In one of the more bizarre foreclosure cases, Bank of America is threatening to throw a West Hartford family out of their home even though the couple never missed a mortgage payment.
The largest bank in the United States earlier this month notified Shock Baitch and his wife Lisa (Friedman) Baitch that foreclosure action will start today – Christmas eve – unless the couple agrees to put their home up for a forced sale.
Why? Because another unit of Bank of America erroneously reported to credit agencies that the family was seeking a loan modification, ruining their credit rating and as the result putting their mortgage into default.
All this is happening even though the bank – after admitting it erred and sent a letter of apology in September – handed this case to a special unit at Bank of America that is charged with dealing with severe customer issues. It promised to notify the credit reporting agencies that the couple were not deadbeats, but were good credit risks.
This is the nightmare scenario for both the banks and for mortgage holders. Banks foreclosing on people on Christmas Eve because the bank can't get their own paperwork straight? Exactly how many people will that motivate to try to buy or sell a home in 2011? Would you, knowing that foreclosure paperwork is so badly fraudulent that a bank will foreclose on somebody who was never even late on a payment?
Barry breaks down the cause of the problem quite effectively:
The obvious answer is the illegal processing of foreclosures. When lawyers, bank executives and there outside contractors are paid to violate the law, the local State Attorney General needs to prosecute these felons. Where Lawyers perjure themselves, swearing they have verified, reviewed and confirmed foreclosure files they never so much have looked at, they need to be disbarred.
Its called the rule of law, and its long past time we actually enforced it.
The legal and economic chain reaction from Foreclosuregate is the number one reason why 2011 is going to be a nightmare year for a whole lot of Americans. It's always darkest just before it goes pitch black. No wonder today's third quarter 2010 foreclosure numbers are so dismal.
Newly initiated foreclosures increased to 382,000 in the third quarter, a 31.2 percent jump over the previous quarter and a 3.7 percent rise from a year ago, the Office of the Comptroller of the Currency and the Office of Thrift Supervision said in their quarterly mortgage report.
The number of foreclosures in process increased to 1.2 million, a 4.5 percent increase from the second quarter and a 10.1 percent increase from a year ago, according to the regulators.
The housing depression continues unabated. Gary Shilling now says another 20% housing price drop is in the works by 2012. If he's right, America is in serious trouble. You think there'd be a sense of urgency in Washington but...naah.
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1 comment:
Bank of America is up to alot of fuckery. I work for lawyer; we do alot of bankruptcies. We're averaging 2 calls a week from frantic people with BofA mortgages who are facing sheriff's sales, but are current (or only slightly behind) on their payments.
My favorite was a couple who had gotten behind (new baby, loss of overtime hours) but are now financially stable. They called B of A to find out how much they needed to pay to get current; B of A wouldn't tell them.
Matt Taibbi wrote about this: http://www.rollingstone.com/politics/news/matt-taibbi-courts-helping-banks-screw-over-homeowners-20101110
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