A homeowner is countersuing Wells Fargo Bank N.A. and its loan servicer, Ocwen Loan Servicing LLC, claiming they misapplied years of mortgage payments before foreclosing on her Coral Springs property.
Wells Fargo filed for foreclosure against Madelyn Grutta in November 2012, alleging she defaulted on a mortgage with a principal balance of more than $286,371.
But Grutta’s attorney said the lender and servicer caused her to default by misapplying payments and incorrectly increasing her mortgage payment by about $2,000 each month following an escrow analysis.
“It’s clear they screwed this one up,” Andres Lopez of the Andres Lopez Law Firm in Fort Lauderdale told the Daily Business Review.
In her affirmative defenses, Grutta claimed she consistently paid her mortgage and missed no payments from 2005 to July 2012. But in 2012, an Ocwen miscalculation reportedly created a $20,000 shortfall in the annual escrow payment for property taxes and homeowner insurance required under the mortgage. The problem seemed to arise in part from a nearly threefold increase in Grutta’s insurance premium, which prompted her to change carriers to reduce costs.
Lopez claims Ocwen uncovered its error and revised its file to reflect a shortage of less than $700 but did not reverse the nearly $2,000 increase tacked on to Grutta’s monthly payment.
“They continued to tell the homeowner her shortage was $20,000 even though their own internal records showed the change,” he said.
Grutta, 75, struggled to make the higher payments totaling about $4,000 per month, Lopez said. She paid about $16,000 before reverting to her earlier monthly installment of about $2,000, prompting Ocwen to refuse payment and start foreclosure.
“Even when she sent the full amount, Ocwen never applied it,” Lopez said. “It just put the money in a suspense account.”
The lender and servicer then added a slew of unauthorized charges for property inspection, appraisal, title search, broker price opinions, attorney fees, foreclosure costs, late charges and other expenses, the complaint said.
“The plaintiff can only add those charges when the defendant defaults on the mortgage and/or note,” Lopez wrote in a counterclaim filed July 17. He blamed Ocwen for creating the default.
Grutta’s eight-count complaint charged Ocwen with fraud, constructive fraud, violation of Florida’s Deceptive and Unfair Trade Practices Act, breach of fiduciary duty and gross negligence. She demanded a jury trial and accused Wells Fargo of wrongful foreclosure, breach of contract and breach of implied covenant of good faith and fair dealing.
Wells Fargo and Ocwen are represented by Jacksonville lawyer Glenn Banner and attorneys in the West Palm Beach office of Clarkfield, Okon, Salomone & Pincus. They did not respond to requests for comment by deadline.
In their affirmative defenses, Wells Fargo and Ocwen denied the allegations. They moved to strike Grutta’s jury trial demand and claimed she failed to mitigate her alleged damages and provide notice to allow time for corrective action in violation of the note and mortgage.
An unrelated Wells Fargo case of an alleged payment mix-up in a foreclosure case ended with a dismissal with prejudice. After a one-day bench trial, Broward Judge Kathleen Ireland ruled Jan. 19 that it would be “unconscionable to allow this foreclosure.”
Margate homeowner Junia Lamour claimed Wells Fargo increased her monthly payments from $1,199 in 2010 to $1,433 in 2012 without telling her.
Wells Fargo’s attorney in that case, Christine Lankey Hall of Choice Legal Group in Fort Lauderdale, did not respond to requests for comment by deadline.
“The problem is that all of this is computerized. There is no human being actually looking at the payment history before a foreclosure is filed,” Lopez said. “One would think that a bank would say, ‘If we’re going to take somebody’s home, let’s look at the history to make sure everything’s accurate.’ ”