“Unfortunate Errors” Lead To Wrongful Foreclosures

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Associated Press has posted an article that discusses how “unfortunate errors” by banks can lead to people wrongfully losing their homes. Michelle Conlin, author of the article, gives several examples of homeowners who had either paid for their houses in full, or weren’t behind on mortgage payments, receiving foreclosure notices from their banks. These homeowners often find themselves being “bounced from one bank official to the next with no resolution while the foreclosure process continues apace.”

Many of these homeowners find themselves hiring a lawyer, even after they have presented adequate documentation that the foreclosure is wrongful. They say they have to sue the bank to win back their costs to pay the lawyer, as well as to stop the wrongful foreclosure.

There aren’t any statistics for homeowners who have been wrongfully foreclosed on but real estate agents, lawyers and consumer advocates all say that the numbers are growing. There was a foreclosure hearing in November on Capitol Hill and several senators called banks out for wrongful foreclosures and said their offices were bombarded with complaints from people who had “done everything right but were being treated by banks as if they had done everything wrong.”

“This is the worst I’ve ever seen it,” says Ira Rheingold, an attorney and executive director of the National Association of Consumer Advocates. Diane Thompson, a lawyer with the National Consumer Law Center, has defended hundreds of foreclosure cases. “In virtually every case, I believe the homeowner was not in default when you looked at the surrounding facts. It is a widespread problem throughout the country.”

Florida, Pennsylvania, Nevada and Texas homeowners have all filed lawsuits against banks for not only putting them through wrongful foreclosures, but for taking away personal belongings and changing the locks on the wrong homes.

For example, Pennsylvania homeowner Angela Iannelli came home from work one day in October 2009 to find that Bank of America had “ransacked” the house, cut off utilities, poured antifreeze down the drains, padlocked her doors, and had even taken her pet parrot. It took her six weeks to get the bank to clean up their mess. Iannelli filed a lawsuit against B of A in March, but her lawyer has said that both parties are “mutually resolving the issues” and the lawsuit is “in the process of being discontinued.”

Another example is Maria and Jose Perez of Texas, who received a notice from Bank of America that said their home was scheduled for a foreclosure sale. The couple say they are up to date on mortgage payments and don’t even have a loan with B of A.

Class action lawsuits have been filed in California and Kentucky against major lenders because of homeowners in loan modification programs who were foreclosed on even though they were current on payments.

“It is mind-boggling that these large banks accepted billions and billions of TARP money from the government, and they are just committing a fraud on the American people,” says Jack Gaitlin, who filed the Kentucky suit on Oct. 4. He was referring to the 2008 government bailout of the banks, the Troubled Asset Relief Program.

Banks say they are reviewing foreclosure and mortgage procedures, as well as the cases of homeowners who were wrongfully foreclosed on. It appears that once your name appears on a bank’s “foreclosure assembly line” list, it becomes almost impossible to get off. Bank of America refers to this as an “unfortunate error.”

If you would like more information on foreclosures, please check out our articles The Three Stages Of Foreclosure In Alabama and Wrongful Foreclosures In Alabama.

If you have further questions or concerns, feel free to contact us through our website or by calling 205-879-2447. You may also obtain a copy of our free book on stopping wrongful foreclosures and the problems of hidden fees by emailing us.

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