Probably the most disturbing thing to come out of the real estate crash and foreclosure mess is how often banks have used unethical tactics to try to take away people's homes.
Obviously, people who are fighting to keep their home from foreclosure in Miami are there because they missed payments. In many cases, they probably tried to work with bank officials to modify a loan or get a lower interest rate in order to stay up to date on payments.
But the banks apparently care more about making about money. There's a lot of money being made when homes are foreclosed, sold at auction, then going after the former homeowner in an attempt to get a deficiency judgment in Miami.
Miami foreclosure defense lawyers have seen banks make up documents that were never there before, employ robo-signing techniques whereby unauthorized people signed off on documents that should have been notarized by bank workers, and other misdeeds.
In a recent case in New York, a Bank of America lawyer was trying to foreclose on a New York City police officer who didn't earn enough to qualify for a mortgage modification, according to The New York Times. The officer didn't send in the right documents, the lawyer argued.
But the judge cut off the lawyer, telling him he was lying and trying to blame the homeowner when bank officials weren't there to back up the story.
"Bank of America got a bailout, and this is an outrage, how this man has been treated," said New York Supreme Court Justice Catherine M. Bartlett. "Hard-working, middle-class Americans are trying to make it, trying to refinance with your bank."
She ordered bank officials to show up in court to prove the allegations that the bank's lawyer was making.
In another story, this one by National Public Radio, a report showed the damage that can be done by banks who have little accountability. The story looks at the fact that many homeowners should have qualified for loan modifications through federal programs, but were denied by banks.
With little evidence of why they were denied, but only a form letter stating so, banks would move forward with foreclosure and give homeowners no reasoning. They would sometimes tell homeowners that they sent in the wrong paperwork or missed deadlines even when people had proof they had followed the rules.
That happened to a family of 10 in Wisconsin. Bank of America rejected their loan modification request. They put down $20,000 for a $130,000 house, but were stuck in a 10 percent rate home loan from Countrywide, which Bank of America later bought.
The government's HAMP program would have worked perfect, NPR states, but the bank repeatedly lost documents and then said they didn't make a payment when they did. When they attempted to prove she had made the payment with paperwork in hand, bank officials said there was nothing they could do.
HAMP would have allowed the family to lower their interest down to about 4 percent, which would have made their payments affordable, but the banks denied them. Then, they came and changed the locks and put a foreclosure sign on the door.
Months later, after the family moved into a local church, Bank of America sent them a letter admitting their error and offering a loan modification. Too little too late, however. After a year through a Wisconsin winter, the basement is flooded, the sewer system is trashed, mice have infested it and it needs a new furnace.
Bank of America told NPR it would fix the family's house because of the error. It appears they're trying to avoid a lawsuit, but maybe the family can get back in their home.
If you're battling foreclosure in Miami or the surrounding areas, contact Bruce Jacobs & Associates for a confidential appointment to discuss your rights. Call (305) 358-7991.
More Blog Entries:
Banks Excuses on Foreclosure Growing Stale, by Michael Powell, The New York Times
After Banks' Mistakes, Homeowners Pick up Pieces, by Chris Arnold, National Public Radio