“I feel like Nationstar did the right thing,” said attorney Michael Fuller, who represented Michael and Judith McEldery. “It’s the first public apology I’ve ever seen as part of the resolution in a case like this.”

As The Skanner News reported in August, the McElderys were sued by Nationstar for allegedly defaulting on a mortgage loan the couple took out to pay for repairs on Judith’s mother’s home; the couple originally took out the loan from a company called World Mortgage, but the debt was resold several times until it came to rest with Nationstar.

The situation unfolded, Judith McEldery said, as the cost of the loan kept rising and the McElderys struggled to get Nationstar to the table to modify it, which a company representative had promised they would do.

Legal documents show the case hinged on two “misrepresentations” Nationstar made to the McElderys: Firstly, the company assigned the McElderys a specific contact person who would negotiate with them for a loan modification – but that person was never available and their voicemail was always full.

Secondly, Nationstar told the McElderys that if they complied with the loan modification process they would, in fact, get one; however, their attorney argued that the couple complied with every request Nationstar made, but did not receive the promised loan modification.

Fuller announced the settlement Friday. Financial details were kept under wraps but the lawsuit had demanded “actual damages, treble damages, punitive damages, declaratory relief, injunctive relief, attorney fees and costs brought by Mr. McEldery against Nationstar.”

The McEldery’s case was remarkable for the series of events that led to the couple almost losing their home. But on the other hand, their basic struggle just to get an agent on the phone to modify their loan is all too common.

The trouble started – as often happens – with a building that was fully paid off but which needed repairs.

The McEldery home, where Judith and her family grew up, was owned by Judith’s mother, Louise Moore, who had developed Alzheimer’s disease and needed a caretaker. The McElderys relocated from their home in Alaska to take care of her and then started a small day care in the 106-year-old house.

But it needed repairs, so the couple took out a loan with a company called World Savings and then watched as the debt was repeatedly sold – and raised.

“They said the mortgage would go up once a year,” Judith McEldery told The Skanner News this past summer. “Our mortgage was going up every ninety days.”

The couple’s financial situation melted down in the summer of 2012, when Judith’s mother died. By then the debt was owned by Nationstar Mortgage Inc.

The McElderys tried to petition Nationstar for a loan modification but by September of that year the couple was near bankruptcy and stopped making mortgage payments.

Finally in January of 2013, the company made the McElderys an offer.

“Nationstar promised Mr. McEldery over the phone and in writing that he could avoid foreclosure, stay in his home, and modify his mortgage if he provided documentation and made three payments in the amount of $1,394.76,” court documents say.

“Nationstar also promised Mr. McEldery that he had been assigned a single point of

contact (Daniel Nettles) within the company to assist him and answer his questions.”

The McElderys sent checks for $1,394.76 in February, March, April, May, and June of 2013.

That’s where the allegations of fraud come in; after the March payment was sent, documents show Nationstar claimed they didn’t receive it. So the couple – which used cashier’s checks specifically to make these payments – sent proof that the check was purchased and sent.

However Nationstar – after cashing their April check – told the McElderys it was cancelling their loan modification because they had not paid for March. The couple then sent more proof that checks had been mailed to Nationstar for February, March and April as well.

Meanwhile, court documents say the McElderys called “Daniel Nettles” more than a dozen times but his voicemail was always full; he never responded to any communication. Then the McElderys started trying to call the main switchboard but never connected with anyone who could help them.

“Nationstar intentionally ignored the McEldery Family’s desperate calls for help,” legal documents say. “Nationstar was secretly planning to sue the McEldery Family behind their back.”

Panicked about losing the house, the McElderys sent a check to cover the month of May; it was returned by Nationstar with a bizarre note both rejecting their payment and threatening to recover money for their debt.

Then Nationstar cashed a June payment by the McElderys – as well as their March check.

“The McEldery Family later learned Nationstar’s attorney signed a summons dated May 2, 2013 naming Mr. McEldery, his wife Judy McEldery, and his deceased mother-in-law Louise Moore as defendants in a foreclosure lawsuit,” court documents say.

The case heated up last July when a bankruptcy court judge issued Nationstar an order to prove it shouldn't be held in contempt for its collection of payments from the McElderys.

In August, the couple posted a legal victory after charging that Nationstar had cashed the payment checks under false pretenses. The foreclosure case was dismissed, Nationstar agreed to modify the McElderys’ loan, and the court left the way open for the McElderys to sue Nationstar for wrongdoing.

On Oct. 20, the McElderys filed suit against Nationstar for “mortgage fraud & elder abuse,” according to court documents, and the company moved to settle Nov. 8.

Fuller says the McElderys’ complaint followed the case of Corvello v. Wells Fargo, in which the 9^th Circuit Court found that the bank “breached a contractual obligation” with customers who had been told they would receive a mortgage loan modification in a trial period plan if they followed a series of actions and made payments to the bank – but not all the customers who did so got loan modifications.

The banking giant is expected to continue appealing that case.

“To me it’s important that homeowners be willing to fight for their rights,” Fuller says.

Read more about the case and about foreclosure law on Fuller’s blog, www.underdoglawblog.com.