Lekh Raj Batra and his wife Suzanne carefully saved their money over the years, looking forward to the days when their two children would be through college and the Greenbelt home they had bought 12 years earlier would be paid for.
But the Batras' sense of security was destroyed last fall when they received letters threatening to take away their home. The letters were sent by a company they only knew about from newspaper stories: Epic Mortgage Inc.
Epic Mortgage told the Batras that they had not made a payment in four months and that, if payment were not received by early January, their home would be sold.
The Batras knew there were problems with their mortgage lender, Community Savings and Loan Inc., where their life's savings were frozen as a result of the Maryland savings and loan crisis. But they were astonished that they owed even a penny to Epic Mortgage. They were further confused and outraged when they found out that Community -- which had handled the Batras' automatic mortgage payments for seven years -- and Epic Mortgage are owned by the same people.
"The whole thing is immoral," Suzanne Batra said. "We can't believe it." While many depositors' money was frozen as a result of the S&L crisis, the Batras' plight was unusual: They were caught in the confusion between Community and its array of affiliated companies.
The Batras had been notified a week before the first letter from Epic Mortgage that Community no longer was transferring their mortgage payments automatically from their savings account because of the freeze on Community's deposits. By that time, the Batras already were two payments behind, and they contend they had no idea who owned the mortgage and who should receive the payments.
After the foreclosure threat and an unexpected visit from an Epic Mortgage official, the Batras and the Greenbelt Homes Inc. cooperative, where they lived, sued Epic Mortgage, Community and Community's conservator, the Maryland Deposit Insurance Fund Corp. (MDIF).
On Jan. 9 -- a day before the threatened foreclosure -- Judge Joseph H. H. Kaplan of the Circuit Court of Baltimore City blocked it. Thus, the Batras still have their home and are making mortgage payments to Epic Mortgage, even though they cannot use their savings deposited at Community.
At that same hearing, Kaplan ordered Epic Mortgage or MDIF to provide documentation to the Batras proving who owns their mortgage. The ownership of the mortgage is important because, under the conservatorship order, any funds frozen in a Community account can be used to pay a debt, such as a mortgage, owed to Community, according to Adrian Wager-Zito, an attorney for the Batras. But to this day, neither Kaplan nor the Batras know who actually owns their mortgage.
"It's outrageous," said Ronald Coltran, a spokesman for Greenbelt Homes Inc. "We've been here 40 years, and something like this has never happened. The state of Maryland is not only taking people's life savings, but should they have the right to throw them out of their own home?"
"This has been very stressful and a considerable psychological hardship," Lekh Raj Batra said. Batra, the organizer of one of the first Maryland depositor groups, had to apply to the hardship program to withdraw college tuition payments for his two children. And the couple said they have spent thousands of dollars in legal fees.
The Batras, both scientists at the Agricultural Research Center in Greenbelt, bought their two-story, three-bedroom brick home in 1974. It is among 1,600 homes in the Greenbelt Homes Inc. cooperative, one of the first planned communities built in the late 1930s during the Roosevelt administration.
The Batras borrowed the money to buy their new home from a Greenbelt thrift, Twin Pines Savings and Loan, where they also had a savings account.
"We were the kind of people who put money aside and saved for the education of our children and old age," Suzanne Batra said. "We're not people that live on credit."
Four years later, they refinanced their mortgage with a new loan at Twin Pines and arranged to have the thrift automatically deduct their monthly mortgage payments from their Twin Pines savings account.
In 1982, Twin Pines merged with Community Savings and Loan, and Community continued the same automatic transfer arrangement with the Batras' monthly mortgage payments. Last August, however, the state of Maryland closed Community's doors. Since then, state officials have been trying to sort out the tangled relationship between the thrift and its various real-estate affiliates, including Equity Programs Investment Corp. (EPIC) and Epic Mortgage.
Until Lekh Batra received the notice in November that Community no longer was making automatic withdrawals for mortgage payments, he assumed Community still owned his mortgage.
So he immediately wrote Community: " If Community is not my mortgage holder . . .which address or who do I contact for payments to be made?"
Batra next received the Nov. 12 Epic Mortgage letter claiming that he was in default and owed the company the overdue payments. Batra wrote back to Epic Mortgage, stating that he was unaware he owed any money to Epic Mortgage and that there were sufficient funds in his Community account to make the monthly payments.
In a letter to the Batras dated Dec. 9, Epic Mortgage demanded $1,356 -- four months of mortgage payments and late fees -- and threatened to take away their home.
Batra put the mortgage money in an escrow account, refusing to pay it to Epic Mortgage until he was told who owned his loan.
In light of all the revelations about Epic Mortgage's tangled financial affairs, Batra said he feared sending money to the real-estate firm without documentation that it was his creditor. "I have a right to know who my creditors are," Batra said. "And Epic has failed to convince the court, and they have failed to convince me, about the real ownership of my mortgage." He then wrote to Kaplan, the judge who Batra had heard was handling the state's savings and loan crisis.
"We have today deposited $1,356.98 in an escrow account with a federally insured bank and wish to deposit each subsequent monthly payment until we know who is our real creditor," Batra wrote. "Have we, your honor, done the correct thing?" Kaplan forwarded the letter to Epic Mortgage.
Eventually, Epic Mortgage claimed in a letter that Fannie Mae owns 95 percent of the Batras' loan, Community owns 5 percent and Epic Mortgage is the loan servicer for these investors. However, the Batras argued in their lawsuit, "This letter does not even attempt to explain how Fannie Mae became involved."
Kaplan said at a Jan. 9 hearing: "There is uncertainty as to who holds the mortgage -- whether it is Fannie Mae that has 95 percent ownership, and Community having 5 percent ownership, or Fannie Mae having 100 percent of the ownership, or Community having 100 percent of the ownership."
"If Judge Kaplan is uncertain, how can a mere citizen be certain who to make payments to?" Batra asked.
Kaplan ordered the Batras to pay the amount they owed and future mortgage payments to Epic Mortgage until it is determined who owns their mortgage.
"All of the documentation that we have indicates that Fannie Mae owns 95 percent of their mortgage and Community owns 5 percent," J. Hardin Marion, the attorney for MDIF, Community and EPIC, said Monday. "We still have not received the basic underlying documents, but we expect to very soon."
But Wager-Zito, the attorney for the Batras, said: "From the documents they have sent us, there are absolutely no documents showing what Fannie Mae's interest in this loan is or any transaction between Fannie Mae and Epic [Mortgage] or Community."