Out of townhouse, but not by choice

Immigrant loses his dream through foreclosure

June 07, 2007|By Larry Carson | Larry Carson,Sun reporter

Kwaku Atta Poku had seemed to find his own American dream.

After emigrating from Ghana in 1992, he built a taxi business from scratch. He bought a townhouse in the quintessentially American suburb of Columbia, dutifully making each monthly mortgage payment - and even paid a bit more in some months.

But he has lost the house to foreclosure and most of his business and is facing thousands of dollars of debt through no fault of his own. And his attorneys say other Maryland homeowners who refinanced in the frenzy of real estate activity during the first half of the decade could face similar legal nightmares.

No one - not even the mortgage company that took his house - blames Atta Poku for the foreclosure. His lawyers say his original mortgage was paid off when he refinanced the note, but he couldn't prove it because of mistakes by financial institutions, including their loss of key documents.

"I don't even know how I make it every day. I cry every day," the 55-year-old said, sitting at a tattered card table piled high with copies of legal and financial documents in a townhouse rented under a friend's name. His two remaining AAAA Star cabs sit idle outside. His cell phone, to which all his business calls are routed, is silent.

His mortgage firm took his house because Maryland law makes it easy and quick, his attorneys said.

"It's absolutely not his error," said Gerald M. Richman, an Ellicott City attorney who represents Atta Poku, so far without a fee. "He didn't do anything wrong. It's an outrage what happened to him, but it's a quirk of the system."

Shane Winn, a spokesman for Washington Mutual Inc., one of the nation's largest home lenders and the mortgage company that took Atta Poku's house, said that his firm "never received the proceeds from the closing agent to pay off the prior loan," and that Atta Poku couldn't prove in court that the payment was made.

Winn suggested that the title company might have been to blame but said it was Atta Poku's responsibility to investigate that. In Maryland, title companies handle the payoff of mortgages.

"The outcome in this case is most disturbing and regrettable," Winn said. "The foreclosure wasn't our fault, and the courts agree with us."

Atta Poku's lawyers believe that the mortgage company got its money, but the lost records prevent him from proving it, despite a photocopy of a settlement check produced by the title company's bank. There is no copy of the back of the check, however, and the original is missing.

Dwayne E. Pope, owner of Advance Settlement Agency Inc., the now-defunct title company that handled Atta Poku's refinancing, later pleaded guilty to fraud charges in a Pennsylvania federal court for embezzling more than $1.6 million in escrow settlement funds, according to court records. He's serving a 30-month sentence at the Federal Correctional Institution at Fairton, N.J., and is due for release in November. He's supposed to make restitution to Stewart Title Guarantee Co., the firm he wrote insurance for - but not to any homeowners.

Pope's conviction covered crimes in 2002 and 2003 - at least a year after Atta Poku's settlement - and there is no indication that he did anything illegal in Atta Poku's case. Pope has not been charged with any crime connected with Atta Poku's case.

The worst part, from Atta Poku's perspective, is that even though his lawyers say his troubles appear to be either a title company or mortgage company error, a series of Maryland courts - ending with a Court of Special Appeals ruling in May - have declared the foreclosure legal. Those rulings now can be used to combat any attempt by Atta Poku to sue to recover damages.

"All I want is people to know the truth about this case," Atta Poku said. "I lost my property. I lost my life."

He testified at a state Senate hearing this year on a bill to require at least 30 days' notice and posting of the property before any foreclosure sale. The legislation failed, but it is expected to be reintroduced next year.

Maryland law puts homeowners at a severe disadvantage in foreclosure cases, said Phillip Robinson, deputy executive director of Civil Justice, a public service law firm in Baltimore.

Unlike renters in disputes with landlords, homeowners are not guaranteed a court hearing in disputes with mortgage companies, he said. And the law doesn't require receipt of notice about a foreclosure - something required in even the smallest of small-claims lawsuits.

"If you want to sue me for not paying back $20 that you loaned me, the District Court judge handling that case could not rule in your favor unless you could prove I received notice of the lawsuit," Robinson said. "In a foreclosure, you could sue me and say notice was sent but not received and get my house. Maryland's foreclosure laws are just as antiquated as its ground-rent laws."

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