A Yonkers couple whose house was targeted in a massive mortgage fraud scheme 18 years ago is suing to stop Pennymac Corp. from evicting them.
James and Donna Nolan accused Pennymac and several convicted scammers of violating the Truth in Lending Act and the Home Equity Theft Protection Act, in a complaint filed on Sept. 30 in Westchester Supreme Court.
Though Pennymac was not involved in the crime, it eventually acquired the house and was given approval by Yonkers City Court to evict the Nolans after Sept. 30.
“Accordingly,” the complaint states, the Nolans “have no other recourse and must commence this action in order to save their home and to hold the [criminal] defendants accountable for their fraud.”
A Pennymac spokesperson said the company does not comment on pending litigation.
The Nolans bought the 3-bedroom house on Stockbridge Road in northwest Yonkers for $105,000 in 1993. James Nolan, a carpenter, worked for two-and-a-half years on recovery efforts and on cleaning up toxic debris after the Sept. 11, 2001 terrorist attack on the World Trade Center.
He was left disabled with several diseases attributed to his work at Ground Zero.
He was just the kind of target — a financially distressed homeowner — that a mortgage fraud ring in Albany was looking for. Rivertown Investments, Momentum Properties, and several individuals defrauded homeowners and mortgage companies.
In 2007, the Nolans deeded their property to Momentum Properties for $520,000. In 2008, they agreed to a sale-leaseback-repurchase deal with Rivertown Investments.
Nolans claim they were tricked into granting a first mortgage to Washington Mutual Bank. The scammers borrowed $416,000, used the money for themselves, and defaulted on the mortgage.
Washington Mutual was awarded a $416,000 judgment against the Nolans in 2010. Pennymac eventually acquired Washington Mutual.
In 2011, the scammers were sentenced to prison for terms ranging from one year to 12 years and were ordered to pay up to $5.6 million in restitution to their victims.
The Nolans were to receive $93,602, but according to court documents they have been paid only $48.46.
The Nolans are asking the court to award them $534,050, establish who owns the property, and prevent imminent eviction from their home.
The eviction has been temporarily suspended, pending a hearing on Jan. 8.
