Couple Spends Five Years In $1.2 Mansion Without Ever Making Mortgage Payment

It now takes an average of 634 to foreclose on a home in Maryland, but one couple has managed to live large in their 4,900 square-foot abode on the Potomac River for nearly three times as long — all without ever having made a single mortgage payment.

The couple, former house-flippers turned foreclosure-fighters, actually spent very little on the $1.2 million property that they purchased in late 2005. Not only they get a mortgage for $1 million, they also found another lender to foot the down payment.

But when the first $7,600 mortgage payment came due in 2007, the couple, who owned several buildings at the time, decided to focus on keeping up their income properties rather than the one that only served to drain their income.

“Do we put the money we had left in this one? Or is it better to spread it to the others?” the husband explains to the Washington Post about their mindset at the time.

The first foreclosure attempt in 2007 was stalled after the wife declared bankruptcy, a claim that was later dismissed at her own request.

In 2010, the latest company to buy the note on the couple’s home attempted to foreclose. They agreed to a short sale at the low, low price of $799,000 but no one was willing to pay even that price.

The couple says they offered to make payments to this particular servicer, but were told “no thanks,” and that the servicer preferred to foreclose instead.

They requested mediation from the state, but didn’t show up to the hearing, claiming they never received the notice. A Circuit Court judge ordered the house sold.

But the wife then filed for bankruptcy again, this time in Georgia, where she owned another property. This stalled the foreclosure process until this past July, when it was finally auctioned off.

The end? Nope.

See, the couple challenged the auction sale, claiming they had a tenant in the building, which could keep them in the house even after the sale.

But when it came time for the hearing on this issue, the mystery tenant did not appear with the couple in court, in spite of the judge ordering that they be in attendance.

As a last-ditch attempt, the couple tried to claim that the servicer could not prove it owned the house and that documents had been robosigned. Alas, the lawyer for the servicer was able to provide documentation right then and there showing that all the paperwork was in order.

So the judge ordered the couple evicted from the house and they are just waiting to be evicted by the sheriff.

“People think, because you haven’t paid, you must be a bad person. But not everything is black and white,” says the husband, who is still hoping an investor will swoop in, buy the property and then sell it back to the couple. “A lot of things happen between the lines.”

A million-dollar mortgage goes unpaid for years while couple fights foreclosure [Washington Post]

Thanks to Max for the tip!

Comments

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  1. dolemite says:

    “A lot of things happen between the lines.” You mean like buying up real estate then having a housing market collapse? You played hot potato and was the last one holding it. Sounds like they played every dirty trick in the book too.

    • smo0 says:

      Good for them working the system.

      • juggler314 says:

        That’s absolutely ridiculous. I can be ok with someone not having the money and deciding to stop paying mortgage payments and gladly accepting the eventual foreclosure and eviction. However deliberately gaming the system to stay longer (multiple bankruptcies, gaming the courts, etc) is just wrong – it’s practically outright theft of services.

        People like these are half the reason the mortgage market had a bubble in the first place and you are congratulating them for continuing the same bad practices that led to the crisis in the first place?

  2. Cat says:

    “People think, because you haven’t paid, you must be a bad person.”

    “But in this case, you’d probably be correct.”

    • CTrees says:

      Yeah… I think we can blame the OP, this time. What they are doing may be legal, but it’s just as sleezy as the other side.

      • MaxH42 thinks RecordStoreToughGuy got a raw deal says:

        Oh, I agree, but I submitted this because in the end, I’m not rooting for either side to win. I’m rooting for a long, drawn-out, wasteful war of attrition. It’s like if BoA sued Comcast.

      • OnePumpChump says:

        It’s hard to like them, but impossible to feel sorry for their victim.

  3. chefboyardee says:

    “It now takes an average of 634 to foreclose on a home in Maryland”

    634 what?

  4. shoan says:

    wow these people get the look of disapproval from me. ‡≤†_‡≤† I don’t think they had any attention of paying for these house in the first place.

  5. vastrightwing says:

    Where’s Bank of America when you need them?

  6. nbs2 says:

    Read the article yesterday, and realized that what they were doing totally justified everything that the banks are doing.

    They observed something to the effect of, “they banks are going to use every legal weapon that they have, we’re just doing the same.” In other words, banks are justified – at least when they are skating within the law as written, loopholes or not.

    Nevertheless, I don’t see how this is going to end well for them, they seem to be living under this nutty delusion that they really aren’t to blame for any of this – that they could make $200k in six months, take lavish vacations, etc – that it is all just bad luck that will pass on its own.

    • milkcake says:

      I can tell you that $200K does not buy a couple a lavish vacation.

      • Cat says:

        WTF? Are you a wall street banker or what?

        200K would be the vacation of a lifetime for me.

        • falnfenix says:

          yes, but you’re a plebe. in that part of Maryland it’s all rich people, and lavish to them isn’t the same as lavish to people like you and i.

          $3k would be lavish to me. :

    • Derigiberble says:

      Demanding proof that the bank owned the loan and that it wasn’t part of the robo-signing stuff I think was perfectly reasonable on their part. It seems that at some point they crossed the legal line by doing things such as asserting that they have a tenant at the property (who they then couldn’t produce at a hearing and seems to have never existed). The fact that they never made any payments makes me rather suspicious that the mortgage paperwork was fraudulent in some way.

      Oh and Maryland isn’t a non-recourse state. When that property sells for $600k to some vulture investor the bank is going to sue these two for the remaining loan amount. And it seems that they’ve used up their bankruptcy filings so they are going to be in a world of financial hurt.

      • lettucefactory says:

        Your point about non-recourse is probably exactly why they are fighting so hard, and so dirty.

  7. Mike Toole says:

    You know, five years ago, I would’ve thought these are just a pair of deadbeat assholes. Given the criminal conduct by the banking and finance industry that’s come to light since then (and the housing collapse in particular), I just think they’re gaming the system really cleverly.

    Now, who wants to pay my rent for the next five years? Anyone?

    • Stickdude says:

      No, they’re deadbeat assholes *and* the banks engaged in criminal conduct.

      One does not justify the other.

    • hmburgers says:

      If we practice “eye for an eye” eventually everyone will be dead/blind.

      A murder does not justify a murder, and a crime does not justify a crime–even if thanks to legalese it’s not considered a crime.

    • Robert Nagel says:

      I will agree to pay your next 5 years rent. Please forward you checking account information so I can deposit the money in your account. In addition I will send you certified checks for you to cash and since we are such good buddies I will give you 25% for your time and you forward me the rest in cash.

  8. Cosmo_Kramer says:

    “People think, because you haven’t paid, you must be a bad person. But not everything is black and white.”

    This time it is, asshole.

  9. Buckus says:

    Well, since I only read the headlines, they got a house for a one dollar and 20 cents? Where do I sign up for this house?

  10. nopirates says:

    “It now takes an average of 634 to foreclose on a home in Maryland”

    wha?????

    • LloydDobler says:

      Don’t forget :
      “Not only they get a mortgage for $1 million, they also found another lender to foot the down payment.”
      Does anyone read these things before they get posted?

  11. Bugley says:

    Don’t mean to pile on, but…
    “Not only they get a mortgage for $1 million, …”

    • who? says:

      I think you missed the part where not only did they get a mortgage for $1 million, and another loan for the down payment, but they got the loan in 2005, and their first payment wasn’t even due until sometime in 2007.

      It sounds like there was plenty of blame to go around on both sides. They all deserve each other.

  12. ARP says:

    Two wrongs don’t make a right. This isn’t black and white. They’re as*holes who are gaming the system and are most definitely bad people.

  13. Haplo9000 says:

    This article is one long proofreading FAIL…it makes me sad.

  14. Tim says:

    I would NEVER make a mortgage payment on a $1.2 mansion. In fact, why would you even need financing for a $1.2 purchase?

    • Bsamm09 says:

      Why would you want to tie up $1.2m in cash in an illiquid asset when financing is cheap? Invest the money in securities that produce tax advantaged income and you could beat the interest you are paying.

      If something bad happens down the road, you can withdraw all but enough to pay the mtg for a few years until things get better and you can hopefully replace the amount withdrawn. That way you can still live and not have to worry about having to sell the house.

      • Mimbla says:

        I think Tim is referring to the fact that the Consumerist article’s title says $1.2 mansion rather than $1.2m mansion. That is a crucial m. Unless my sarcasm detector is broken and you’re referring to something else… what can I say, it’s Monday.

  15. chemmy says:

    634 goats? sheep? llamas?

    Let’s me a little more specific here, Chris(Phil)

  16. I Love Christmas says:

    Do you guy proofred anything amymore?

  17. crispyduck13 says:

    Yeah, they are bad people gaming the hell out of the system. After all we’ve been through with banks in the last 5 years a large part of me doesn’t seem to care.

    Game on bitches.

  18. hmburgers says:

    “People think, because you haven’t paid, you must be a bad person. But not everything is black and white,”

    I’m going to go out on a limb here and say that you sir, are a “bad person”, but you have rationalized your badness by saying it’s just a greedy bank you are hurting.

    You are clearly manipulating the system for your own gain, and you know full well that it’s “wrong”.

    Further, you are probably the type who would hide behind “…but everything we did is legal”, that’s fabulous, but you know that if everyone in the country did the same thing we’d be ground to a halt and then inundated by layers, upon layers of legal BS to the point that it would be impossible to just about anything.

    In a nut shell: You’re the type of couple that is the reason why “we can’t have nice things”. Stop being a jerk.

    • chargernj says:

      Yeah, but one of the problems in this nation is that EVERY bank is already engaged in those sorts of legal maneuverings. For some reason we get up in arms when an actual human being does it though.

      Not that I don’t think they are bad people, they are, it’s just that when I see two assholes fighting, I hope that neither one is able to walk afterward.

  19. krom says:

    “an average of 634″

    634 what? Average credit score? Dollars owed? Hours spent on Popcap?

  20. BlueHighlighterNextToACoozie says:

    “The couple says they offered to make payments to this particular servicer, but were told “no thanks,” and that the servicer preferred to foreclose instead.”

    Just by them throwing this line out there pinpoints the arrogant type of entitled person they are. I hear that shit all day long, someones 15K behind on their payments and acting like Jesus because they want to pay 500 dollars by the end of the month and the bank wont accept it. I’m sure they also asked the bank why they cant just “tack the past due amount to the end of the loan?” And really the failing investment properties that drove you to your position is more important to keep than your home? Or did you only make the payments that you could afford as you were treading financially.

    Damn rich people in foreclosure make me mad. Half of them wear it like its a badge of honor to have investment property in FC.

    • lettucefactory says:

      That is exactly what bothers me most about this situation. When their shell game imploded, they made the calculated decision to try and wring a few more pennies out of the housing market instead of making mortgage payments. It’s just sleazy.

  21. Gorbachev says:

    These are the sort of people who cause everyone else’s interest rates go up to cover the losses banks make on their mortgages.

    Leeches. This is nothing but mortgage fraud, and the “honest” couple should rot in jail for it.

  22. KrispyKrink says:

    What a missed opportunity. Just pay the $1.20 and sell it for $1.2 Million.

  23. AcctbyDay says:

    634 What, years? Days? It’s like monkeys type up our articles.

  24. JGKojak says:

    I say what’s good for the goose…

    Good for them. The bank will spend resources to evict them from their million dollar home and hopefully leave 10 other more innocent borrowers alone.

  25. CalicoGal says:

    These people are clearly fraudsters. The WaPo article reads:

    “During the boom, they set out to become mini real estate moguls, … In the process, Keith Ritter, 54, went from being on probation for bankruptcy fraud and making minimum wage to being a successful real estate investor and landlord with a six-figure income.”

    I believe that they knew exactly what they were doing from the get-go and are playing the “victim” card, especially with this:

    “He and Janet pray daily, read the Bible, attend Pentecostal services and are reliable tithers. Their faith fuels their hope that they can somehow stave off eviction.”

    They lived WAY beyond their means, with no forethought or ethics.

    Give me a break.

    • Buckus says:

      As this is unlike banks how? Treat these transactions the way they actually are – amoral* – and you’ll find inner peace.

      *amoral != immoral. It means without morals, which is what a contract is, amoral. As long as you abide by the language of the contract it’s all good in my book. if they can keep using legal maneuvering to stay in the house longer, and it’s within the laws, then it’s ok.

      • madanthony says:

        I’m pretty sure the language in the contract probably included that they had to, you know, make mortgage payments. Which they failed to abide by.

    • lovemypets00 - You'll need to forgive me, my social filter has cracked. says:

      Pentecostal services? Yikes, aren’t those the people who handle poisonous snakes in church? And it’s so nice they’re reliable tithers, when that money should have been used to PAY THEIR STUPID MORTGAGE!

      The more I read about these two, the angrier I get.

  26. whogots is "not computer knowledgeable" says:

    634 what? What? The suspense is killing me.

    Listen, guys. I understand the commitment to tpyo-riddled prose (it clearly generates a ton of cheap pageviews), but would you please, please, please, at least commit to proofreading your ledes for coherence?

  27. tundey says:

    I try not to take sides in a fight between criminals.

  28. SBR249 says:

    Pretty sure if I was buying a $1.2 mansion I won’t need to make any mortgage payments either. In fact, I’ll take 5 right now…

  29. human_shield says:

    Scammers…they need some jail time.

  30. Lucky225 says:

    “People think, because you haven’t paid, you must be a bad person. But not everything is black and white,” says the husband, who is still hoping an investor will swoop in, buy the property and then sell it back to the couple. “A lot of things happen between the lines.”

    God damn racists.

  31. ancientone567 says:

    These people are total scum and anyone can see that. BTW I don’t even have a dollar to my name.

  32. Extended-Warranty says:

    Scumbags.

    For some reason, most people who do this for a living aren’t the most ethical that I’ve seen. They leech off society to make money doing nothing. If they fail, they don’t care, someome else pays.

  33. DrRonster says:

    I’ll offer $2. That’s a lot higher than the $1.2 in the headline.

  34. LabanDenter says:

    OCCUPY FORECLOSURES.

  35. jiubreyn says:

    In the linked article it says an average of 634 days to foreclose on a property.

  36. farker says:

    634 what, days? weeks? #corrections

  37. NotEd says:

    Ah, real estate price in the DC suburbs.
    I grew up and lived in Montogomery County before moving out of state 3 years ago. Crazy real estate prices was a primary reason for relocation.

  38. thaJack says:

    The article was boring, but I was intrigued when the title said that the couple spent five years in a mansion that costs just north of a dollar.