With the holidays upon us, I’m reminded the banks can still be the Grinch that Stole Christmas as we receive numerous calls from homeowners who have foreclosure and eviction hearings the days immediately before and after Christmas.
During Christmas, Bank of America wrongfully foreclosed on Shock and Lisa Baitch’s West Hartford, Connecticut home. Shock and Lisa had never missed a mortgage payment, and they had never been late on their payment either. Shock, a firefighter and his wife were both hardworking homeowners. They loved their home, were a part of the community, good neighbors and never over-extended themselves financially. They were an ideal couple any lender would have been happy to have.
Bank of America, told the credit bureaus the Baitches were trying to get a loan modification.
Because BoA reported this information to the credit bureaus – the Baitche’s credit scores started dropping. Then their lines of credit were either cut off or closed down due to the lower credit scores. Their lives started spiraling downward and their mortgage went into default. When the mortgage defaulted, their mortgage payment more than doubled due to the Universal Default rate.
The Universal Default rate is a term used in the financial services industry. When a borrower is late or misses a payment, the lender can change the terms of his loan. That lender will also inform other lenders that the borrower has defaulted, even though that borrower hasn’t defaulted with those other lenders.
Bank of America finally admitted they had made a mistake but the bank refused to refinance their mortgage or correct the situation they had created. The idiotic reason the bank would not refinance – the Baitch’s credit scores were too low. Mind you, we’re talking about the same credit scores that dropped due to Bank of America’s false reporting.
The couple begged the bank to reconsider. They had stacks of paperwork and documents showing where and how the bank had destroyed their credit. The bank even admitted they made a mistake. But the bank, in all its “wisdom” stood steadfast saying they couldn’t change the underwriting rules and denied their loan.
The Baitch’s hired an attorney.
The 80-cent Foreclosure
Last Christmas, Tom Mudie was finally in a loan modification after months of trying. He was so thankful to be in a mod program to help him through the tough times and allow him to keep his home. While making his second trial payment to Bank of America over the phone, he accidentally hit “0” instead of an “8” making his payment 80 cents short.
When he realized what had happened, he contacted a Bank of America customer service representative who told him to send them a check for 80 cents. He was told the check would clear up any problem. He sent the check and BoA did cash the 80-cent check. Tom thought his problem was solved.
The next month, BoA sent back an 80-cent check and his third payment.
Tom’s 80-cent error sent the bank into a frenzy. Bank of America kicked him out of the modification program for paying $615.02 instead of $615.82. BoA declared he had broken his modification contract and spit out a letter saying his foreclosure process was back in motion, even though he sent in the additional 80 cents and was told he wouldn’t have a problem. More alarming, letters of foreclosure began arriving – just in time for Christmas.
After umpteen calls, visits to the bank and pleading, Tom found out his loan was only serviced through Bank of America and owned by the government-backed Fannie Mae. More calls, visits, letters and pleading, he was allowed to begin his modification process again, and the foreclosure was ‘put on hold’.
Do banks know what the meaning of common sense is?
Okay, the computer tracks the loan and sees numbers in one way only. Couldn’t a bank representative look beyond that and try to fix the problem? The homeowner paid the entire payment minus 80 cents! Wouldn’t common sense tell you there was a mistake?
Why didn’t the customer service representative who told Tom to send the 80-cent check follow through to make sure the problem was solved? Customer Service?
Tom now pays by mail and won’t use the phone again.
This article is not intended as legal advice. The opinions of this article are solely the opinion of the author.
Keith A. Gantenbein, Jr. is a Colorado foreclosure defense attorney located in Denver and servicing all of Colorado. His foreclosure defense practice includes foreclosure prevention, foreclosure assistance, loan modifications, short sales, and all other foreclosure defense legal assistance. He also handles bankruptcies, mortgage negotiations, lender liability, real estate, civil litigation, contracts and landlord/tenant. If you think you will be facing foreclosure, or are in the foreclosure process, or have had a wrongful foreclosure, contact Keith Gantenbein at (303) 618-2122 for a one-hour consultation where he will discuss your situation and go over all your options with you.