Family files lawsuit against bank, say Newaygo home was unfairly foreclosed

By John Agar | The Grand Rapids Press

April 27, 2010, 6:39AM

GRAND RAPIDS — Rick and Sherry Rought of Gowen paid cash for the old house, a $14,000 fixer-upper, for their daughter, Hannah, while she attended Ferris State University.

Seven months later, after the couple started repairs and moved in furniture, Deutsche Bank National Trust Co. foreclosed, hired a company to “trash out” the Roughts’ belongings, and changed locks and turned off utilities, according to a lawsuit filed Monday in U.S. District Court.

They believe that Deutsche, as trustee of Ameriquest Mortgage Securities Inc., didn’t realize the house, repossessed in 2006, was not subject to foreclosure.

It is a nightmare that has happened across the nation as the economy tanked, the couple’s attorney, Carlin Phillips, said at a press conference.

“It’s like the Wild West right now in the foreclosure industry,” he said.

Deutsche, however, said it played no role in the dispute, and that the alleged actions came under the purview of American Home Mortgage Serving, which took over service of the loan from Ameriquest.

Deutsche acts as a trustee and has an administrative role in such cases, but has “no beneficial ownership stake or interest in the underlying mortgage loans,” spokesman John Gallagher said.

The trust company holds legal title for the benefit of investors.

Gallagher said loan-servicing companies, not the trustee, “are responsible for foreclosure activity, maintenance of foreclosed properties and resale of foreclosed properties.”

A spokeswoman said they could not comment.

The Roughts said they contacted Deutsche and Field Asset Services, the Texas-based company whose agents allegedly entered the property, but got nowhere. In fact, after the August 2009 incident, when belongings were taken and locks changed, their house was entered twice more, with winterizing done that prevented use of utilities, including water.

The Roughts bought the house, at 406 Pierce Road in Newaygo County, about 25 miles west of Big Rapids, in February 2009.

They started to make repairs. In late August, their U.S. flag and bracket, riding lawn mower and firewood were gone. On the front door, a note from Field Asset Services said it maintained the lawn.

In October, a contractor, Out in the Woods LLC, which was not named as a defendant, got into the house to turn off utilities, the lawsuit said.

Out in the Woods left a note that said the property had been winterized, with anti-freeze placed in toilets, sinks and traps, and warned anyone who turned on the water that they could be held liable for damage.

The Roughts sent e-mails to Field Asset Services, ordering their representatives stay off their property. They also listed damages to property, along with missing items, including a dining-room table, four chairs, pots and pans, and cabinets that had been attached to walls.

“It is now December 1 and we have not heard a word,” Rick Rought wrote in an e-mail. “We had expected an answer by now and quite frankly am appalled at the total lack of respect and professionalism of your company. … We are trying to be patient and settle this peacefully. What would you do?”

A month later, he wrote, “Is there anyone in upper management I can talk to?”

In February, someone entered his home again and took a lock box from the front door.

The couple contacted state police after the initial break-in, but the complaint did not lead to charges, records said.

Sherry Rought said the couple contacted a local attorney, who wouldn’t handle the case. She went online, and found Phillips and Joseph deMello, both Massachusetts attorneys, had handled similar cases. The attorneys said the Roughts were victimized by greedy companies that didn’t bother to check whether their property was in foreclosure.

“It’s almost like they are vultures when they think a property is foreclosed upon,” deMello said. “They didn’t do due diligence.”

He said other banks have been involved in such cases.

“The problem is, they’re too big to care.”

The Roughts, who cashed out some retirement savings, said they were trying to turn the house into a home, but that dream is ruined. Early on, they figured the mix-up would be fixed. Now, they don’t want their daughter living there. They don’t dare make improvements, or bring belongings over.

Sherry Rought is certain her family has “lost credibility” in the neighborhood, and said some people don’t believe they paid for the house.

The lawsuit said: “The Defendants actions were taken with a gross disregard for the (Roughts’) rights and were so severe and outrageous so as to shock the conscience and cause the (Roughts) severe emotional distress, embarrassment and ridicule.”

E-mail John Agar: jagar@grpress.com