A Central Islip military veteran and his wife won their 12-year battle to save their home when the appellate division of the state Supreme Court threw out the foreclosure case against them.
Christopher and Barbara Joseph can keep their home “free and clear” of its mortgage now that a four-judge appellate panel ruled in their favor, said Ivan Young, the Josephs’ attorney. The judges unanimously overturned a lower court’s decision on Thursday, finding that their lender, U.S. Bank National Association, missed the state’s six-year deadline to file its second foreclosure lawsuit, court papers show.
“It’s a big weight off my shoulders, a big relief,” Christopher, 55, said in a telephone interview from his home. “It’s taken a lot of stress and pressure off us.”
Roughly a decade after the mortgage meltdown, a small but growing number of homeowners are winning foreclosure cases because the original lawsuits against them were deeply flawed and were dismissed by judges. In some instances, by the time lenders got around to filing new cases, the six-year deadline — which started running when the lender called in the full amount of the loan when it first foreclosed — had already passed.
Young said he has more than 30 clients seeking to get their foreclosure cases thrown out because the deadline has passed. Last year, the Appellate Division ruled in favor of his clients Sound Beach homeowners Fred and Theresa Tovar in a similar case.
The Josephs’ original foreclosure case dates back more than a decade. Christopher, who was deployed to Iraq as an Army staff sergeant repairing military vehicles in 2002, suffered a back injury when he leapt from a military truck under enemy fire. Upon his return he got a job preparing military trucks for combat, but his injuries made it impossible to perform the demanding physical labor, and he lost the job, he said. The couple fell behind on their mortgage payments and in 2006 their lender sued to foreclose.
The pair, who have three grown daughters, pulled more than $18,000 from their savings and the college fund of their youngest daughter, and they tried to negotiate a loan modification, but the mortgage company kept rejecting their applications, said Barbara, 51, who works as a teacher’s assistant.
Meanwhile, their adjustable-rate monthly loan payments skyrocketed from $1,839 to $4,586, the Josephs said.
In 2013, a judge threw out the foreclosure lawsuit, finding that the lender never properly served the Josephs with court papers. The lender filed a new case in 2015, and a trial court judge ruled in the lender’s favor.
Last week, though, the four-judge panel ruled that the lender missed the six-year deadline to file its second foreclosure lawsuit, since the clock started running in 2006. The bank had argued that the clock stopped at various times due to court maneuvers, but the appellate panel rejected that argument.
A spokesman for the Josephs’ mortgage servicer, Wells Fargo, said, “We respect the court’s decision and are still considering whether or not to undertake further appeal.”
Such cases are a “legacy” of the mortgage meltdown of about a decade ago, said Allison Schoenthal, who represents lenders as a partner at Hogan Lovells in Manhattan. “It’s still a hot topic, and it continues to be,” Schoenthal said.
Young said his clients still have a mortgage lien on their home, but they can file court papers to have it lifted.
Christopher said they celebrated in church on Sunday, and they will renew their efforts to fix up their home, which was damaged by superstorm Sandy and Tropical Storm Irene.
“We’ve gone through two hurricanes, and insurance didn’t cover everything,” Christopher said. “Now that we have that issue off our head . . . there are a lot of things that need to be repaired.”