False foreclosures: More great news for homeowners
According to most insiders who are willing to share their opinion, home foreclosures have been handled in a sloppy, haphazard fashion by banks. Mortgage loan modifications have been assured, yet many of the same homeowners who received such promises have been foreclosed upon. According to the New York Times, a new thorn has emerged: false foreclosures. People who are completely up-to-date on their mortgage payments are discovering their homes have been looted by banks and contractors who have singled them out by mistake.
False foreclosure: A mistake honest homeowners can’t afford
When banks repossess a home, the assumption is that the homeowner is at least 45 to 60 days late with their payment and that the property has been abandoned; it is not assumed that a false foreclosure is in progress. Yet that’s exactly what a growing number of homeowners have faced. After going away for a brief period, they return to a home with changed locks that is bereft of possessions.
This happened without forewarning from Ash’s bank, and it is not unique. Banks foreclose on properties that are sufficiently behind and believed to be vacated, ostensibly to protect the bank assets from vandals. And the number of lawsuits detailing banks breaking into homes is on the rise. While banks insist that false foreclosures apply to a tiny minority of cases, experts indicate that this is not a viable legal excuse for foreclosing on homeowners who have either paid for their homes in full or are completely up-to-date in their payments.
The promise of corrective action
Alan Jaffa, CEO of Safeguard Properties, a contractor that inspects and maintains foreclosed properties for banks, told the New York Times that “a handful of mistakes have been made.” Such contractors work with over a million foreclosed properties each month, and this has been used as a built-it excuse. Financial institutions like Bank of America and JP Morgan Chase claim that if contractors are indeed performing false foreclosures, the banks will take corrective action. However, the same banks also promised loan modifications which were not eventually fulfilled, so consumers would be well-advised not to hold their breath – and keep their lawyer on speed dial, if they can afford a lawyer.