Charlotte.com: Business
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• Battle is lost, but the war goes on
  Faced with the threat of foreclosure, many homeowners give up and abandon their homes.Then there's Richard Davet.He and his wife, Lynn, lived in a six-bedroom home in this Cleveland suburb for nearly 20 years when, in 1996, he was served with a foreclosure lawsuit. Rather than turn over the keys, he hit the law books. Flooding the courts with papers, Davet staved off foreclosure for 11 years, until this past January, when a county sheriff's deputy evicted the couple and changed the locks. They didn't make a mortgage payment the entire time."Our four Scottish terriers are buried there," says the 63-year-old Davet. "It was heaven on earth, an unbelievable property, and they took it from us like candy from a baby."Davet's case is believed to be the longest residential foreclosure of its kind in the history of Cuyahoga County, which is at the epicenter of the foreclosure crisis currently enveloping Ohio and many other parts of the country. Foreclosure actions are generally routine, typically taking from a few months to a couple of years to get the borrower out of the home.These days, more homeowners are digging in their heels. They delay foreclosures by filing for bankruptcy on the eve of a court-ordered sale of the property, or by refusing to answer the door when the plaintiff tries to "serve" them with a foreclosure lawsuit. They pay lawyers a few hundred dollars to file a motion that can buy them a little more time.But few are as dogged as Davet. And his fight may not be over yet. Though ousted from his home for nearly a year now, he is trying to get the charming 1940s house back, plus damages. He's relying on the legal argument -- currently making headlines -- that a financial institution can file a foreclosure action only if it can prove it actually owns and holds the mortgage and promissory note."I give him credit. He truly believes a banking institution did him a great wrong," says Daniel Kalk, one of several lawyers who at various times represented Davet in the case. "The funny thing is, some of the things he argued 10 years ago -- all of a sudden you see a federal court saying the same thing."A former jewelry-business owner, Davet and his wife, a former graphic-arts tutor, bought their home in 1978 for $150,000. As its value increased, they borrowed against it. They made their mortgage payments, but on one loan, they allegedly made payments late -- 90 times, according to NationsBanc Mortgage Corp., which assessed the couple some $4,000 in late fees. NationsBanc Mortgage was part of the old Charlotte-based NationsBank, now operating as Bank of America.After the Davets for two years refused demands to pay the late fees, during which NationsBanc began refusing to accept their regular mortgage payments, the company sued for foreclosure. At the time the couple still owed $80,000 in principal, plus an additional $160,000 on a second mortgage on the home. Davet insists the late fees were erroneous -- he points to a deposition in which a NationsBanc employee conceded that the company couldn't back up its claims for a chunk of the fees. So he began his full-time crusade in the courts to keep his home.He started with the help of lawyers, but those arrangements didn't last. Dan Dreyfuss, who represented the couple when the case was filed, called Davet's strategy "a recipe for how to confound the courts." He quit after Davet filed a motion to disqualify a judge against his advice. Kalk eventually sued Davet, successfully, for unpaid legal fees.On his own, as a "pro se" litigant, Davet was undeterred. Four times a week he went to Case Western Reserve University School of Law to study legal writing and case law in its library. His briefs were angry and colorful, including football analogies and an aside on Enron Corp.Among his maneuvers: asking a judge to arrest NationsBanc's CEO for initiating a "sham" proceeding against him because the company claimed in error that it owned his loan. (The judge dismissed the request.)"Davet has litigated these same issues over and over again ... and in each instance the courts have dismissed his claims," said Bank of America Corp., which merged with the owner of NationsBanc.Several years into the case, Bank of America took the unusual step of bringing in lawyers from a big corporate law firm, Jones Day. Five years later, in 2005, a judge granted foreclosure in the amount Davet owed and set a sale date for the property so that the creditors could take the sale proceeds. But when the property finally went to sale, Davet set up a shell company to win the auction, for $436,000. He couldn't pay more than the required $10,000 deposit, but the move delayed his eviction by months.Davet says it wasn't a delay tactic and that he was trying to line up investors to buy the property. The house was later sold to another family for $410,000.The eviction finally happened on a snowy day in January of this year.Davet continued to try, unsuccessfully, to get the federal court to agree that the state judgment was invalid. Then, a possible lifeline arrived this past October, when a federal judge in Cleveland, Christopher Boyko, dismissed 14 foreclosure suits because the plaintiffs that brought them couldn't prove they owned the mortgages when the suits were filed.Such a problem can occur when mortgages are turned into securities and sold to investors. The companies involved in the transaction may not have checked that each mortgage was legally transferred, or "assigned," to the new owners. In essence, the originating lender continued to legally own the mortgage -- and would thus need to be the plaintiff in a foreclosure suit. In Davet's case, however, the mortgage, which was not securitized, changed hands multiple times and wasn't actually owned by NationsBanc until three years after the company filed suit.Earlier this month, Davet filed a second federal appeal, this time citing the Boyko ruling, which he believes he inspired. It's unclear whether the latest salvo will work. If it doesn't, Davet says, he will set his sights on the U.S. Supreme Court.
• State calls registry invoice a scam
  A Florida company that sent mailings to North Carolina businesses claiming to be affiliated with a government agency and threatening to dissolve their corporation if payment wasn't received within 14 days has been ordered to stop, Attorney General Roy Cooper and Secretary of State Elaine Marshall announced Friday."Companies that use threatening and misleading tactics to prey on unsuspecting businesses have no place in our state," Cooper said in a news release from the N.C. Department of Justice. "We've put a stop to their bogus claims so that no other businesses will fall into their trap."On Thursday, Wake County Superior Court Judge Howard Manning Jr. granted the request for a temporary restraining order to stop National Business Registration, National Companies Registrar Corp. and owner Bernd Taubert from misleading businesses with phony invoices, the release said.The defendants are temporarily barred from calling or sending invoices or collection letters to any N.C. business. Cooper is also seeking to permanently stop the defendants' deceptive practices, and is asking the court to order them to pay civil penalties to the state.In a complaint filed this week by Cooper and Marshall, they contend that National Business Registrar sent invoices to businesses claiming that they failed to register with the National Corporation Registry.The mailings claim that registering is mandated by the federal Patriot Act.The mailings further state that the company must pay $487 and provide information to avoid dissolution of their corporation. According to Marshall's affidavit, there is no national business registry."This is a scam against North Carolina's business people, plain and simple," Marshall said in Friday's release.The complaint also alleges that National Business Registrar's mailings include an official-looking emblem or seal that could be mistaken for the official seal of North Carolina. Businesses are directed to a Web site that also contains a link to the official Web site of the N.C. Department of the Secretary of State.According to the complaint, mailings appear to have been deliberately timed to arrive just as businesses are finalizing their financial affairs for the year in hopes that busy office personnel might pay the demanded sum without checking into the claims.Businesses that have sent money already should try to cancel the payment and contact the Attorney General's office at (919) 716-6400 or www.ncdoj.com.
• Home sales hit a new low yet again
  The housing market plunged deeper into despair last month, with sales of new homes plummeting to their lowest level in more than 12 years.The slump worsened even more than most analysts expected, heightening fears that the country might be thrust into a recession.New-home sales tumbled 9 percent in November from October to a seasonally adjusted annual sales pace of 647,000, the Commerce Department reported Friday. That was the worst sales pace since April 1995."It was ugly," declared Richard Yamarone, economist at Argus Research. "It is the one sector of the economy that doesn't show any signs of life. It doesn't look like there is any resuscitation in store for housing over the next year," he said.The housing picture turned out to be