Wednesday, August 20, 2008

What goes ‘round comes ‘round

When a uber-squaliforme like C-BASS/Litton Loan is allegedly being scammed using some of the exact same kinds of maneuvers it perpetrates against borrowers, this Judge has to grit my teeth and bite my tongue – sort of.

In what has been going on for many months in the Texas Federal District Court (Southern), a read of some of the pleadings and claims reveals what’s now left of C-BASS (something called “Pledged Properties II”) doesn’t see the irony of having someone do to them what they had Litton do to borrowers all these years.

It’s far too complex to explain the intricacies of property and transfer tax liens here, but suffice it to say, what’s left of C-BASS was making RICO claims against a number of parties that allegedly obtained a foreclosed property with some fast legal(?) footwork that seems to have some of the footprints of how Litton operates against borrowers.

The story starts with a condo owner’s association foreclosure sale in July of 2007 and it degenerates into thousands of pages of legal wrangling over who did or didn’t do what and when. I hope I’m not the only one who see’s the irony in some of these pleadings by counsel for C-BASS:

“In addition, neither Plaintiffs, nor Plaintiffs’ counsel could obtain the payoff information on the transferee tax lien held by (Defendant “D”).”

“By preventing Plaintiffs from obtaining the payoff amount and paying off the transferee tax lien, (Defendant “D”) was able to foreclose the Real Property as a result of the (Defendant “T”)’s “failure” to pay the attorney’s fees and costs within five (5) days. At the foreclosure sale, (Defendant “D”) received $106,500.00 from (Defendant “I”), which equates to a net profit of $94,131.05 from (Defendant “D”)’s wrongful foreclosure.

“Additionally, once (Defendant “D”) sold the Real Property at the [tax lien] foreclosure sale, Plaintiffs’ only hope to redeem the Real Property from (Defendant “I”) was to pay (Defendant “I”) 125 percent of the purchase price or $133,160.00 within 180 days of (Defendant “I”)’s deed being recorded in the Real Property Records of Harris County. See Tex. Tax. Code Ann. § 32.06(k), (k-1). Here, (Defendant “I”) would make a net profit of $26,632.00 by and through the wrongful foreclosure, and Plaintiffs are out $133,160.00 as a result of the entire scheme. Unfortunately, Plaintiffs’ last day to redeem the Real Property has passed during the course of this litigation.”

It’s going to get interesting if and when there is a ruling on this one. If the defendants are anywhere near as clever as C-BASS’ counsel alleges, this won’t be the only case like it, in fact, they infer among the pleadings that the practice is being used against other mortgage holders.

The Honorable Judge Roy Bean

1 comment:

Tyler Jorgenson said...

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Have a great day!