Pinellas foreclosure sale falls through cracks in the system - WFLA News Channel 8

Pinellas foreclosure sale falls through cracks in the system

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The foreclosure auction of Andrew Rydholm's house took place despite Rydholm's loan modification deal with his lender The foreclosure auction of Andrew Rydholm's house took place despite Rydholm's loan modification deal with his lender

After three years of haggling and financial distress, disabled train engineer Andrew Rydholm finally had a deal worked out with his lender to save his home from foreclosure.

Rydholm's new agreement with Nationstar Mortgage was signed. He'd paid the modification fees and sent Nationstar Mortgage his first month's loan payment under the new terms.

"I thought it was all over with," Rydholm said.

But when would-be investors started scaling his fences and showing up with bolt cutters this week to inspect his property, Rydholm realized the scheduled foreclosure sale of his home was imminent.

"I was shocked," said Rydholm. "I don't think there are any words that can describe it."

He was facing a paperwork version of the train wreck that injured him years ago when he still worked for the railroad.

This time around Rydholm's life wasn't in danger, but his home sure was due to a series of missteps by people in the legal system who are trying to shovel their way out of Pinellas County's 16,000 case backlog of foreclosures.

"Somebody made a mistake, but nobody wants to admit to it," Rydholm said.

It turns out that a week after Eight On Your Side helped clear up an internal communication breakdown by Nationstar that would have kept the scheduled foreclosure sale in track, other mistakes made that sale happen this week anyway.

The attorney for Nationstar Mortgage, David Schneid, said it wasn't his firm's fault that Rydholm's home went to auction Tuesday. "I don't see this as anyone dropping the ball," said Schneid.

But a closer examination by Eight On Your side reveals that someone inside the court system failed to take steps to stop the auction and Nationstar did play a role in allowing it to happen.

"There was a mistake made," said Pinellas court system spokesman Ron Stuart. "I can't tell you where it was made."

As it turned out, Rydholm's foreclosure case files had fluttered into a perfect storm of red tape tribulation.

First of all, the timing was terrible.

Rydholm's deal with Nationstar to modify the loan happened only after a judge approved the foreclosure sale, set a date for that sale and entered a final judgment on behalf of Nationstar.

Secondly, the Pinellas judge assigned to the case--Jack Day--happened to be vacationing out of the country when Nationstar's last minute motion to cancel the sale arrived on his desk July 29th. That was six business days before the August 6th foreclosure sale when Day was still away on vacation.

Stuart said Nationstar's motion to cancel the sale was apparently buried somewhere in what he describes as a "bushel basket" of daily foreclosure filings.

You're moving through a big system with a gigantic amount of volume," Stuart said. "That's cutting it pretty tight."

When timing is that tight, Stuart says someone usually alerts the Pinellas Clerk's Office that an order to cancel the sale is forth coming from the judge.

It's not clear whether anyone made that call in this case but the Clerk's Office insists it had no warning until an hour or so before the sale, when Eight On Your Side started calling about the case.

By then, it was too late.

To make matters worse, Nationstar's lawyers paid the fee for Rydholm's property sale the day before the sale through an automatic debit account set up with the Pinellas Clerk.

That payment essentially gave the Clerk's Office a final green light even as the firm was trying to stop the sale through a series of phone calls and urgent messages on the morning of the sale from its offices in Boca Raton.

Nationstar ended up buying back Rydholm's property during the auction for $75,900 as a "protective" action to keep other investors from gaining control of the property and filing motions that essentially nullified the sale.

In other words, Rydholm had his house back before the Clerk could assign new ownership of the property back to Nationstar, but not before moving to the brink of homelessness.

"I hope and pray this is over with," said Rydholm. "I want my life back. I want my home back and it's embarrassing for me."

He's not the only one who's embarrassed.

Nationstar's lawyers say they're making internal changes to keep this sort of thing from happening again.

"We apologize for anything he had to go through and we're certainly happy that the result was a happy one." said Schneid.

It's a happy result for Nationstar because Rydholm's loan debt amounts to more than $166,000, which is more than twice the $74,000 current assessed value of the house.

Nationstar would have stood to lose nearly $100,000 by taking back the property.

HERE'S WHAT YOU NEED TO KNOW

In light of Rydholm's case, Stuart said the Pinellas court system is also making some changes to minimize future mishaps in the handling of foreclosure cases.

"We're going to be more vigilant," said Stuart. "We're going to tighten up our procedures and monitor these things more closely and hopefully it won't happen again."

Stuart said the lesson for others facing foreclosure is three-fold.

First of all, financially distressed homeowners should try to seek relief through the court's mediation system that is set up to sidestep the foreclosure process altogether.

Secondly, Stuart says homeowners facing foreclosure should seek legal advice to protect their interests in a foreclosure action.

And finally, Stuart says no one should expect last minute miracles in a court system that's buried in foreclosure actions. That kind of brinkmanship almost cost Rydholm his home.

Once a foreclosure case has reached the point of a final judgment and a scheduled auction, it's like a runaway train.

Former railroad engineer Andrew Rydholm, who says he has suffered tremendous stress through his own foreclosure experience, can testify to that.

"It's a travesty for everybody out there that's in this situation," Rydholm said.

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