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Dad tries to reverse foreclosure on his former Dunedin home

Michael D. Carlson recently filed a motion in Pinellas Circuit Court seeking to undo a foreclosure judgment against him from 2008, saying he never knew about the legal proceeding until it was over.

As part of the motion, the 42-year-old divorced father of three also wants his home in Dunedin back. The problem is, Carlson's lender, Bank of America, sold it more than a year ago to another couple, who thought they had bought the foreclosed property free and clear.

Legal experts say that in trying to reverse a foreclosure after the home has been sold to a third party, Carlson's case may be the first of its kind — but it's unlikely to be the last.

Whether it's robo-signed documents, falsified affidavits or failure to properly notify defendants, as claimed in the Carlson case, shortcuts by lenders' law firms could prove to be land mines in the legal system. When triggered by homeowners who feel their cases were improperly handled, such issues could raise ownership questions for years to come.

"One or two cases like this could create a lot of waves," Alan White, a law professor and foreclosure expert at Valparaiso University in Indiana, said of the Carlson motion.

"The hardest case of all is when the property has already been sold and innocent parties are involved. But if the process was fundamentally deficient and the homeowner was deprived of constitutional due process, it's conceivable the court could set aside the foreclosure."

Bank of America filed its foreclosure action against Carlson on Feb. 1, 2008, saying he was several months behind on his mortgage for 1020 Forest Court in Dunedin. Carlson and his family bought the spacious, corner-lot home in 2004. They moved to California in March 2007, leasing the property to a tenant.

Notice of the foreclosure action was given to the tenant's 17-year-old son, according to an affidavit in the court file. Seeking to find Carlson in California, a process server gave a copy of the complaint to "Jane Doe," an unidentified tenant in a three-unit apartment building in Alameda, Calif.

The judge in Pinellas accepted the process server's affidavit as "substitute service" and entered a judgment against Carlson on April 1, 2008. From start to finish, the foreclosure case took two months.

But in a recent interview, Carlson says he never lived in Alameda but was living in a Sacramento suburb at the time the complaint was served. He suspects the bank mistook him for his brother Steve, who was living at the Alameda address and involved in a separate foreclosure lawsuit with Bank of America at the time. Michael Carlson says he and his brother were estranged during this period and he never learned of his foreclosure case. Nor does he know the identity of "Jane Doe" who, according to the process server's affidavit, "refused to disclose her name."

A spokesman for ProVest LLC, the Tampa company that hired the California process server, said it is reviewing the Carlson case, though it is not party to the complaint.

Carlson, who had a telemarketing business in California, said he fell behind on his Dunedin mortgage in late 2007 after the tenant stopped paying rent. By April 2008, his marriage headed toward divorce, Carlson drove back to Dunedin. He entered his former home to find the tenants gone and a pile of papers on the foyer floor. Among them was notice of the foreclosure judgment against him.

"I remember thinking, 'Yeah, it seems like this is how my life is going,' " Carlson said.

Anxious to get his home back, Carlson called Bank of America as well as Greenspoon Marder, the Fort Lauderdale law firm that represented the bank in the foreclosure action.

Neither Bank of America nor the law firm would comment on Carlson's claims or motion to vacate the foreclosure judgment.

Carlson said he had at least eight conversations in April and early May 2008 with a bank representative who told him he would be able to bring his loan current and get his home back. He said she assured him there were no plans to sell the Dunedin property.

Instead the bank put the home up for auction on May 5, 2008, and retook possession, outbidding three other parties. Carlson said it infuriated him that the bank went through with the sale while he was negotiating in good faith. "But she (the Bank of America's representative) seemed surprised about the sale as well," Carlson said. "Communication between the bank and its law firm seemed lacking."

After the sale, Carlson kept pushing for a resolution. A letter to Carlson from the bank's law firm in late May confirmed that Bank of America was "willing to accept reinstatement." A few days later, the bank sent its lawyers and Carlson a calculation of the amount to be paid: about $38,500.

"In the event that you cannot reinstate in full, there may be an alternative to foreclosure," the bank's letter said.

Carlson said he was ready to raid his retirement account and write a check for the amount he owed. But nobody at the bank could answer a simple question: How do I know, when I pay this, I'll get clear title to my house?

"I didn't want to just send my payment into la-la land," Carlson said.

With no clear answers forthcoming — and his kids on their way from California for the summer — Carlson gave up and rented an apartment in Dunedin. But more than two years later, after reading about procedural problems with foreclosure cases, Carlson resurrected his battle against Bank of America.

"It troubled me this had happened because I didn't think it was fair," he said. "I want to get my life back in order."

Carlson contacted Mark Stopa, a St. Petersburg foreclosure defense attorney, and his motion to vacate the foreclosure judgment, cancel the sale and regain possession of his house was filed last month. Stopa said that everyone, even a homeowner behind on his payments, has the right to defend his property from foreclosure in court.

"It's one of the most basic constitutional rights," he said. "If you never have a chance to defend yourself, if you haven't been served properly, you may have a bona fide claim to vacate the foreclosure, even many years later."

If successful, Stopa said, Carlson's motion could lead to eviction of the current owners of the Dunedin property, Gail and Kevin J. Winters, who are not parties to the lawsuit.

"It's a tough situation for the Winters, but my client's claim takes precedence over theirs," Stopa said. "Their remedies would be against the Bank of America and their title company."

The Winters' attorney, Darryl R. Richards of Tampa, said his clients were shocked to hear their ownership rights might be in jeopardy.

"They're understandably upset, but we're going to do everything we can to defend them," he said. "With all the foreclosures that have occurred, I think problems like these will continue to arise."

Stopa bets that more foreclosures will boomerang back to the courts.

"This is perhaps the best example yet of the problems that transpire when foreclosures are done too hastily," he said. "You have to do things right from the very outset. If not, the cleanup will be far worse."

Times researcher Carolyn Edds and freelance producer Ilyce Meckler contributed to this report. Kris Hundley can be reached at khundley@sptimes.com or (727) 892-2996.

Dad tries to reverse foreclosure on his former Dunedin home 11/08/10 [Last modified: Tuesday, November 9, 2010 9:21am]

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