America’s biggest banks have produced a litany of foreclosure horror stories recently, from Chase bank selling a off a soldier’s home on the very same day that he returned from Iraq to a women losing her home to foreclosure even after scrounging together $50,000 in back mortgage-payments that the bank said she owed. Wells Fargo foreclosed on one borrower for missing a few payments…after Wells Fargo specifically the borrower to miss a few payments.
Bank of America also has a deep list of mortgage misdeeds, from improperly foreclosing on a family and stealing its pet parrot to blatantly violating its contract with Treasury after joining one of the administration’s anti-foreclosure programs. And BofA has been arguably the least capable bank when it comes to getting borrowers into sustainable mortgage modifications, due to its inability to keep paperwork straight or review cases in a timely manner.
Epitomizing this problem, Bank of America foreclosed on one New Jersey resident who not only was current on his mortgage payments, but had been approved for a modification by the bank just two days before. The Newark Star-Ledger has the details:
He finished the application process [for a mortgage modification] and continued making his payments, knowing lenders were backed up with modification requests. [...] Finally, on April 10, a letter. But not the one he was expecting. “According to our records, payment for your home loan is past due,” it said. Conca finally called a lawyer for help, and the lawyer corresponded with the lender, but got nowhere.
Then on July 19, Conca received a letter saying he was approved for a rate reduction on a modified mortgage and he’d receive the paperwork in 10 days.
Relief, but it was only temporary.
Two days later he received a different kind of letter from Bank of America: a notice of intention to foreclose.
Bank of America didn’t admit to the error — and rescind its foreclosure notice — until contacted by the Star-Ledger. In the meantime, the borrower’s credit score has been reduced.
This week, BofA was forced to apologize to an elderly couple who it had foreclosed upon after they paid their mortgage too early. That it takes media attention to get BofA to acknowledge these sorts of egregious errors is a testament to how poorly its mortgage modification programs are functioning.