Judge Rules In Favor Of MFI Miami Client, Tells one of Linda Orlans’ Attorney To Go Back And Do His Homework
Steve Dibert, MFI-Miami
MFI Miami Client Mary Eveleigh lives in the picturesque town of Charlevoix, Michigan, a quiet resort town that caters to America’s low key and unassuming millionaires. It’s the type of place where the Boy Scouts still recite the Pledge of Allegience out loud and Victorian homes look like something out of a Norman Rockwell painting.
But back in 2006, something was lurking behind the facade of this Norman Rockwell Americana that would almost cost Mary and her husband, Bob their piece of the Charlevoix landscape.
The Great Recession was still in its infancy when Bob Eveleigh’s tile installation business started feeling it’s affects. His wealthy clients stopped calling or began scaling back on projects and his commercial clients began drying up. Soon, they were running behind on making their mortgage payments and while Bob attempted to salvage his business by taking jobs wherever he could find them, Mary was tasked with trying to save the house.
MFI Miami Client Mary reached out to mortgage broker Dan Giroux from Crest Financial who originated the loan she was in. Giroux then put her in contact with unlicensed mortgage broker who structured a straw deal that closed on the last day of her redemption period and this is where this 6 year ordeal of fighting to save their house began.
The unlicensed broker drew up purchase papers showing the Eveleighs selling the house to him for their outstanding balance of $253,000. He then sold it to an investor for $350,000 with $16,000 being kicked back to Giroux as a referral fee (in violation of Section 6 of RESPA). The investor then wrote up a lease-option with a monthly payment of $2000 a month and a purchase price of $419,000 based on a fraudulent appraisal for $650,000.
About 3 months into the lease-option, MFI Miami Client Mary received a call from the investor threatening to evict her and Bob because they had only been making partial payments. In 2007, the investor took Bob and Mary into court to evict them from the house. During discovery it was learned the investor and the unlicensed broker had Bob and Mary sign two lease agreements. Mary’s copy stated her lease payments were $2000 while the investors copy showed $2500. The District judge ruled that because the lease contained an option to purchase the property that the lease-option agreement was an equitable mortgage and not a lease. Therefore, the investor would have to go through the steps of foreclosure as prescribed under Michigan law.
The investor then appealed the ruling and during the process of the appeal, he refinanced the house with Countrywide Financial. Countrywide agreed to refinance the property with conventional financing through Fannie Mae because he failed to disclose that the question of his ownership was being disputed in court and he claimed he was living in the house. So in other words, he lied to get the house refinanced. In 2008, the Circuit Court upheld the District Court decision and ruled the Bob and Mary’s lease option was indeed an equitable mortgage.
At the end of 2010, the investor stopped making payments on the Countrywide loan and it went to Sheriff’s Sale. In 2011, during the fifth month of the investor’s 6 month redemption period (Michigan has a 6 month Sheriff’s Sale redemption period), the investor decides to proceed with foreclosing on Bob and Mary judicially using a seldom used Michigan law allowing judicial foreclosures.
Bob and Mary hired a lawyer out of Petoskey, Michigan who had to be by far the most arrogant and incompetent attorney I have ever dealt with. He insisted on doing things his way and like most attorneys who I deal with that insist on doing foreclosure defense their way, he lost. Not only did he charge Bob and Mary $5000, he came to court unprepared and couldn’t answer the judge’s simplest questions about issues regarding foreclosure cases. So the judge ruled against Bob and Mary and allowed the Sheriff’s Sale for $419,000 to proceed.
However, not all was lost. Because the investor waited to bring the foreclosure action against Bob and Mary until the end of his redemption period, he lost his rights to evict them at the end of what would have been their six month redemption period.
At the end of the investor’s redemption period, the home reverted back to Fannie Mae. The MFI Miami Client then hired attorney Allen Telgenhof, who was recently elected Charlevoix County Prosecutor, to request Judge Richard M. Pajtas to clarify if Bob and Mary were indeed the owners of their home. The judge agreed and instructed the Charlevoix County Register of Deeds to make the appropriate changes on the public record.
Orlans Associates owned by deep pocketed Michigan GOP donor Linda Orlans tried to sell the house through a Charlevoix real estate broker. MFI Miami Client Mary soon informed the broker that their information was incorrect and that two judges in Charlevoix County had already ruled she and Bob were the owners of the house not the previous hard money investor.
The broker then informed Orlans, who tried to evict Bob and Mary. The attorney from Orlans tried to present this case to the judge as if Bob and Mary were nothing more than tenants in a house they foreclosed on. Unfortunately for Orlans, the judge who heard the case was also the same the judge who heard the original eviction case against Bob and Mary in 2007. In their arrogance, Orlans forgot Charlevoix is also a small town. Mary sat on the Zoning Board of Appeals at the time so the judge knew more about what was going on with the case than the attorney from Orlans and didn’t appreciate some big city law firm from the Detroit suburbs coming into his courtroom feeding him a bunch of bullshit.
So the judge dismissed the eviction case with prejudice and told the Orlans attorney, “Next time, do your homework before you bring a case in front of me.”