Foreclosure Nixed When Lender Fails to Notify Homeowners

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What happens when you're the last one to hear about your own foreclosure? If a mortgage lender can't find you at your last known address in order to personally serve you with a notice of default on your mortgage, it can put out an ad, called a "legal notice" in the local paper and notify you that way of its intent to foreclose. If you don't notice or respond to the ad, the lender can get a default foreclosure judgment against you and can take the house in a matter of days.

But as Scott P. Mattfeld of Waukesha County, Wis., can tell you, if the lender can't get the spelling of your last name correct and it publishes the legal notice in the wrong newspaper, you just may be able to cancel the foreclosure judgment and keep your house a bit longer, as that's just what the Wisconsin Appellate Court judge ruled for him last week.

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Mattfeld, and his wife at the time, Shelley Mattfeld, owned a 2,577-square-foot colonial home (pictured; see more photos in the gallery) in Menomonee Falls, Wis. that they missed a few payments on. In the process of a divorce, they eventually moved elsewhere in the same county -- to separate homes -- leaving vacant the 4 bedroom, 3 1/2 bedroom home that sits on four acres.

Scott Mattfeld contends that the post office notified its lender of the new addresses for both of them, yet the lender never attempted to mail them a notice of default or a copy of the
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summons and complaint to either of their new addresses, nor serve them there, but only tried their old address. The lender, PHH Mortgage of New Jersey, agrees, but says instead it filed a legal notice in a Wisconsin newspaper, according to court documents obtained by AOL Real Estate.

But regardless of where and how the lender tried to track them down, the proof of publication and affidavits of nonservice reflect that throughout the period of attempted service, the "Mattfelds" were incorrectly identified as the "Mattfields." The latter spelling is with an extra vowel. Although the actual mortgage agreement lists the correct spelling of the couple's surname, even PHH Mortgage's attorney used the wrong spelling in correspondence to the court when it stated that "[c]opies of the summons and complaint were never sent to the Mattfields at the Lannon Road address in Menomonee Falls on the date of publication ... because our process server had been unable to find either Scott or Shelley Mattfield during several visits to that address in August of 2008." The letter to the court listed PHH Mortgage's attempt to locate the "Mattfields," including Internet searches, directory assistance, divorce records and voting records.

When this reporter typed in the correct spelling, I immediately located Scott Mattfeld, the chef and owner since 2006 of the Quarry Coffee and Cafe, which says on the "About Us" page that he "is a home town boy. He was raised in Menomonee Falls and is a graduate of Menomonee Falls North High School." As the father of "three awesome children...in his spare time, which is limited, Scott likes to help with the Boy Scouts and Men's Fraternity at Spring Creek Church."

So there, PHH. When you misspell a name, what do you expect? A house?

According to an expired listing from Shorewest Realtors, the home had been on the market last summer for $425,000 before being reduced to $400,000. The 1978-built two-story has an updated master bath with a whirlpool tub, glass and tile shower, new carpet, new roof and a finished lower level.

In addition to the misspelling, the Mattfelds' attorney pointed out that PHH Mortgage had used The Daily Reporter, a Milwaukee County publisher of legal notices, and not a publication of general circulation in Waukesha County where the couple lived given the law requires that publication be made in "a newspaper likely to give notice in the area or to the person affected."

The newspaper publisher, named as a co-defendant, noted that although The Daily Reporter is a newspaper distributed throughout the state, it is "a qualified legal newspaper in Milwaukee County, but it is not a qualified legal newspaper in Waukesha County, where the property ... is located."

It seems that if PHH had wanted to reach the Mattfelds, not only should it have correctly spelled their name, but it should have published the notice of the sheriff's foreclosure sale in the Waukesha Freeman newspaper. (Both the Waukesha Freeman and the Daily Reporter are distributed throughout the Greater Milwaukee area, however.)

The Wisconsin Court of Appeals agreed with the Mattfelds last week and ruled in their favor to vacate the foreclosure judgment.

"I am glad it turned out in our favor," Scott told us during a brief phone interview while he was at the cafe. He didn't want to reveal what was next on the agenda with the property, as he said, "that's between me and my attorney."

But now that the lender knows where they live, perhaps it will try to attempt service again on the Mattfields, er, the Mattfelds.



Sheree R. Curry
, who has owned three homes, but never faced foreclosure, is a three-time award-winning journalist who has covered real estate for six years. During her 20-year career, her articles have appeared regularly in the
Wall Street Journal, TV Week, and Fortune. She's been writing for AOL Real Estate since 2009 from a Minneapolis-area rental. She seeks a book publisher -- or at least a lender who'll give a reasonable mortgage rate to a self-employed mom.


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