Litton purchased our loan from another in 2002. Some months later in early my then wife to be, as a result of losing her job, fell behnd in her payments.
Later in 2003 Litton commenced foreclosure proceedings. The amount they claimed was owed was incorrect, so I opposed the foreclosure proceedings, and filed a cross action against Litton (I am a paralegal).
This served to tie the foreclosure up for the next 2 years with legal wrangling. Mostly because Litton refused to comply with our discovery requests, even when we would go back to the judge and get court orders, they refused to comply with the discovery requests.
This was apparently their attempt to punish us for opposing their will. This would create an equity vacumm. We were still in the home, and their consistent refual to comply with court orders, and our refusal to capitulate caused the amount of money to owed to keep rising.
During this time the housing market was doing really well, and our property was a high-end property and we therefore found a buyer, to pay us enough to pay Litton off and still walk away with a substantial amount.
They stalled in providing the payoff, and when they did give it, via their attorneys, it was $50,000 more than the amount we owed.
Of course we filed a motion in state court opposing this, and we filed a FDCPA action in Federal Court against their debt collector law firm, Butler& Hosch (who incidently are being sued in a class action in Florida for violating the FDCPA in their debt collection practices against homeowners).
Ultimetly, the state court agreed with us on the amount owed. We argued that Litton had purposefully stalled the proceedings, and caused additional motions to be filed by us, thus leading to additional court apperancees by thir attorneys and hence costing us more and more money.
The court, much to the displeasure of both Litton and Butler & Hosch, cut the amount they were asking for by some $45,000.00.
We paid the judgment of more than 450,000 in full as determined by the court. Butler & Hosch also decided to pay settle with us in the FDCPA suit paying us almost $8000.00. And given their flagrant violation of our debtor rights, we let them off the hook easy!
Finally for the bombshell. Just last week we received a 2006 tax notification from Litton, which reflects that they have either reported to IRS or are going to report to IRS that they cancelled some $45,000.00 in debt owed to them by us!!!
This is the same $45,000 dollars that the court ruled was not legally owed to them, so how did they cancel it?
Seems illegal to me. Also seems to me that they are trying to get us to pay their taxes. Maybe we should sue them for the overpayment of $45,000 dollars since they are making the representation (in an official filing) that they did not receive this money so they had to cancel the debt, and are therefore due a $45,000 tax write-off at our expense.
Surely they should have known after some two years of battle they could not pull this off.
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