Collette’s home was sold on the Deschutes County courthouse steps in August.
The sale made national news because it took place hours before Collette’s son, a soldier in the U.S. Army, returned home on military leave. The Huffington Post, ABC News and the Los Angeles Times covered the story.
On Thursday, the two-attorney Lake Oswego-based law firm Bowles Fernandez Law LLC sued Chase, Washington Mutual and trustee Kelly D. Sutherland of Shapiro & Sutherland for wrongful foreclosure.
The complaint alleges that there is “no evidence that Chase actually is the owner of the debt” and therefore it was not entitled to foreclose on the home.
Chase said it granted Collette’s request to stay in his home through his son’s military leave. It also sent his loan modification documents to Fannie Mae, which owned the loan and denied his request for a loan modification.
Collette’s case isn’t unique. Oregon judges are listening to dozens of cases that hinge on whether banks had clear title to homes when initiating foreclosure proceedings.
Collette, a contractor, purchased his former Bend home in June 2006 for roughly $ 360,000, including a $ 127,000 down payment. He fell behind on payments when the economy crashed and the central Oregon construction market dried up.
New York-based Chase recently opened a homeownership center in Portland to help struggling homeowners.
Since 2009, the bank said it has avoided more than 6,400 Oregon foreclosures by working with homeowners.
Matthew Kish covers banking, finance and higher education.