As head of civil processing for the Pinellas County Sheriff's Office, Sgt. Tim Grundmann supervised employees who serve subpoenas, eviction notices and notices of foreclosure.
Thus it was embarrassing to Grundmann when a clerk told him:
"You're being sued. You're being foreclosed on."
That was in 2013, when the Tampa Bay area was still reeling from the housing crash and 70,000 homeowners in Pinellas alone had been hit with foreclosure notices. The overwhelming majority of those had not been paying their mortgages and were living in their houses rent free.
But Tim and Carol Grundmann were different. They had been making payments all along. By the time the notice had been filed, they already were two years into what would become a six-year nightmare to prove they were not in default on their loan and that a huge mistake had been made.
The Grundmanns dealt with loan representatives who refused to explain the amounts they supposedly owed, yet told them to "pay up or you'll be homeless." Carol, fighting breast cancer, often found herself in tears of worry and frustration. The foreclosure notice on Tim's credit report meant he couldn't get a car loan or even a credit card from Home Depot.
Finally, in a non-jury trial, Pinellas Circuit Judge John C. Schaefer listened to their story. On Nov. 2, he ruled in the Grundmanns' favor and wrote:
'"This Court has been presiding over foreclosure cases before the crisis, during the crisis and now after the crisis. The Court has never seen such horrible treatment by a financial institution to its customer. It was deplorable."
The Grundmanns bought their spacious home in Seminole in 1997. As values soared, they refinanced it for $280,000 in 2006 with a loan serviced by Bank of America.
Then the recession hit. What happened next is outlined in the transcript of the trial.
The Largo pre-school that Carol co-owned was losing money. In order to pay the school's staff, the Grundmanns started making house payments late in May 2009, although they always made them.
Around December 2010, Bank of America said it would no longer accept the payments. Carol called, and was told she and Tim would qualify for a repayment plan only if they stopped paying their mortgage for three consecutive months. They did as instructed, and the bank put them on a plan requiring $8,000 down and $2,917 a month for six months. After that, their loan would be current.
The Grundmanns paid the full amount. In November, 2011, they got a letter from the bank:
"We are pleased to tell you that we have received the last installment due under our repayment plan agreement dated May 19, 2011… Thank you for fulfilling this commitment. You are now up to date on your home loan payments. You can resume making your normal monthly payments."
Then, Bank of America transferred the Grundmanns' mortgage to a company called Green Tree Servicing.
During the foreclosure crisis, Pennsylvania-based Green Tree was the target of thousands of complaints alleging it harassed borrowers, overcharged them and failed to honor loan modification agreements. Two years ago, it agreed to pay $63 million in penalties and reimbursements in a settlement with the Federal Trade Commission and Consumer Financial Protection Bureau.
The Grundmanns' ordeal with Green Tree began with a statement it sent them shortly before Christmas 2011. It said their account was "seriously past due" and that they owed $17,960 for the upcoming January payment.
Frantic for an explanation, Carol called Green Tree. A representative told her not to worry, that she didn't have to make the December and January payments because Green Tree had not yet received their entire file from Bank of America and didn't know exactly what the payments should be.
"Because we had gone through what we did with the Bank of America, I was not willing to miss a payment," she later testified. "I was not going to get behind, no matter what."
Carol made the December payment and faxed Green Tree the letter showing they were current on their loan.
They continued paying $2,917 each month but Green Tree rejected the February, March and April payments. A representative insisted they pay what Green Tree claimed was the entire past due amount — $12,315 to $17,428, depending on the month, with no explanation of why the amounts varied so much.
"I asked (the rep) to prove to me how I owed the money, to send me some type of statement showing where the money came from, why I owed it," Carol testified. "And she said that she didn't have to prove that I owed it; I had to prove that I didn't."
In 2012, the Grundmanns learned about a loan modification program designed to help borrowers like them who owed more than their houses were worth. When they told the Green rep about it, she said it would be a waste of their time: Green Tree had their information already and could also offer them a modification.
To qualify, the rep said, the Grundmanns had to make three trial payments of $1,421 each. Then they would receive a final modification with the same payment and a new principal balance of $204,000 — $60,000 less than their current balance.
The couple successfully completed the trial and continued the payments. But when they received the written loan modification, the terms were completely different from what the rep had told Carol over the phone.
Now their principal balance had grown by $23,0000 — to $287,000 — instead of $60,000 being "forgiven."
"So basically you lied to us," Carol remembered telling the rep. "And she said, 'Call it what you will. This is what our program is.'"
The Grundmanns repeatedly asked for an explanation about the extra $23,000 — "conservatively, 40 to 50 times," Tim testified. None was forthcoming, and they never were allowed to talk to a higher-up at Green Tree.
Still, they kept paying $1,421 each month, and Green Tree kept accepting the payments even after it filed a lis pendens, or notice of foreclosure, in May 2013.
The job of serving the notice fell to employees whom Tim supervised at the sheriff's office.
"Great, now everybody at work knows," he testified. "It was quite embarrassing because it made it around — people in my office and my chain of command knew. And my supervisors were coming to me, saying, 'Hey, is everything okay?'"
The Grundmanns hired Jon Coats Jr., a St. Petersburg lawyer who has represented numerous homeowners facing foreclosure. He filed a counterclaim against Green Tree, alleging negligence and breach of contract.
In May 2014, Green Tree began returning the Grundmanns' checks uncashed. The couple opened an escrow account and deposited $1,421 into that each month.
The trial began last year. It was suspended for what proved to be unsuccessful attempts at mediation but resumed again in April. By that time, the Grundmanns' escrow account contained $52,759 — money they had tried to pay on their mortgage but that Green Tree refused to accept.
On the final day of trial, Carol described her many frustrating exchanges with the company. Then Coats asked if there had been any negative effects from the foreclosure proceedings.
"It's been a lot of stress between my husband and I," she said. "I had health issues. I clench. I've had dental fractures because of the anxiety. I don't sleep. Just anxiety — horrible, horrible anxiety… This place has bee a home to us for a long time, but this last 5-1/2 years it's a house; it hasn't been a home."
Coats asked Tim Grundmann if he had encountered any credit problems while the dispute with Green Tree dragged on.
"My son got into an accident and totalled my truck," came the reply. "I went to go buy a new truck through my bank that I've been with for 30 years. And they said, 'Sorry, we can't.' And I asked them why, and they said, 'Well, every month there's something on your credit from Green Tree.'"
At the end of the trial, Green Tree dismissed the foreclosure case. Judge Schaefer praised the move but blasted the company for suggesting through its lawyers that the Grundmanns' should have gotten more in writing instead of relying on statements made over the phone.
"Cut it out," he said. "This was terrible. Terrible treatment of these folks and they're still going through it… You're lucky this wasn't a jury trial, I'm telling you. Mr. Coats could have stood up there and said, 'Give us $12 million' and they wouldn't even have gone to deliberate; they would have done it."
The judge ordered Green Tree to pay the Grundmanns $231,531.
The trial never produced a clear explanation of the large and varying fees Green Tree kept insisting that the Grundmanns owed. And because the company never accepted the modification agreement that would have reduced their principal balance to $204,000 — despite what the rep told Carol on the phone — the Grundmanns are still paying on their much larger original balance plus interest. They have agreed to apply any money they get from Green Tree toward their mortgage.
"The intent behind this judgment is not a windfall for them at all because of what they went through," Coats said on Thursday, "but it gets them the position to make it easier to pay off their loan for sure."
Green Tree, which has changed its name to Ditech Financial, did not return calls for comment.
Thursday morning, the company filed notice it will appeal the judgment.
"It's like a kick in the head," Tim said. "Definitely a gut punch."
It came just as they had begun to feel a vast sense of relief. Carol, 53, was recovering her health. Tim, 52, thought he might finally be able to enjoy his retirement from the sheriff's office.
They had plans for the house.
"There are lot of things we wanted to do but we didn't want to throw money at it because we didn't know what the situation was going to be," Tim said. "We just kind of put a Band-Aid on things over the last six years."
Now, while the Grundmanns are fairly confident they will prevail in the end, they know the appeal could take months or longer. They'll stick to necessary repairs and forget the upgrades they hoped to make.
They know it will be a while before the house again feels like a home.
Contact Susan Taylor Martin at firstname.lastname@example.org or (727) 893-8642. Follow @susanskate