Maybe there are no more debtors’ prisons, but that doesn’t mean your life can’t be screwed up by unscrupulous collection agencies.
Sonya Capri Ramos says her Salt Lake City home was sold out from under her in 1996 to pay a collections agency seeking payment for dental work performed on one of Ramos’s daughters. And despite the fact that she had made three years of payments on a $51,000 mortgage, the title changed hands for just $1,550 at a sheriff’s auction.
The bill blew up to $950 from legal and collection fees, and in 1996 she was sued by a collection agency named North American Recovery. She didn’t contest the lawsuit—she claims she was never notified—and the judge ordered that some of her non-exempt real property should be sold to pay off the debt. “But because the real estate at stake was Ramos’s home, which by law is considered ‘indivisible,’ the title to the entire property was sold at auction,” to a company called Jarmaccc Properties—which has refused to give her back the title, even after she paid them the $1,550 through a bankruptcy restructuring in 1998.
“Woman Loses Home Over $68 Dental Bill” [ABC News]
(Photo: Getty Images)
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Scary. I’m going to call my dentist today and make sure i don’t owe them anything.
AMERICA!
FUCK YEAH!
So getting her title back is like pulling teeth huh…
Sorry, I had to.
Hopefully the tooth fairy will hook me up so I can keep my house! This is just sad…
Cue the “well she should have paid it even though she didn’t know about it” folks.
So she lost her home and still owes money on the mortgage? You’d think the mortgage company would have intervened?
This is a situation where you hope someone does the right thing and gives her home back to her, but apparently in this huge chain of events, not one single person stepped up and did the right thing. Man, the world is going downhill.
That’s all there is to the story? really?
There has to be more, this has to at least make a bit more sense somehow.
@Daniels: Ok, I’m not trying to be snarky, but:
Ramos said she paid for part of the treatment, but not all of it — a $68 bill remained.
Ramos said she had “all intentions” to pay the bill, but didn’t. “I wish I would have borrowed money to pay it at the time,” she said wistfully.
Yes, it’s fucked up that she would lose her house over this, but it sounds like she at least knew about the initial $68, if nothing else.
Lesson learned – make sure you know what you owe, pay your debts, ask for help if you need to, but don’t expect them to magically go away on their own.
Wow. Totally didn’t know your house could be sold out from under you for unpaid debt.
Ok, I’m not usually a blame the vicitm kind of gal, BUT….
She had no idea??
There was NO communication from the collection agency???
She paid them back 2YEARS after the house was sold and she’s surprised the person who bought the lien woulnd’t give up a claim?
The bank who owns the mortgage, and therfore is first in line said NOTHING?
Really…..?
Can’t the sale of the home be declared illegal if she wasn’t properly served?
@mindshadow: For an unpaid debt of such a small amount. WTF is up with the fees. They turned $68 into $1500? That sounds shady.
Credit reports and collections are largely unregulated by the government, they seem to be the new prime real estate for some very questionable players.
@celticgina: I can believe it. Sprint sent something to collections once on me that I did not owe. They never sent me a bill in the interim either so one day I get home to a letter. I disputed the charge and didnt hear a thing…12 months later I get another collections letter from a new company and again I disputed the charges.
According to the article… the $68 bill from 1995, ballooned to $950 in 1996…right there is your problem, how the hell does $68 turn into $950 in less than 12 months? Legal fees apparently. How much time did this collection agency give before they sued? How much interest did it accumulate before legal notice was given to pay? The real kicker is that instead of putting a lien on the property for the money, they somehow auctioned off the title, how they even were able to do that has to be illegal.
@evslin: Lesson learned? Really? Of course she should have paid what she owed, but, some people are in a position where they have to pick and choose what bills they can pay. I’m not defending spending more than you have or anything like that.
But nobody should ever lose a house that’s up-to-date on the mortgage payment because of an entirely unrelated bill for less than one-hundredth of a percent of the house’s total value. That’s completely outrageous. She chose to keep the mortgage up-to-date over the dental bill, so it sounds like she had her priorities straight.
Something else is going on here, this should be fairly easy to take care of. You go to court and say “your honor, I never received notice.” The Judge should then say to the debt collector “please present your proof of service.” The debt collector says “I ain’t got it” or they show it to the Judge.
I think she needs to go to Judge Judy. Judge Judy knows about this stuff.
But, I also must ask…. why did it take so long to pay off $68? At my brokest moments, I could eventually scrounge up that much.
How the f— did this happen? What kind of country have we become?
@Lo-Pan: There’s a link to the actual story below the post: [abcnews.go.com]
I didn’t think this was possible. It might not even be legal. Wouldn’t the other company who bought the “title” really be just a leinholder?
Don’t they need to post notice of auction signs or whatever on the property?
“Can’t the sale of the home be declared illegal if she wasn’t properly served?”
Based on what people have told me that have been in situations like this (nothing this horrible) you don’t actually have to be served. I thought so to, but then I keep hearing about lawyers who serve the debtor at a random or previous address, claim they made every attempt at contact, and win by default.
I wish I’d have known…I’d have bought it!
How was a collection agency able to secure a title to a house that wasnt owned by her? The bank holds the title until it is paid off the deed (equity) should have been greater than the debt. This doesnt make sense and I would be at the Dentist’s house with suitcases until it was fixed.
How could such a small debt cause home seizure?
We’re not getting the whole picture here, I think.
Assuming she owed the debt and was non-responsive, who the hell gets a lien on a house over a thousand-dollar debt? Why not just garnish her wages or attach her bank account and be done with it?
Oh, and after all their failed efforts to find the person, they magically have your correct address and employment information when they walk across the hall to file for wage garnishment.
Story says that sheriff got service on her on the original complaint. Good luck trying to argue you didn’t get service on multiple occassions..espcially in 1998 she claims she didn’t get service of something but yet specifically declared bankruptcy to get her home back..hmmm..
THIS is why people KILL other people. I would justify this by the way.
And this is why I don’t go to the dentist.
[[grins to show empty mouth except for two rotten and crooked teeth.]]
Oooh, I just read the full story. If the sheriff’s office screwed up the legal description she MIGHT be able to go back and argue that that link in the chain of title is null and void and work from there.
IANAL, I just work for one.
@vdragonmpc: I think some of the issue here is that she keeps calling it a “mortgage” but describes it as a “loan.” The state “loaned” her money, but doesn’t actually hold the title to the house. The house is just collateral.
I could be wrong….
I believe her when she says she never got notice. I had a collection agency sue me once, and the only notice I got was a notice of default from the court. So I did research, they claimed they had served me with the paperwork on a certain date and time. Problem being, I wasn’t even home, and I had witnesses to the fact, because I was at a company picnic. So I wrote the judge, with all my proof. Let’s just say this company didn’t get a dime.
Whenever I read stories like these, I always wonder “what aren’t we being told?” Not saying the woman here is at fault, but there are a lot of holes in the story.
AMERICA ROCKS!
Nazi’s 1 — Consumer 0
@Erwos: That might be because the end result is unbelievably stupid. Whether or not she was properly served by the sheriff, the sale of her house to pay such a relatively small debt is absurd. I think the only information that could make this more sensible is if more was involved in the initial debt than the article describes.
vdragon: Wrong. The lender holds a mortgage, trust deed, whatever the particular state calls it. Title is a separate issue. I can transfer title to my home into a trust, an LLC, or to my wife. But I’m still responsible for the mortgage, which is secured by an interest in the house.
@celticgina: I believe it. I had a late fee from a local library a few years ago, which I paid off the very day I got the bill. It was not from a collection agency, it was from the library, and it was the very first bill they sent. I paid it over the phone so I know they got it. Years later, I see a collection on my credit report for that very bill. No letters from any collection agency or anything – had I known, I would have called them right-quick to straighten them out. At this point, with it on my credit report, all I could do was get a letter from the library stating that I did indeed pay and put a note on my credit report to that effect.
Texas has or once had a homestead act, which kept your house from being taken due to unpaid debts and/or bankruptcy. I know it got watered down when there was a push to allow people to borrow against the “equity” in their homes. Does anyone know if any state prevents the taking of a house when mortgage and tax payments are current?
@DrGirlfriend: You need to read the FCRA and the FDCPA. There is more than you can do that just getting a note.
The collection agency didn’t arrange for the house’s sale at auction. When the collection agency’s court case went to trial and the defendant wasn’t there, the plaintiff wins by default. Yes, the judge should have ordered garnished wages or forced bank account withdrawl, but apparently chose to force the money be taken from the real estate equity. I agree that only something as serious as mortgage foreclosure should be able to result in losing one’s home.
Collection agencies are often extremely shady operators. Always communicate with them in writing and keep everything in a file for a couple years after it appears to be resolved.
Keep in mind many mortgage/real property laws are legistlated at the state level. Utah isn’t exactly a model state on many things, property laws being one item where they’re very different from other states.
Without seeing the specific legislation that covers this sort of thing, it would be impossible to speculate.
On a different note though…how the hell did the title of the house only sell for 1500 bucks? How crappy is this house that she’s paid 50k in mortgage payments on? Noone offered 2 grand? Sounds odd to me.
My dentist is my father in law. If he takes the house, we (me, my wife, and our three kids) all move in with him. I don’t see this happening anytime in my future.
I kind of wonder why they didn’t just garnish her wages, unless she doesn’t make any…
@quail: Depends on the state. This lady is in Utah, so I doubt Texas law applies to her. In my state (Illinois – equally unapplicable to her) a judge can give a litigant a lien on the debtors house, but can’t force it’s sale unless everyone is represented (including the primary lienholder). A lien in this case basically means that the debtor can’t refinance or sell until they satisfy the debt.
Why am I the first person to bring up
Pennoyer v. Neff?
I love that the president of the collection agency, David Saxton, wouldn’t respond to ABC news.
I hope enough people contact (davesaxton@north-american-recovery.com) him and he 1) returns this woman’s house and 2) takes an ethics course.
It is one thing to owe a bill of $68 dollars or even include the legal fees, but to take her house?!
Who is this “Jarmaccc Properties”? A Google search on them doesn’t turn up anything, not even an official website.
But if they’re Utah-based, I think it might be a good idea for the locals to do a little protest outside of their primary place of business. Nothing illegal, of course–merely a gathering of concerned citizens who feel a civic duty to inform the public about how Jarmaccc Properties does business.
@CreoleSugar: I love that the president of the collection agency, David Saxton, wouldn’t respond to ABC news.
I hope enough people contact (davesaxton@north-american-recovery.com) him and he 1) returns this woman’s house and 2) takes an ethics course.
It is one thing to owe a bill of $68 dollars or even include the legal fees, but to take her house?!
This happened in 1996. Aside from the fact that the collections agency never owned her house (they just collected their money from the proceeds of the sale), you think it’s a worthwhile idea for the Consumerist community to bombard the CEO with email? What exactly would you like us to say?
“Please go tell the current owners of the home, who probably bought it in a fair way, to leave and give it back to the woman who owned it in 1996. Thank you.”
Suggesting to him to take an ethics course is another moot point. If he was the CEO in 1996 and still is today, he’s probably not interested in ethics.
I’m scared to even buy a house these days, I think I’ll just rent for the rest of my life.
@dmuth: Who is this “Jarmaccc Properties”? A Google search on them doesn’t turn up anything, not even an official website.
I went to http://www.utah.gov and was able to find a complete record of the company and who the LLC’s registrant is. I am choosing not to post the info though.
What exactly would you like us to say?” I’d like you to keep quiet. Thanks!
My point is that the collection agency could have sought other ways to get the money – like wage garnishment. Why go to the extreme and allow it to result in this woman (and her children) losing their home.
And as for the CEO’s interest in ethics are you saying that people don’t ever change?
That once an asshat always an asshat?
Something does not sound right. While it is certainly possible that the collection agency lied to the court about notifing her of the action, before a sheriff’s sale took place, the sheriff’s office directly would have given her 30 days notice of the auction. This is the point where she needed a lawyer. She probably ignored the sheriff’s sale notice and then found herself without recourse because the window to challenge this has expired.
This all dates back to 10 years ago. I would be curious as to the final outcome.
@CharlieInSeattle: Me too, buddy. I was sued for a debt that wasn’t mine, and had a default judgment entered against me without being notified. The first I heard about it was when it showed up on my credit report.
Fortunately, I was able to prove pretty definitively that a) it wasn’t my debt, and b) I wasn’t served. Had the circumstances been even a little bit different, I could easily have been on the hook for that.
Anyone who really thinks something like this is implausible has just been lucky so far.