For all the homeowners out there who have struggled to make their mortgage payments and received no flexibility from the bank, this story will go down as a karma play. One Florida couple was served papers for defaulting on their mortgage. Interestingly enough, they had no mortgage on the property. The couple, Warren and Maureen Nyerger, paid cash and never had a mortgage on their home. That didn’t stop Bank of America from continuing the foreclosure process despite the fact the couple brought in documents to prove they owed nothing on the property. The bank should have had the trust deed if they in fact used the property to back a debt obligation. Apparently the branch didn’t bother to check.
Considering banks have been in hot water for sloppy paperwork, this isn’t that surprising. Banks utilized robo-signers (people who know little to nothing about real estate or collateralized loans) to sign mortgage arrears and foreclosure notices, which of course, end up removing folks from their homes. In at least one county in North Carolina, banks have moved to using electronic signatures to keep signing off on key documents in bulk. That is, the bank scans a “verified” electronic signature and stamps it on thousands of documents.
The Nyergers’ defense attorney Todd Allen brought two Sheriff’s deputies and movers to the bank and foreclosed on it. Allen instructed them to begin removing “collateral” from the branch including desks, computers, copiers, filing cabinets and any cash in the teller’s drawers.
This scene led to the group being locked out of the bank for an hour before the bank manager came out and handed the attorney a check for the legal fees.
Said Allen to CBS, “They’ve ignored our calls, ignored our letters, legally this is the next step to get my clients compensated. As a foreclosure defense attorney this is sweet justice.”
What can be learned from this incident? Banks need to do a better job servicing mortgages and facilitating the signing of important documents. On another note, they would be wise to start working with homeowners who are behind on their payments while the beleaguered housing market works through many months of shadow inventory.
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