Christopher Marconi was in the shower when he heard a loud banging on his door. By the time he grabbed a towel and hustled to his front step, a U.S. marshal's sedan was peeling out of his driveway. Nailed to Marconi's front door was a foreclosure summons from Wells Fargo, naming him as a defendant. But the notice was for a house Marconi had never seen — on a mortgage he never had.
Tom Williams was in his kitchen thumbing through the mail when he opened a letter from GMAC. It informed him that the bank would confiscate his house unless he immediately paid off his mortgage balance of $276,000. But Williams had never missed a mortgage payment. And his loan wasn't due to mature until 2032.
Warren Nyerges opened his front door in Naples, Fla., to find a scraggly-haired summons server standing on his stoop. He plopped a foreclosure notice from Bank of America in Nyerges' hands. But Nyerges had paid for his house in cash. And he'd never had a checking account, much less a mortgage, with Bank of America.
By now, you may have heard the stories of bank robo-signers powering through hundreds of foreclosure affidavits a day without verifying a single fact. But most of those involved homeowners who had stopped paying their mortgage. They were genuine defaulters. Now a new species of homeowner is getting pushed into foreclosure hell.
People have always loved to complain about their banks. The push-button circus that passes for customer service. The larding on of fees. But the false foreclosure cases are hardly the usual complaints. These homeowners paid their mortgages on time. Some even paid off their loans. Worse, those on the receiving end of a bad foreclosure claim tell similar stories of getting bounced from one bank official to the next with no resolution while the foreclosure process continues apace.
Many have to resort to paying a lawyer, even after presenting documentation. They say they have to sue not only to stop the wrongful foreclosure but also to attempt to win back their costs.
"This is the worst I've ever seen it," says Ira Rheingold, an attorney and executive director of the National Association of Consumer Advocates. Diane Thompson has defended hundreds of foreclosure cases. "In virtually every case, I believe the homeowner was not in default when you looked at the surrounding facts. It is a widespread problem throughout the country."
Homeowners in Florida, Nevada, Texas and Pennsylvania have filed lawsuits alleging that they were victims of mistaken foreclosure. In many of those cases, the bank went so far as to haul away belongings and change the locks on the wrong homes.
One such suit was filed in March by Pennsylvania homeowner Angela Iannelli. She was up to date on her payments when, she says, she arrived home in October 2009 to find that Bank of America had ransacked her belongings, cut off her utilities, poured anti-freeze down her drains, padlocked her doors and confiscated Luke, her pet parrot of 10 years. It took her six weeks to get the bank to clean up the house.
Iannelli's lawyer says the parties are in the process of "mutually resolving the issues" and the lawsuit is "in the process of being discontinued." Bank of America did not immediately respond to a request for comment on her case.
But the incidents haven't stopped. Maria and Jose Perez of Seguin, Texas filed suit in October after Bank of America sent them a notice that their house was scheduled for a foreclosure sale Nov. 2. The couple say they are current on their mortgage payment and they have no loan with Bank of America. A trial is set for June 13.
Now the class actions are coming. In Kentucky and California, class-action lawsuits have been filed against major lenders on behalf of homeowners who allege that they made all of their payments but got foreclosed on anyway.
"It is mind-boggling that these large banks accepted billions and billions of TARP money from the government, and they are just committing a fraud on the American people," says Jack Gaitlin, who filed the Kentucky suit on Oct. 4.
Bill Black and Dylan Ratigan tell the truth...
Video: Ratigan with Black and Inside Job Director Charles Ferguson
I've never posted this clip before, and it's better than the one at the top, in my view. Click here for Ratigan's complete interview with Charles Ferguson.
- "There have been ZERO criminal referrals."
- “None of that is happening because the people in charge don’t look.”
- “If you looked you would have seen fraud incidence in these mortgages in the 80% range and they could not have been sold.”
- “The real losses are being hidden BY THE FEDERAL RESERVE to the tune of trillions of dollars RIGHT NOW.”
5 foreclosure links:
- The foreclosure crisis isn't just about lost documents. It's about trust—and a clash over who gets stuck with $1.1 trillion in losses