Woman loses half of her house to neighbor

BREWSTER, N.Y. — A woman who lives on a hillside that straddles the New York-Connecticut line has learned that she doesn't own half her house — all because her mortgage servicer hadn't paid the property taxes.

But until Roseanne Di Guilio decided that she wanted to build a shed a couple of years ago near the property line with her neighbor, she had no idea that she had a problem.

"They told me I no longer owned my land," said Di Guilio, who had called officials in the town of Patterson, N.Y. "I was like, 'What do you mean I don't own that property? I've owned this property since 1997.' "

But Di Guilio lost her New York land in 2010 because the mortgage servicer hadn't paid annual property taxes of about $200 since 2004.

Putnam County foreclosed, and her neighbor, Alethea Jacob, bought it for $275 in a county auction.

"I'm just an average person living my life," said Di Guilio, who works for an electrical contractor in Bethel, Conn. "My neighbor is an opportunist. She was looking for something for nothing."

Not so, said Jacob's lawyer, Robert Karlsson.

"There was a yellow sign posted on the tree announcing a real-estate sale, and she decided she wanted to snap it up," Karlsson said. "Who wouldn't want to make their property larger? She bid on the property, and to her delight, there she goes — she has a larger property."

But Jacob's 0.2 acres includes Di Guilio's living room, kitchen and sun porch. Part of her bathroom is in New York.

And while Jacob took ownership of half of the house, she let Di Guilio keep paying her homeowners' insurance. And Di Guilio paid a tree service to clean up the yard that she didn't realize Jacob owned after trees came down in an October 2011 storm.

Di Guilio also paid contractors to mow the lawn, clean the gutters and blow the leaves off what had become her neighbor's property.

"I escrowed my taxes and thought they were being paid," Di Guilio said. "But they never were."

The snafu happened after Di Guilo refinanced her mortgage in 2004 and continued through a second refinance in 2006. She used to pay only her New Fairfield, Conn., property taxes via an escrow account and wrote a check to Patterson, N.Y., for the land.

In 2004, JP Morgan Chase (NYSE: JPM) officials told her they also needed to put money for the New York taxes into the escrow account. But the bank never paid the bill; it sold the loan in 2010 to Seterus Inc.

Spokesmen for both companies declined to comment.

Di Guilio also never saw that notice posted on a tree nor did she receive a notice in the mail from Putnam County alerting her to the delinquencies, she said.

Her status straddling the state line gives her two addresses: 46 Hudson Drive in Brewster and 62 Hudson Drive in New Fairfield. The Brewster mailbox is sealed, and she receives mail at the New Fairfield address.

New York law states that a municipality seeking to foreclose must notify a property owner by mail, and if that fails, officials must ask the postmaster for an alternative address, said Di Guilio's lawyer, Michael Caruso. The foreclosure notice also must be published in a local newspaper and posted in a public place, such as the county clerk's office.

Andrew Negro, Putnam Deputy county attorney, declined to comment on how and when Di Guilio received notice.

Di Guilio is seeking to overturn the foreclosure in a case before state Supreme Court Justice Victor Grossman. But the resolution is far from certain because she didn't bring the action within the two-year statute of limitations.

In settlement talks before the court date, Di Guilio said she was shocked by her neighbor's initial demand of $150,000, now down to $35,000.

Jacob's lawyer said the mortgage company would make the payment, but Di Guilio hasn't accepted the settlement yet.

"I feel like I was the one who was damaged and victimized," she said. "I don't think it's fair that my neighbor should profit."