Politico reports:

Two years ago, OneWest filed foreclosure papers on the Lakeland, Florida, home of Ossie Lofton, who had taken a reverse mortgage, a loan that supplies cash to elderly homeowners and doesn’t require monthly payments.

After confusion over insurance coverage, a OneWest subsidiary sent Lofton a bill for $423.30. She sent a check for $423. The bank sent another bill, for 30 cents. Lofton, 90, sent a check for 3 cents. In November 2014, the bank foreclosed.

In October, lawyers at the nonprofit Florida Rural Legal Services contested OneWest’s foreclosure and asked the Polk County Circuit Court for a jury trial.

This account has been widely repeated by other news outlets. Senator Jeff Merkley, repeating the anecdote on the Senate floor, says the woman lost her home:

What did OneWest do under Steve Mnuchin’s leadership? They foreclosed on Ossie for 27 cents.

... for that 27 cents, she lost her home.

as does Huffington Post:

Lofton paid a bill to a OneWest subsidiary that was short 30 cents in late 2014, according to Politico. When she was billed for the change, she mistakenly sent a check for 3 cents rather than 30. By November, the bank had taken her home.

However, this tweetstorm alleges that Politico's account of the incident is wrong or misleading. Among other things, he says that the bank filed a foreclosure action, but it was dismissed by the bank when the error came to light, they did not foreclose and the woman did not lose her house; and that the foreclosure action was not brought by OneWest in 2014, but in 2016 by CIT Group (which acquired OneWest before this suit took place in 2016; Mnuchin was the head of OneWest, but was only on the board of CIT Group).

I can't seem to find the court filings he refers to in the tweetstorm.

Is Politico's account of the incident correct? Is Senator Merkley's? If there are errors, what are they? What parts of the story are accurate?

  • 2
    There is another angle to this that I just realized. The loan only allows foreclosure on the grounds of no longer living at the home or not having insurance if the US Secretary of Housing and Urban Development approves. It seems that the Secretary of Housing and Urban Development approved of foreclosure on the home twice! I will add to answer eventually.
    – DavePhD
    Commented Jan 25, 2017 at 1:13

1 Answer 1


This is an ongoing case: CIT BANK, N.A. vs. LOFTON, OSSIE D. (case number 2016CA001327000000), filed 20 April 2016 in Polk County, Florida.

A previous case was ONEWEST BANK NA vs. LOFTON, OSSIE D. (case number 2014CA004708000000), filed 25 November 2014 and was voluntarily dismissed.

All the official documents of both these cases may be viewed as follows:

  1. Go to https://pro.polkcountyclerk.net/PRO/PublicSearch/PublicSearch

  2. Check the "Circuit Civil" box

  3. Enter the first (Ossie) and last (Lofton) names in the appropriate boxes, or one of the case numbers given above in the case number box.

  4. Click on "Find Case".

In any case, it is not true that "she lost her home". The bank voluntarily dismissed their allegations in the second case as of 10 October 2016 and the case continues due to counterclaims by the defendant.

Also, the bill for $0.30 was in August of 2015. Politico and Huffington are wrong about the timeline of events.

The correct timeline is:

  • August 1974: Ossie Lofton buys the property
  • 1976: Lofton has home built on the property
  • 24 April 2003: Lofton obtains a reverse mortgage on the home. The loan is a 3-party loan, the 3 parties being Lofton, Financial Freedom (then a subsidiary of Lehman Bros.) and the US Secretary of Housing and Urban Development. The terms of the mortgage specify that if the home is no longer the primary residence of the borrower, foreclosure can occur, but only with approval of the US Secretary of Housing and Urban Development. Similarly, foreclosure for not insuring the home can only occur with the approval of the Secretary.
  • 18 October 2011: Following an "alleged" gap in property insurance, the bank "force placed insurance" on the property using what they considered to be a "line of credit loan advance" in the amount of $1,883.30.
  • 9 November 2011: $1,460 of this $1,883.30 was paid, leaving a $423.30 balance on the "loan advance" associated with the insurance payment. Lofton was allegedly unaware of this balance, because of the way it was classified on the mortgage statement.
  • 29 May 2014: The US Secretary of Housing and Urban Development, Shaun Donovan, through his agency's contractor DEVAL, approves of foreclosure of the home. (see page 22 of sequence #4 in the 2014 case).
  • 24 November 2014: OneWest files for foreclosure of the home on the grounds that the borrower allegedly no longer lived at the home.
  • 23 December 2014: OneWest voluntarily withdraws the foreclosure filing.
  • March 2015: Ossie Lofton receives a letter from Financial Freedom (a loan servicing subsidiary of OneWest) informing her that she owed $423.30.
  • 11 March 2015: Ossie Lofton paid $423.00 to Financial Freedom
  • 03 August 2015: CIT Group acquires Onewest including Financial Freedom.
  • 13 August 2015: Ossie Lofton got a letter from Financial Freedom asking for payment of "$.3" by 8 September 2015, and stating that she would be subjected to foreclosure if she did not make the payment by that date.
  • 17 August 2015: Ossie Lofton sent a check to Financial Freedom which said "$.3" and said "three cents".
  • 23 October 2015: The US Secretary of Housing and Urban Development, Julian Castro , through his agency's contractor NOVAD, approves of foreclosure of the home. (see page 21 of sequence #3 in the 2016 case).
  • 20 April 2016: CIT Bank files a foreclosure action demanding the full amount of the mortgage, alleging that Lofton "failed to perform an obligation under the Home Equity Conversion Mortgage by failing to maintain property insurance".
  • 10 October 2016: CIT Bank voluntarily dismissed the foreclosure action.

  • 31 October 2016: Lofton filed 6 counterclaims against CIT Bank: 2 counts of violation of the Florida Consumer Collections Act, age discrimination in violation of the Equal Credit Opportunity Act, failure to provide adverse action notice in violation of the Equal Credit Opportunity Act, malicious prosecution, and slander of title.

  • 9
    So according to this timeline it wasn't about the $0.27/$0.30 - it was about property insurance ... which would mean the claim was false for that reason too (I mean, in addition to being wrong because she didn't actually lose the home) ...
    – davidbak
    Commented Jan 24, 2017 at 4:53
  • 9
    @davidbak Because this is a reverse mortgage, the bank is supposed to pay her money and she is required to live in the house and have property insurance for the house. At some point she (allegedly) didn't have property insurance, so OneWest got it for her, but considered it a loan. She paid all but $0.30 of the loan and then got a bill for "$.3" and she wrote a check that said "$.3" in the numerical part and "three cents" in the text part. Then CIT filed to foreclose based upon failure to maintain property insurance. But CIT withdrew the filing voluntarily.
    – DavePhD
    Commented Jan 24, 2017 at 13:09
  • 2
    @BenAaronson the deadline was "8 September 2015," and the suit was filed "20 April 2016," over 7 months after the deadline.
    – Kevin
    Commented Jan 24, 2017 at 19:21
  • 5
    I think it's a little weird to name the HUD Secretary approving the request in either case... it's not like his name appears in the paperwork. I would say it as e.g. "DEVAL approves of foreclosure of the home as a contractor working on behalf of the Secretary of HUD (see page 22 of sequence #4 in the 2014 case)."
    – ff524
    Commented Jan 25, 2017 at 2:34
  • 6
    @jwenting no, the first foreclosure attempt was totally unrelated to insurance. OneWest repeatedly, unsuccessfully, tried to verify that she lived at the house by phone, mail, certified mail and physical inspection. Then they faxed this info to the Secretary of Housing and Urban Development and the next day got approval to foreclosure. Then after waiting 180 day, they filed for foreclosure. Then they withdrew the foreclosure because they were convinced she really did live there.
    – DavePhD
    Commented Jan 25, 2017 at 11:53

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