Six years ago today my fiance Bruce died, leaving me to deal with an underwater house that has consumed many of my waking hours to this day.
The story of this house, the source of so much aggravation, is the poster child for how homeowners and HOAs have been victimized by banks, debt collectors, managers and attorneys in the aftermath of the housing market crash a decade ago.
Long story short starts with the banks
- Housing market crashed.
- Bruce died at the bottom of the market.
- He left a trust with one asset – an underwater house.
- The banks would not refinance it nor approve any short sale.
First plot twist
In the vast majority of the legal battles over an HOA foreclosure, the homeowner is gone before the fight. The homeowner doesn’t fight if the delinquent debtor was a deadbeat, debilitated by debt, or died.
I am not a deadbeat, or even the debtor, nor debilitated nor dead.
I am a fiduciary, fighting for the rights of Bruce’s trust.
Back to the bank….
- After B of A botched several sales, I refused to keep paying maintenance costs, such as HOA assessments and utilities.
- B of A took possession but would not take title and did not foreclose nor accept a deed in lieu offer from me.
- Nationstar took over servicing from B of A, but Nationstar’s investor also refused to close any deal no matter how good the offer was.
Enter SCA agents to try to beat the bank
- Story continues for a couple of years.with SCA agents starting and stopping, scheduling and then withdrawing a threatened foreclosure for delinquent assessments
- B of A tendered the super-priority portion of delinquent SCA assessments, but SCA’s agents (FSR and Red Rock Financial Services) refused to accept less than their version of full payment – very similar to the $55,000 Citibank settlement Rex reported out from the December 7 Board meeting.
- After SCA’s agents cancelled the foreclosure sale multiple times, they sold it in 2014 to a Realtor for 18% of its value, $63,100 without ANY notice to me, my agent, or the bank. This Realtor worked in the Berkshire-Hathaway office where my listing agent worked.
Unbeknownst to the SCA Board, its agents were secretly working for themselves
- SCA’s agents told the Ombudsman that the sale was cancelled, but then secretly held the sale anyway and did not EVER report to the Ombudsman that a foreclosure sale had occurred.
- After the surprise sale in 2014, SCA agents credited SCA with only $2,700 of the $63,100 sale proceeds as payment in full, and SCA agents unlawfully kept the $60,400 balance.
- FSR did not ever report in HOA records that the house was sold to the Realtor, or that the Realtor ever paid any assessment enhancement fees or new owner fees.
- HOA records (created by FSR) are in direct conflict with recorded documents and show that a dentist took possession after the foreclosure, not the Realtor named on the foreclosure deed created by FSR.
- There are two recorded title changes in the county records that do not exist in SCA’s records for which FSR has some explaining to do.
SCA is in, but can’t win
Three lawsuits to quiet title from 2015 to the present have thousands of pages of documents filed.
SCA is in the middle of this complex litigation even though there is nothing SCA can win and where there is nothing to lose but attorney fees.
The dentist who currently has possession of Bruce’s house sued SCA and B of A for quiet title in 2015.
Records conflict about when the dentist took possession of Bruce’s house. It was either in 2014 after SCA agents foreclosed (which is what SCA records say), or he took possession in 2015 when he recorded a fraudulent quit claim deed (which is what County records say).
The court issued a judgment of default against B of A who did not respond to the summons. SCA was still in the lawsuit because the dentist inexplicably never served SCA a notice to appear.
In 2016 Nationstar sued the Realtor who held the foreclosure deed, but then found out about lawsuit 1.
Nationstar took B of A’s place in the lawsuit. even though neither bank is owed any money from the mortgage.
On behalf of Bruce’s trust, I sued all parties in 2017 to claim the title should be returned to Bruce’s trust because the foreclosure sale was conducted unlawfully in SCA’s name by SCA agents.
The dispute over the title to Bruce’s house is between me, the dentist, and the bank.
SCA has no financial interest in the title and was already paid in full for delinquent assessments in 2014.
Why is SCA being sued for its agents’misconduct?
SCA’s former agents foreclosed under SCA’s statutory authority.
SCA is responsible for its agents, and the SCA Board is responsible for ensuring that its agents act lawfully.
SCA Board President Rex and SCA’s current agents refused to negotiate or do anything whatsoever to attempt resolution without litigation.
SCA could have gotten out of the litigation without cost by simply stating that the Board did not authorize SCA’ former agents to conduct the foreclosure sale unlawfully and affirming that no current or former Board member profited from the non-compliant sale.
How does this all relate to the big picture of protecting homeowners from being forced to pay for agents’ misconduct?
What happened to Bruce’s house has happened a thousand times in Nevada in the last decade.
After getting rid of FSR, SCA jumped from the frying pan into the fire and hired Alessi & Koenig in 2015 to be SCA’s debt collector attorneys without noticing that they had been sued in 500 of 800 HOA foreclosures they conducted between 2011-2015.
The situation worsened when Alessi & Koenig hid their assets from creditors, dissolved their corporation and morphed into HOA Lawyers Group. SCA continued to use HOA Lawyers Group after they were put on notice of the fraudulent scheme.
The downward spiral in how SCA handles debt collections continues to this day by contracting with the Clarkson Law Group despite their unethical practices designed to prevent these problems from being disclosed to the membership.
A 2017 UNLV/Association of Realtors study showed that HOA foreclosures have cost the real estate market $1 billion due to the approximately 700 cases they identified Clark and Washoe Counties alone between 2013 and early 2016.
HOA Boards statewide have been duped (like SCA Board has been) into facilitating this major rip-off contrary to the financial interests of the associations and their members.