Neighborhood Awarded $1.1 Million In Judgment Against Morgan Stanley

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Updated: 5/24/2013 5:34 pm
RENO, NEV. (KRNV & MyNews4.com)--A neighborhood has been awarded a $1.1 million dollar settlement against Morgan Stanley. Neighbors say the bank failed to foreclose on the home, creating an eyesore and fire hazard.

"I felt helpless," says Marti Reedy as she describes what it was like to look across the street at the abandoned home.

Marti and Jim Reedy moved into their home on Circle Drive two years ago. At that time, they say the house across the street from then was like any other on the street, occupied and taken care of.  They say things changed when both owners passed away.  They say the family trust stopped paying the mortgage and the mortgage company, Morgan Stanley, didn't foreclose on the home. For over a year, they say the house sat abandoned and created an eyesore in the upscale neighborhood.

"Even though we were new, they said we are in this together and said what can we do to help alleviate this situation," says Reedy.

The Reedys and others turned to their neighbor, John Ohlson, who would eventually represent the neighborhood in a lawsuit against Morgan Stanley Loan and Trust and the family estate who legally owned the home.

"The landscaping died, the house fell into disrepair, a squatter moved in and was raising chickens in the house, his pals were coming around and causing trouble, things were getting pretty bad," says Ohlson.

Last fall, the wheels of the lawsuit started turning, on option both Ohlson and the Reedy's say was the last resort.

"The first thing people said when we started talking about a lawsuits that if you're in this for money, you may just not stay at the meeting because it wasn't about the money," says Reedy.

Marti says it was about upgrading the property and getting a nice family to move in.

Ohlson and the neighborhood went ahead with the lawsuit and this past Wednesday, a judgment was ordered in the amount of $1.1 million, to be paid by Morgan Stanley. According to the judgment, Morgan Stanley failed to answer the lawsuit so the amount was awarded by default.

"They're too big to take notice of it, they apparently don't care about it. What's a million bucks here and there to Morgan Stanley," says Ohlson.

The neighborhood also was awarded the title of the home. Neighbors say the money awarded will go into repairing the home.

"Now the work begins, we have to clean this place up and find a nice family to move in," says Ohlson.

Once the awarded amount is divided up, each home in the lawsuit will walk away with $30,000.

News 4 reached out to Morgan Stanley, but we have not heard back.
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Kramer - 5/26/2013 4:24 PM
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drop in the bucket. many houses are in this situation, and/or foreclosure clean-outs mindlessly and illegally dump the entire household contents onto sidewalks and commercial lots. Where is this Circle location, anyway? maybe Nv4 could describe this "upscale" area for us non-realtors?
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