Fighting Wrongful Foreclosures

TXInvestor what about the 4500 foreclosures BofA openly admits to in error. And have you asked yourself hy there is such an explosion of foreclosures. Maybe ecause hard times has not hit you it's impossible for you to empathize with these homeowners. I think your comments were cold-hearted and greedy sounding. Keep it up, and the economy will surely collapse by greedy bans and investors preying on these suffering homeowners.

I’m sorry Mr. Lindscomb, you are a great reporter, but the report you did yesterday (posted here) was largely inaccurate and very misleading. While “wrongful foreclosures” do happen in the industry, in the hundreds of millions that are foreclosed every month, they are a rare occurrence. “Mixups” and “clerical errors” are not as common as media reports like these would lead you to believe. Banks have teams of lawyers drafting their documents and it’s very rare that a borrower who is current will have a bank “wrongfully foreclose” on them… it just doesn’t happen. In your second point, people’s homes just don’t “end up at public auctions”. They are often 6-8 months delinquent, could not qualify for federal assistance, all modifications exhausted, and the banks have to secure their assets. While some are indeed sold for deep discounts, 90-95% of the properties at the foreclosure auction are taken back by the banks because there is little to no equity in the property. Your representation of non-escrowed loans is inaccurate as well. Almost all non-escrowed loans give the lender the option to later create an escrow account to pay taxes and insurance if the bank deems it prudent, and will include the monthly escrow payment in with the mortgage payment. We don’t’ know from the report, but it’s safe to assume that the borrowers were likely behind on their payments or taxes, and “in this tight economy with the cash flow”, borrowers are more likely to buy things like food and electricity, than make the tax payment, which puts the bank at risk of a tax lien.

Also misleading is your statement about Attorney General Abbott. He did try to issue a moratorium on Texas foreclosures a couple of months ago, and was in effect for a few days, but the reason he has “had little luck”, is because after their review his staff couldn’t find enough instances of these “wrongful foreclosures”, and that they were all abiding by common real estate law. The most inaccurate portion of your report is the final advice to owners who are “trying to rework the loan”. Lenders always use the escrow account to pay taxes and insurance, but you don’t need to “keep an eye on your escrow account balance” to make sure the banks pay the taxes because the banks will always pay the taxes and insurance. Even so, no bank will foreclose on a current loan just because the bank failed to pay taxes, which almost never happens. Your recommendation to “make sure the agreement you sign doesn’t… override any loan agreements” is flat wrong. Any owner who is trying to “rework the loan”, is trying to modify their loan, and any/all documents that come from those negotiations will indeed “override” and modify previous loan agreements! I was so moved by the inaccuracies of your report that I just had to post this response and send you an email. It is very important that homeowners and borrowers receive the right information in these difficult times, and are properly educated on their options and rights. Thank you for your reporting and what you do for our community, Tony Zavala, Real Estate Investor and Trainer www.ITFtraining.com

It sounds like, in the story, they did pay the mortgage, they just didn't pay the property taxes through the ban, but were trying another route. Some banks have gotten far too forclosure happy, and that's not good for our economy. Banks are short on cash, so they're willing to take the cash they can get from an auction, now, rather than allowing people to pay off the mortgage over time, which is totally counter productive. Yes, people SHOULD pay their debts. I have no good to say about people who purposefully avoid them (like the old lady in Florida), but alot of people are being forclosed on who have done NOTHING wrong (like a man whose mortgage amount was CHANGED by the bank) or who have had drastic changes in circumstance but are still trying to do the right thing and pay what they owe.

If you didn't pay your house bill, you're a bum, and it's not a wrongful foreclosure. The bank owns your home until you have the title in hand. Have a great day.