St. Pete hurricane victims fighting foreclosure after mortgage sold to new company

ST. PETE, Fla. - Hurricane victims trying to rebuild their homes are now fighting a new mortgage company that is threatening to take their homes away.

One St. Pete family said that while they were trying to rebuild their home after Hurricane Helene, their mortgage was sold and its new owner threatened to foreclose on them.

What they're saying:

"It's troubling mentally, it's stressing emotionally, it's deflating. As a husband and a father, it's mortifying because I have a family that depends on me," said Woody Faircloth.

Woody Faircloth is fighting to keep his family’s home in Riviera Bay.

"They told us, ‘Don’t make your mortgage payments for the next four months. Work on your house. Then, when your insurance check comes in, pull the money out of there and catch your payments up,’" said Faircloth.

When the forbearance period ended, however, Mr. Cooper, a mortgage servicing company, bought Faircloth’s mortgage.

When he attempted to resume payments, he was shocked to learn that the company had already placed his home in foreclosure proceedings because he was four months behind on his mortgage.

"I told them, ‘We were in a forbearance.’ They told me, ‘not with us, you weren’t," said Faircloth. "What they're doing is threatening us with a sale date on our house if we don't pay them," Faircloth said.

Local perspective:

Charles Gallagher, a St. Petersburg attorney specializing in real estate said situations like Faircloth's are becoming increasingly common, especially when the original forbearance agreement was verbal rather than written.

"We’re seeing a lot of that – just like we saw post-COVID," Gallagher said. "If you have a written forbearance agreement, the new mortgage company is obligated to honor it. If they don’t, they’re in violation of the amended mortgage terms."

Nationstar Mortgage, the LLC behind Mr. Cooper, has faced multiple lawsuits for failing to honor the terms of mortgages transferred from other companies. 

All 50 state attorneys general have sued the company twice, resulting in settlements for homeowners. 

The Consumer Financial Protection Bureau secured a $91 million settlement after alleging the company failed to handle transferred mortgages properly.

What you can do:

Gallagher advises homeowners not to pay companies in a panic if they receive verbal threats of foreclosure. Companies must first file a suit in court, giving homeowners the chance to respond and then attend court proceedings.

"We’ve seen cases where lenders falsely claim a sale date has been set, just to pressure homeowners into paying quickly," said Gallagher. "That can be actionable as fraud."

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"To say that you have a sale date set and a mortgage foreclosure case, when there's no foreclosure case filed yet, that triggers the issues of collection violations and deceptive trade practices," said Gallagher. "It's been done before many, many, many times by lenders and servicers who have tried to scare a borrower into quick repayment."

What's next:

Faircloth has filed a police report with the St. Petersburg Police Department, which confirms a detective is reviewing the case. He has also submitted a complaint to the Florida Attorney General’s Office.

"Dealing with the disaster was bad enough," Faircloth said. "I didn’t think I’d be dealing with a disaster and have the mortgage company trying to rip our house away."

The other side:

FOX 13 has reached out to Mr. Cooper multiple times for comment, and has not heard back.

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