Finally Some Justice for a Homeowner

This from WFMY TV Channel 2 in Florida:

Have you heard the one about a homeowner foreclosing on a bank?  Well, it has happened in Florida and involves a North Carolina based bank. Instead of Bank of America foreclosing on some Florida homeowner, the homeowners had sheriff’s deputies foreclose on the bank.

It started five months ago when Bank of America filed foreclosure papers on the home of a couple, who didn’t owe a dime on their home.  The couple said they paid cash for the house.  The case went to court and the homeowners were able to prove they didn’t owe Bank of America anything on the house. In fact, it was proven that the couple never even had a mortgage bill to pay. A Collier County Judge agreed and after the hearing, Bank of America was ordered, by the court to pay the legal fees of the homeowners’, Maurenn Nyergers and her husband.  The Judge said the bank wrongfully tried to foreclose on the Nyergers’ house.

So, how did it end with bank being foreclosed on?  After more than 5 months of the judge’s ruling, the bank still hadn’t paid the legal fees, and the homeowner’s attorney did exactly what the bank tried to do to the homeowners. He seized the bank’s assets.

“They’ve ignored our calls, ignored our letters, legally this is the next step to get my clients compensated, ” attorney Todd Allen told CBS.

Sheriff’s deputies, movers, and the Nyergers’ attorney went to the bank and foreclosed on it. The attorney gave instructions to to remove desks, computers, copiers, filing cabinets and any cash in the teller’s drawers.

After about an hour of being locked out of the bank, the bank manager handed the attorney a check for the legal fees.

“As a foreclosure defense attorney this is sweet justice” says Allen.

Allen says this is something that he sees often in court, banks making errors because they didn’t investigate the foreclosure and it becomes a lengthy and expensive battle for the homeowner.

Of course if there were true justice, some Bank of America executives should spend a few days in the county lockup for contempt of court.

High Noon: Banks vs. The Law (Mortgage Foreclosures) – Part 3

Ok, continuing the series on the mortgage foreclosure crisis here. For background on the legal side of the problem see Part 1 and for a humorous look by Jon Stewart at the crisis see Part 2.

The banks are claiming that the problems are only paperwork glitches, that all the people being foreclosed on are in default and owe serious money, and that foreclosures will resume soon.  Kind of a “nothing to see here, move along” response.  This pitch is getting echoed by politicians, the Wall Street Journal (I don’t link to pay sites), and, of course, the banks.  The White House seems to be falling into line with their bosses, the banks, too.  From the New York Times (free registration may be required):

The industry has argued in response that problems should be addressed without halting all foreclosures, because a moratorium would damage the economy. “It must be recognized that the mortgage market, investors and the health of the economy are all interrelated,” Tim Ryan, president of the Securities Industry and Financial Markets Association, said Monday.

The White House shares those concerns, and it has tried to defuse the issue by arguing that problems can be addressed without imposing a moratorium.

“There are, in fact, valid foreclosures that probably should go forward,” David Axelrod, a senior White House adviser, said Sunday on CBS.

Administration officials argue in part that the problems that have emerged in recent weeks do not change the fact that lenders are seeking to foreclose on people who borrowed and then failed to repay. Most of the identified problems are best described as technicalities, not miscarriages of justice.

But we also know it’s patently false.  There are clear cases of erroneous foreclosures including, but not limited to these reported in the same Times article:

Advocates for homeowners, however, say that the pattern of sloppiness allows and encourages more serious abuses. They point to a growing number of documented cases in which lenders mistakenly seized homes.

Bank of America apologized last month for foreclosing on a home in Fort Lauderdale, Fla. The homeowner didn’t even have a mortgage. The bank had failed to notice that the previous owner had repaid the mortgage loan.

Last year the company’s contractors entered the home of a Pittsburgh woman, changed the locks, cut off the utilities and seized her pet parrot. The bank later acknowledged that the woman had not missed any mortgage payments.

Other companies including Citigroup and JPMorgan Chase also have apologized for mistaken attempts to seize homes they didn’t own.

Dozens of people have sued lenders charging that their homes were foreclosed even after the lender agreed to a loan modification or repayment plan.

I just don’t accept that foreclosing and seizing (really stealing) a house that DID  NOT HAVE A MORTGAGE is more than a “paperwork glitch”.  There’s much more to this crisis.

 

High Noon: Banks vs. The Law (Mortgage Foreclosures) – Part 2

So, just what is the “mortgage foreclosure crisis”?  One part, as suggested in part 1 of my “High Noon” series of posts on this issue is that the banks have lied in court in order to save money, cut corners, and rapidly foreclose on houses that they may or may not be able to prove they should be able to legally foreclose.  Part 1 suggested a political/legal crisis as we decide whether banks have to comply with laws and court procedures or not.

Now before I get into more explanation of the problems and potential risks to the economy from these foreclosure documentation problems, I want  to Jon Stewart give a quick overview of the problem. Unfortunately I can’t embed the video here (WordPress.com doesn’t have code for a Daily Show embed) so go here: http://www.thedailyshow.com/watch/thu-october-7-2010/foreclosure-crisis.

Seems the Rich Default Even More

Well, so much for the idea that the foreclosure crisis is /was due to those “irresponsible low-income people buying stuff they can’t afford”.  It seems the rich are even less responsible:

the rich have stopped paying the mortgage at a rate that greatly exceeds the rest of the population.

More than one in seven homeowners with loans in excess of a million dollars are seriously delinquent, according to data compiled for The New York Times by the real estate analytics firm CoreLogic.

By contrast, homeowners with less lavish housing are much more likely to keep writing checks to their lender. About one in 12 mortgages below the million-dollar mark is delinquent.

Though it is hard to prove, the CoreLogic data suggest that many of the well-to-do are purposely dumping their financially draining properties, just as they would any sour investment.

“The rich are different: they are more ruthless,” said Sam Khater, CoreLogic’s senior economist.

From the New York Times.