A Bakersfield homeowner is taking on a bank, in a battle that could have sweeping implications for people facing foreclosure.
Mark Demucha wants Wells Fargo to prove it owns his home loan. And, if his lawsuit is successful, it could set a legal precedent that slows or even stops foreclosures across the state.
"Filled out the same paperwork over and over again."
Mark Demucha says all he wanted was to keep his house. "Sent it to them over and over again. I couldn't give you the exact time frame, but it's ridiculous," he said.
But, after a year of trying to get a loan modification from Wells Fargo... "I had to do something to protect my family. to protect my home."
He felt all washed up. "Not yes, not no, not anything. They didn't respond."
Demucha turned to family friend Michael Finley who happens to be a lawyer.
"A company that does not have a legal right to collect mortgage payments should not have the right to foreclose," said Finley.
Now, in a case that could have far-reaching implications, Demucha and Finley say they have one simple request. "If they are going to take my house, I should be able to see they have a legal right to take it from me," said Demucha. "They come to me and want me to have every single piece of paper I was ever supposed to have. But, when I say 'hey where is my promissory note?' they look at me like I'm a thief."
That's because Wells Fargo didn't loan Demucha the money to buy his house. Another company called CTX Mortgage, did.
Banks, at the time, seemed like they were almost using the housing market as a roulette wheel or a craps table. They were shoving debt around like it was a card game.
Like so many millions of homeowners, Demucha's loan was sold to another lender, a common practice because it's profitable to the banks.
In the old days, any time ownership of a property and its loan changed hands, it would be recorded at the Hall of Records at a cost of $18. For the mortgage industry, that took too long and on a large scale cost too much money. So they privatized it by creating the mortgage electronic registration system, a company headquartered in Reston, Virginia.
The sole purpose of MERS was to cut out the county clerk, allowing one mortgage company to quickly and electronically transfer a loan to another mortgage company.
On Tuesday, a spokeswoman told 17 News, MERS holds title to about 60% of the country's home mortgages or about 32 million loans. MERS is basically an electronic handshake between banks, saying we have a deal.
But, MERS has turned into a headache for some lenders as homeowners across the country have successfully challenged the company's legal standing in court. Others like Demucha are demanding their lender produce loan documents which may have been lost or even destroyed in the MERS shuffle.
"Why should the bank not still be required to possess a single piece of paper that they are the right place to home the consumer should make the payments?"
Earlier this month, a state appellate court agreed, overturning a Kern County judge's ruling that Wells Fargo could foreclose on the home.
The case is headed back to our county where the same judge will have to decide if Wells Fargo can prove it legitimately holds title to the Demucha's home.
"I wish I were David and they were Goliath. This would have been an easier fight. They are like an army of Goliaths and I'm like David with his hands tied behind his back," said Demucha.
Wells Fargo spokesman Tom Goyda couldn't comment on the specifics of this case but acknowledged the appellate court had sent the case back to the Kern County trial court to rule on several issues. Goyda noted the appeals court did not actually rule on the case and that Wells Fargo would continue to try the case in court.
A spokeswoman for MERS said her company said she couldn't comment because they are not part of this lawsuit. Demucha and his attorney are basically asking for Wells Fargo to go away and to restore the couple's credit.
"Wells Fargo essentially ignored them until the fifth district appellate court said Wells Fargo you can't ignore Mark and Sherry Demucha any more," said Finley.
The appellate court ruling has arrived back here in Kern County but a hearing has not yet been scheduled.