Collis McDuffie is the face of what some authorities fear is the next crisis in the foreclosure debacle. He's fighting two banks, both of whom claim they own the same mortgage on his Brownsville home.

McDuffie's attorney says neither of the foreclosure claims is valid because they are based on a forged warranty deed.

The cases pit an illiterate retiree and father of 10, a man who worked for decades as a cafeteria cook expecting to at least own his home, against two of the largest lenders in the country.

"These mortgages have been bought and sold so many times, and repackaged so many different ways no one knows who owns them anymore," said McDuffie's attorney, Jacqueline Ledon, with Legal Services of Greater Miami. "This is the problem with the mortgages right now. No one is getting their paperwork in order before they file for foreclosure. It gets messy."

"These mortgages have been bought and sold so many times, and repackaged so many different ways no one knows who owns them anymore," said McDuffie's attorney, Jacqueline Ledon, with Legal Services of Greater Miami. "This is the problem with the mortgages right now. No one is getting their paperwork in order before they file for foreclosure. It gets messy."

The Congressional Oversight Panel issued a report last week warning that a crisis of loan ownership may loom in the paperwork mess created during the housing boom, when mortgages were frequently transferred from bank to bank.

The panel examined the "robo-signing" problem, in which law firm employees have signed hundreds of thousands of affidavits, often without verifying the information in them. The panel noted that the financial services industry has claimed that the problem of robo-signers is simply an issue of employees who failed to follow procedures, "but the facts underlying the affidavits are demonstrably accurate."

The Congressional Oversight Panel wasn't so sure.

"It is possible, however, that 'robo-signing' may have concealed much deeper problems in the mortgage market that could potentially threaten financial stability and undermine the government's efforts to mitigate the foreclosure crisis," the panel wrote. "In essence, banks may be unable to prove that they own the mortgage loans they claim to own."

In McDuffie's case, two banks claim to own a loan on the three-bedroom, one-bath home he bought in 1963. McDuffie raised five boys and five girls in the modest, one-story home.

"It was get in wherever you fit in," recalled daughter Zella McDuffie-Smith, who has been helping her 85-year-old father sort out the legal problems swirling around his home since she discovered a foreclosure notice among a pile of unopened mail addressed to her nephew.

Collis McDuffie may not be able to read but he's positive he never signed a warranty deed transferring ownership of his home to his grandson in 2004. He took in his grandson, Decyo McDuffie, after he got out of jail that year, the family says.

A notary affirmed that she knew Collis McDuffie personally when she notarized the deed transfer. Back in 2004, she worked for Esquire Title, a Hollywood firm started by Levi England, an attorney who was disbarred for five years in 2002. He has since resigned from the Florida Bar. Neither the notary nor England could be reached for comment.

Collis McDuffie's grandson took out a mortgage on the home in 2007, but he failed to make the payments, according to Miami-Dade County public records.

The first lender is listed as American Brokers' Conduit, which transferred the mortgage to Bank of America. Bank of America sued to foreclose within a few months of the mortgage being recorded in Miami-Dade.

McDuffie and his daughter both say Decyo McDuffie forged Collis McDuffie's signature on the deed transferring the property to Decyo McDuffie.

Family members say they don't know the location of Decyo McDuffie and he could not be reached for comment.

The first foreclosure case, the one the daughter found, was filed by Bank of America, using the now-embattled law firm of David J. Stern. Stern's firm is one of four mortgage foreclosure firms under investigation by the Florida attorney general's office. Depositions of his employees, including one who signed documents in McDuffie's case, have led to claims that "robo-signers" were signing, notarizing and filing paperwork they didn't actually know was accurate. No one from Stern's firm returned a call seeking comment.

For two years, Ledon has been fighting Stern's firm to make right a warranty deed she says was forged. Then, in October of this year, a second bank, PennyMac, filed foreclosure paperwork against McDuffie, sending a process server to Collis McDuffie's home.

"He said that my house was Decyo's property," McDuffie said. "Then he said, 'from today, you've got 21 days to get out.'"

McDuffie called Ledon, convinced he had lost a court case he didn't completely understand.

"I was fixing to go if she hadn't told me not to move," he said.

Bank of America asked the Daily Business Review to provide information about the case but did not return a call seeking comment. A PennyMac representative also said he would look into the case but never got back to the Daily Business Review. The law firm that filed the PennyMac case did not return a phone call.

Foreclosure defense experts say the case is unusual, but not surprising. And it may just be the first of many to come.

"It's something we're always worried about," said Dustin Zacks, of the Ice Legal firm in Royal Palm Beach, one of the firms that has been challenging banks to prove ownership in foreclosure cases.

"You don't want to settle with the bank and then be at risk of being sued years down the road by a new company who says they own it. That's why it's so important when we settle with the banks that they give us some kind of proof of ownership."

He said, in many cases, the banks destroyed the original document, keeping only an electronic copy.

"If they've transferred it five times, there are five different companies out there that can just print it out and claim they own it," he said.

The Congressional Oversight Panel noted that improperly documented foreclosures could affect not just the original homeowner, but the person who buys the property at the end of the foreclosure case and may not have clear title, a problem with the potential to further undermine the housing market.

"If the current foreclosure irregularities prove to be widespread, they have the potential to undermine trust in the legitimacy of many foreclosures and hence in the legality of title on many foreclosed properties," the panel wrote.

Legal Services is fighting both foreclosure suits and has filed suits against Decyo McDuffie and the title agency that employed the notary who handled the deed transfer.

Legal Services has also set up a trust into which McDuffie is paying the original payments he had on a very small loan on his home before the warranty deed was transferred. And he's staying in his home while Ledon tries to sort out the two cases. The foreclosures have taken a toll on his health, his family says.

McDuffie, a quiet man, says the process has been painful.

"It's a hurting thing," he added. "You don't know what's going on."

Collis McDuffie, a retired cafeteria cook, is fighting two banks who want to foreclosure on a house he's owned since 1963 in Miami's Brownsville section.

Although he's one of many thousands of homeowners grappling with lenders' paperwork mess created during the housing boom, his case is even more complicated: McDuffie's family claims a grandson forged his signature to gain title to his house.

The grandson took out a mortgage on the home in 2007, but he failed to make the payments, according to public records.

Legal Services of Greater Miami is fighting both foreclosure suits and has filed a suit against the grandson and the title agency that employed the notary who handled the deed transfer.

Susannah Nesmith
Daily Business Review