Couple Fight Foreclosure in ‘Bizarre’ Loan Case

Inside Subprime: August 5, 2019

By Grace Austin

A major bank recently settled with an elderly Massachusetts couple over a loan foreclosure case .

According to the Berkshire Eagle, James and JoAnn Spaulding, who have lived in the aforementioned house for many years, have accepted a settlement from their bank.

But the journey to the resolution hasn’t been easy. The Spauldings say they faced years of threats of foreclosure on their home from the financial institution, calling the bank’s actions unethical. It all stems from the bank’s insistence that the couple’s home was tied to a mortgage attached to a small piece of land behind their home.

The case was set to go to district court in mid-July 2019, but a settlement was agreed upon before it could go to trial. “The confidential agreement discharges the $20,000 mortgage and compensates the couple for attorney’s fees, emotional distress, trespass and unfair trade practices,” according to the Eagle, which has been following the legal case.

Just days before, a judge told the bank to stop trespassing on the couple’s property. The bank had been sticking foreclosure notices on the home. The bank was also ordered to stop sending the Spauldings letters with the home listed on auction websites.

The couple’s attorney thinks the judge’s contempt ruling helped lead to the settlement.

The Spauldings’ ordeal dates back almost 20 years.

JoAnn’s mother took out a $20,000 mortgage in 2002 to pay rising bills. It was actually attached to the parcel of undeveloped wetlands adjacent to their family home.

The couple said it was predatory lending that took advantage of the then-75-year-old Josephine Curtiss, who was sick at the time. Even after filing for bankruptcy, Curtiss still was required to pay down the mortgage.

“They shouldn’t have given her the loan in the first place,” James Spaulding told the Berkshire Eagle. “She was not well and only got credit when her husband died. She didn’t have any resources to pay that back.”

The Spauldings said they started paying off the mortgage in 2003, soon after they learned it was taken out by Curtiss. They started missing some of the monthly payments in 2008 due to financial hardship, which is when the legal struggle began with the bank.

In 2015, they hired a new attorney to handle the increasingly complex legal case. That’s when their current attorney realized the mortgage wasn’t actually attached to the house, and so they weren’t technically at risk of losing the family home, which JoAnn’s father built in the 1950s.

The couple then sued the bank in 2016.

The bank claimed in legal documents that they tried to work with the couple, and that the Spauldings didn’t let the bank know Curtiss had died in 2010.

But the Spauldings insist that the bank’s communication was poor and its behavior was deceptive.

Their lawyer, Peter Puciloski, said it was the most unusual mortgage case he’s experienced in the decades he’s been practicing law.

Puciloski also said that all of the legal fees accumulated over the years far outnumber the actual value of the Spauldings’ home.

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