Can You Lose A House You Paid For?

You may have heard a lot of media noise about the potential bursting of the housing bubble. Well, a correction in the real estate market is the least of Kwaku Atta Poku’s worries.

Mr. Poku—a hard-working immigrant from Ghana and owner of a small taxi business—carefully paid and kept a record of every mortgage check. In fact, some months Mr. Poku paid more than was required on his mortgage. So you can imagine Mr. Poku’s surprise when he learned that his house not only had been put up for sale, but that it had been bought ten days later by a real estate investor.

The most tragic part of the story is that it looks like Mr. Poku never did anything wrong. He lost his house because his mortgage company couldn’t find key documents that would prove his initial loan had been paid, a bank didn’t have its paperwork in order, and the title company that handled Mr. Poku’s refinancing is now out of business. Even though Mr. Poku kept photocopies of all his mortgage checks, he couldn’t prove that the original check issued to pay off his first mortgage was accepted because he only had a photocopy of the front part of the $96,599.74 check.

So What Happened to Mr. Poku?

Tragically, there was nothing that Mr. Poku could do. The foreclosure went through, Mr. Poku lost his initial appeal, and he couldn’t file an appeal in Maryland’s highest court because he couldn’t afford a mandatory bond to insure against losing the case. Not only does Mr. Poku “owe” over $90,000 on his first mortgage, but he and his family racked up $20,000 in “rental” bills (for “renting” their own house!) before they were evicted!

The crazy thing is that while Maryland law requires a foreclosure notice to be sent to a homeowner, it does not require proof that the notice was received by the homeowner. Mr. Poku recently testified at a Maryland State Senate hearing on a bill that would require at least thirty days for notice and posting of the property before a foreclosure sale.

The bill failed.