By Rob PerezSunday, July 7, 2002
unpaid for 14 years
Skip a month on your mortgage payment, and your lender will start sending letters warning of dire consequences if the account isn't made current.
Skip several months and your lender will go ballistic, initiating a foreclosure process that ultimately could result in the lending institution taking possession of and selling your home.
But skip 14 years' worth of payments?
Warren H. Mijo can lay claim to that unusual distinction.
Mijo has not made a mortgage payment for his Manulani Street home in Kailua since at least 1988 when his lender, Associates Financial Services Co., filed a foreclosure lawsuit against him and his parents for allegedly defaulting on their loan. Mijo eventually filed a countercomplaint, claiming the lender violated federal truth-in-lending laws.
The case slowly wound its way through the courts, and in 1998, 10 years after the original lawsuit was filed, the Hawaii Supreme Court reversed an Intermediate Court of Appeals ruling and upheld a 1993 judgment against the Mijos for $82,500 plus interest.
To this day, Mijo has not paid a dime of that judgment.
To this day, the 57-year-old former bus driver still holds title to the Kailua home, despite owing more than $133,000 to Associates as of 1998. The debt would be greater today because of interest accrued since 1998.
At a time when lenders typically are quick to crack down on delinquent borrowers, how can anyone still own a home after going 14 years without making a mortgage payment?
The answer isn't easy to come by, partly because Associates isn't around anymore -- it was acquired in 2000 by the huge financial conglomerate Citigroup Inc.
An attorney who represented Associates in the foreclosure case declined comment, and Citigroup and its consumer lending arm, CitiFinancial, didn't respond to requests for comment.
Documents in the foreclosure case reveal a partial explanation as to why Mijo was able to hold onto his home despite the judgment against him and his late parents.
By alleging violations of truth-in-lending laws, Mijo sought to cancel his mortgage on grounds that the lender used fraud and deception to make the loan -- charges denied by Associates.
It's not unusual for homeowners to stop making mortgage payments once truth-in-lending violations are alleged, though lenders typically deny the allegations and try to quickly get them dismissed so the foreclosure can proceed.
In the Mijo case, a settlement ostensibly was reached right before the trial was to start. But a dispute arose over the validity of the settlement and whether a judge's late-1993 order enforcing a judgment based on the settlement could be executed.
Mijo appealed the judge's order, which was put on hold pending the appeal.
That meant Associates couldn't collect on the judgment until the appeal process was completed, something that took more than four years.
But even after the Supreme Court upheld the judgment against the Mijos in February 1998, the lender appears to have done little to collect the debt.
A state judge granted Associates' 1998 motion to have an appraiser appointed to assess the value of the Mijos' Kailua home, a key step before the property could be sold to pay the debt.
The appraiser appointment, however, was one of the last court filings in the case, leaving unexplained why the lender hasn't pursued the judgment over the past four years.
Mijo declined to answer specific questions about the case but issued a two-page statement explaining some of his actions.
"When I was in foreclosure in 1998, the whole world seemed to crash down on me," he wrote. "Helpless and scared of losing my parent's home in Kailua, I quit my job as a bus driver and tried desperately to find a way out of the mess I was in."
He said he found the answer when browsing through a book about stopping foreclosures.
"It mentioned that there are disclosures that mortgage companies must make in compliance with federal law. I was simply blown away that the federal government had laws to protect homeowners from predatory lending practices of loan companies. I forced myself to learn about the required federal disclosures in order to save my home."
Mijo isn't out of the woods just yet, because Citigroup still can try to collect on the judgment, though the lender may be running out of time. Judgments in Hawaii expire after 10 years if an extension isn't granted, according to several attorneys.
Lawyers who handle foreclosures say the Mijo case is atypical, particularly the length of time the loan has gone unpaid.
If a homeowner stops making payments in a foreclosure case, the lender usually will ask the court to appoint a commissioner to sell the home, with the proceeds going toward paying the outstanding debt. If the homeowner is uncooperative and won't move from the home, an eviction is sought.
The entire process can last several years.
"It would be unusual that there would be no payments made on a mortgage for over 10 years and that the lender has not done anything to enforce its remedies," said attorney Marvin Dang, who represents lenders but was not involved in the Mijo case.
Attorney Gary Dubin, who represented the Mijos on their appeal, said lenders in most foreclosure cases prevail at the summary judgment stage -- even before going to trial -- often because homeowners lack proper legal advice.
If a case gets past summary judgment, that usually means there's a glitch in the lender's case, and the institution would be better served settling the lawsuit rather than waiting the typical year or more for the trial to start, Dubin said.
"It's the lenders' own fault if they let owners stay in the house without paying (the mortgage)," he said.
Dubin declined to discuss the Mijo case. But he lauded Mijo for bringing attention to truth-in-lending issues in Hawaii.
Since learning about truth-in-lending laws to fight his foreclosure case, Mijo has helped other homeowners facing similar predicaments.
That has got him into trouble in the past.
The U.S. Bankruptcy Court in Honolulu banned Mijo last year from assisting homeowners in filing bankruptcy petitions, a tactic often used to try to delay foreclosures. Mijo also was fined thousands of dollars.
For someone who has gone years without paying the mortgage, Mijo holds a job rich in irony.
He works for a local mortgage company.
Star-Bulletin columnist Rob Perez writes on issues
and events affecting Hawaii. Fax 529-4750, or write to
Honolulu Star-Bulletin, 500 Ala Moana Blvd., No. 7-210,
Honolulu 96813. He can also be reached
by e-mail at: email@example.com.