and cheats.  When Mr. Hotshot lawyer got to make his argument, he told the judge that he should disregard my argumentative comments about his client because they were inappropriate?  I looked over at the Judge's clerk and asked him if he thought I was out of line, and he shook his head no.

Got the decision yesterday - and we won.   The Judge overturned the sheriff sale and gave Charlie back his property.  The Judge took my arguments and improved on them.  It is nice to have that kind of help from the judge and his clerk.  The judge is going to schedule another hearing to see if I am entitled to statutory attorney fees from CitiMortgage.  Have not heard from Mr. Hotshot lawyer yet.

Love and peace,

Chris