Marine fights to keep house

A decorated Marine Corps pilot who took part in hundreds of combat missions in three wars plans to make one last stand if police show up at his Oregon home to evict him after a bank foreclosed on his property.

“The Washington County Sheriff’s Office asked me if I would resist, and I told them, ’I won’t cooperate and walk out of the house with you,’” said retired Col. Ken Reusser, 84, who lives there with his wife, Trudy, 65. “They might have to carry me out.”

The Seattle-based Washington Mutual Bank holds the mortgage on the Reussers’ home, on which it foreclosed Dec. 16 after the retired colonel failed to make payments. The couple say they are broke after falling victim to a Ponzi scheme.

Washington Mutual denies the Reussers are bankrupt. The bank says the couple, in their bankruptcy protection filing, cite a total monthly income of $12,754, including salaries, pensions and Social Security benefits.

In Oregon, there has been extensive press coverage of the Reussers’ fight to save their home, valued at more than $1 million. Col. Reusser built the mountain “dream house” himself 15 years ago on land where his grandfather lived more than a century ago.

Washington Mutual says the Reussers owe $991,000 on the mortgage and would have to pay $160,000 to bring the account current. The couple’s last payment of $37,000 was on Aug. 2, 2002, the bank said.

During World War II, Col. Reusser flew with Gregory “Pappy” Boyington’s famed Black Sheep Squadron, and he fought two more wars in the skies over Korea and Vietnam. By the time his 27-year career ended, records show, he was shot down five times and was awarded four Purple Hearts, two Navy Crosses, two Bronze Stars, two Legions of Merit and 18 Air Medals.

The colonel said his financial troubles began 21/2 years ago when he got involved in a real estate scam.

“It paid a high rate of interest. I knew people who were connected with it, who were getting checks, so I joined the group. I got in just in time not to get anything back,” he said, adding that his $260,000 loss was part of a total loss of roughly $6 million by investors. He said it is doubtful the money will be recovered.

The couple then hired a bookkeeper who siphoned $83,000 from their savings. The bookkeeper was convicted and imprisoned for forging the Reussers’ names on stolen checks and depositing the money into his personal accounts.

Paul Knobel of Amity, Ore., who is part of a growing movement to block the eviction of the Reussers, said Washington Mutual deserves some blame for the bookkeeper’s illegal activities, “because the bank thought he was the colonel” and allowed him to engage in transactions without showing proper identification.

Col. Reusser tried to sue the bank, and when the institution failed to respond to his charges for nearly two months, he sought a default judgment. A judge granted the default in the amount of more than $1 million.

“But eight days later, I got another notice to appear before another judge. He said the default was null and void, and he set it aside,” the colonel said.

Washington Mutual spokeswoman Libby Hutchinson said the bank hadn’t been notified of the first hearing.

The Reussers were evicted two weeks ago but returned. Sheriff’s deputies broke down the house’s front door after repeatedly knocking and ringing the doorbell and not gaining entry, said spokeswoman Sandy James.

Ms. Hutchinson said the Reussers changed the locks after the eviction and have continued to live in the home while their attorney and the bank review the case.

“It’s legally our property now,” she said, but the bank has allowed the Reussers to continue living there.

Col. Reusser had a buyer lined up to pay $750,000 for the home, but said Washington Mutual refused to cooperate with the sale.

Ms. Hutchinson said the bank would have agreed to the sale “even though it would have meant a loss of $260,000 for us,” if Col. Reusser had agreed to drop his lawsuit against Washington Mutual. But he refused, she said, and the lawsuit subsequently has been dismissed.

Asked whether the bank would recognize another sale of the property, Ms. Hutchinson said, “We’d certainly have to consider it.”