American Banker has posted an article that discusses the continuing problem of banks repossessing the wrong home. This certainly does nothing to help the banking industry’s reputation that has been so tarnished by various bonuses and bailouts.
Not surprisingly, the banking industry is claiming it’s not all their fault. There are so many foreclosures being processed through several channels of communication that information, such as addresses, gets “garbled” along the way. That’s a fancy way of saying they get the wrong house. The Bank of America changes the locks on about 16,000 houses per month and claims it has an accuracy rate of 99.99%. Still, just because errors are rare does not mean they don’t happen. When you are taking someone’s house and throwing their stuff away, it might be wise to be 100% sure…..
There’s the case of Alan Schroit, for example, who filed a lawsuit against B of A in January claiming the lender mistakenly seized his Galveston, Texas, vacation home. According to the suit, Schroit did not have a mortgage with B of A, or any other lender. His case in federal court in Texas is still pending. Similar incidents involving B of A have been reported in Spring Hill, Fla., in January and Trenton, N.J., in December.
Mortgage owning companies are (rightfully so) trying to crack down and document nearly every move they make to avoid foreclosing on the wrong home. We’ll see if they are really doing this….
Once B of A confirms the contractor has the right home, it gives him or her an authorization number. That number is also included on the sticker that is placed on the front door, with a toll-free number that the homeowner can call.
B of A has also assigned about 50 employees, some of them new hires, to a new 24-hour hot line for homeowners and contractors.
Outdated loan information can also lead to mistakes.
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