posted 18 Oct 2010, 06:19 by Sam Mbale
updated 18 Oct 2010, 06:20
Since our economic crisis began in 2008, we have all heard
the depressing mortgage foreclosure statistics. According to
the Mortgage Brokers Association, every 3 months, 250,000 new
families enter into foreclosure. 138,000 foreclosures alone
were commenced in April of this year according to the
government. And for every home in foreclosure, as many as a
dozen homeowners find themselves seriously in arrears. If
this sounds bad, it is. But an even grimmer story is
emerging. Mistaken foreclosures.
As banks race to keep pace with the record number of
foreclosures, more and more mistakes are being made. Take
the example of Jason Grodensky of Ft. Lauderdale. When Mr.
Grodensky purchased his home, he paid cash. But in July he
learned that his house had been foreclosed by Bank of
America and sold, even though he did not have a mortgage. In
recent weeks similar stories have begun to surface from
across the nation.
How did this mistake happen? Bank of America isn't saying,
although they acknowledged the mistake and say they are
trying to unwind the transaction. According to a published
report in Florida's Sun Sentinel, one Florida attorney said,
"The evidence doesn't matter, the proof doesn't matter, due
process doesn't matter. The only thing that maters is that
they get rid of these cases."
This story and many others has some banks temporarily
suspending foreclosures until paperwork can be scrutinized.
The Florida Attorney General is investigating Grodensky's
In another Florida foreclosure case, this time in Palm Beach
involving lender GMAC, one banking official admitted signing
as many as 10,000 foreclosure documents in a month and
without proper review.
The State of Florida is not alone in its inquiry.
Connecticut, California and Ohio have also stepped in after
concerns about improper foreclosures in their states. The
U.S. Treasury Department and the Office of the Comptroller
of Currency are also investigating shoddy foreclosure
Last week Bank of America agreed to delay foreclosures until
it could investigate whether bank officials failed to
properly follow foreclosure procedures. Bank of America's
action comes on the heels of an admission from an official
there that she signed 8,000 foreclosure documents per month
without proper review.
How bad is the problem? No one knows, although the National
Consumer Law Center believes the problem is widespread.
Unfortunately, those who are losing their homes to
foreclosure are already cash strapped. Hiring competent
counsel is difficult for people who can't even afford the
roof over their heads.
About the Author:
Brian Mahany is a partner at the Milwaukee law firm of Mahany
& Ertl, LLC. He concentrates in fraud and asset recovery
cases. Brian blogs on a number of finance related topics and
welcomes feedback. Contact Brian through his website at
http://www.mahanyertl.com or directly at (414) 704-6731