The mortgage companies really do not care

foreclosure by woodleywonderworks

Bank of America forecloses on a man who has no mortgage
[Via Boing Boing]

Jason Grodensky, a Fort Lauderdale man who bought his house with cash last December was surprised to discover that Bank of America had foreclosed on him, though he has no mortgage. Florida’s foreclosure mills being what they are, the checks and balances against erroneous foreclosure have eroded to the point where banks can seize and sell homes they have no interest in.

Grodensky’s story and other tales of foreclosure mistakes started popping up recently across South Florida. This week, GMAC Mortgage — one of the nation’s largest mortgage servicers and a major mortgage lender — told real estate agents to stop evicting residents and suspend sales of properties that had been taken from homeowners in foreclosure. The company said it might have to “correct” some of its foreclosures, but was not halting those in process.

In Florida courts, which have been swamped with foreclosure cases for several years, mistakes “happen all the time,” said foreclosure defense attorney Matt Weidner in St. Petersburg. “It’s just not getting reported.”

And the legal efforts required to resolve a foreclosure mistake are complicated. “Unwrapping it is like unwrapping Fort Knox,” said Carol Asbury, a Fort Lauderdale foreclosure attorney. “It’s very difficult.”

Man’s home sold out from under him in foreclosure mistake


This is not the first time I have heard about a home being sold when there was no mortgage involved. Makes you wonder how many other types of mistaken foreclosures there are, especially given that one guy was supposed to be checking, signing and getting notarized 10,000 foreclosures a month. That worked out to about a minute devoted to each foreclosure. Simply not possible.

They do not care about getting it right. And, as shown here, there are many cases appearing where the entity doing ths foreclosing has no legal grounds to to that. LAst year the courts trusted that these companies had it right. Now, not so sure.

What is troubling is that only 23 states have judicial oversight of foreclosures. The other 27 do not. So, GMAC is continuing to do what it has been doing for those states because there is nothing to restrain them. Nice.

Companies that commit acts like this should be heavily fined, to the point where they actually take notice and put in procedures to prevent it from happening. It should not be up to the innocent homeowner to have to fight these mistakes.

But what is really stupid, as shown in the article, is that banks are going through with foreclosure, even when there is a buyer for the house who is willing to pay more money that the bank can get from foreclosing.

Yep, the banks not only screw up things like selling houses they do not own but also are not selling houses that they could get a better return on. Why? Because they do not lose any money no matter what happens. The use the financial system to protect themselves so they do not have any real skin in the game. They get the same amount for their books no matter what happens with the house.

Since they really do not care, they have no reason to have a tight process. But their lack of caring results in greater reductions in housing prices than would normally happen. These foreclosures and cheaper houses hurt all of us.

But they do not care. They are protected and so are the salaries of their CEOs. What does it matter if it hurts the rest of us?

2 thoughts on “The mortgage companies really do not care

    1. Maybe because B of A is one of the largest servicers of residential mortgages. Only Wells Fargo comes close and they are leaders in commercial, not residential. If you do a search for ‘Wells Fargo foreclosure mistake’, you will also find lots of hits.

      How about telling a family, in writing, that it will not sell the house out from under them during a 30 day period, and then doing just that, saying that what they stated in the letter was wrong? Wells Fargo was reported doing that just two weeks ago. This is apparently a tactic Wells Fargo does a lot – selling a home out from under someone – perhaps to prevent people from walking or using legal mitigation procedures while Wells Fargo looks for a buyer.

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