Homeowners across the US were affected by foreclosure fraud in recent years. This foreclosure fraud may have involved faulty documents and/or procedures, which resulted in homeowners wrongfully losing their homes. Officials in numerous states are now investigating allegations of improper foreclosures against banks and, in some cases, other third parties. Meanwhile, homeowners have also filed foreclosure lawsuits, alleging banks used an unethical foreclosure process to force them out of their homes.
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During difficult economic times, some homeowners have difficulty making payments on their mortgage. The majority of these people are hard-working, honest people, who expect that if they are subject to foreclosure on their property, the company doing the foreclosing will also be honest and ethical and ensure the homeowners' rights are protected. Allegations have been raised against various banks and trustees that foreclosure laws have been broken and illegal procedures used to hasten the foreclosure process and push more people into foreclosure than should have been.
Some states require a judicial review of foreclosures, which means that a court filing must be completed before the foreclosure goes through. Some states, however, do not require a judicial review. Instead, foreclosure is done via public auction, which is overseen by a trustee. That trustee is supposed to act as a neutral third party in handling foreclosures. In both situations, allegations have been raised that companies (including banks and trustees) have used illegal means to foreclose on properties, forcing people out of their homes.
Among allegations about illegal bank foreclosures are that many companies involved in foreclosure are guilty of:
Providing inaccurate foreclosure documents
Providing faulty chains of title
Confusing information about how the borrower has defaulted
Confusing information about how to fix the default
Foreclosing in private rather than in public
Failing to get proper signatures on foreclosure documents
Failing to have foreclosure documents properly notarized
Conflict of interest
Failure to inform consumers of their legal rights
In states that do not require a judicial review of foreclosures, some trustees are accused of posing as corporate bank officers and illegally signing documents.
According to the Servicemembers' Civil Relief Act (SCRA), even in states that do not require judicial review of a foreclosure, a judge is required to authorize foreclosures on homes of military members. That authorization can only be given after a hearing at which military members are properly represented. The SCRA is in place to protect active military members, some of who might be on lock down and unable to communicate with outsiders or make mortgage payments. In some cases, service members have allegedly returned from active duty with no knowledge or warning that their home was foreclosed on.
Lawsuits have been filed against a variety of banks including JPMorgan Chase, Deutsche Bank and CitiMortgage, alleging the financial firms illegally foreclosed on the homes of active service members by not obtaining a court approval of the foreclosure. In 2011, JPMorgan Chase was ordered to pay $56 million to troops and told to change its procedures regarding its treatment of military personnel.
Illegal Foreclosure Lawsuit
Foreclosure lawsuits have been filed in multiple states, alleging banks and third parties acted illegally when foreclosing on homes. In 2010, Bank of America suspended foreclosures across the US after officials alleged many foreclosures were based on faulty documents and potentially illegal procedures.
In response to complaints about illegal foreclosures, Nevada has become the first state to make illegal foreclosure a felony. Bankers involved in illegal foreclosure may be sent to jail and face fines if they are found guilty of fraud.
In 2010, a California woman became the first person in that state to win her home back from a lender after it was foreclosed. The 73-year-old filed a lawsuit against Washington Mutual alleging wrongful foreclosure. The homeowner alleged that after she asked her lender to lower her monthly payments, she was told she would be sent a loan modification package. Instead, a real estate broker was sent to tell her the home had been foreclosed. A judge ruled in favor of the homeowner, finding that Washington Mutual acted improperly in foreclosing on the home.
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Newport Beach, CA The US home foreclosure crisis and the practice of bundling mortgage debt into securitized bonds seems to be a never-ending source of problems. Now, a consumer fraud class-action suit, filed in US District Court, claims that JPMorgan Chase routinely uses fake documents to misrepresent itself as having standing in bankruptcy cases. Rather than bare the cost of proving the chain of ownership, Chase simply manufactures documents. "We've been able to track the JPMorgan cases from Santa Barbara, down to Orange County, Riverside and Los Angeles," says attorney Joe Roberts, "and you see the same nonsense documents being filed, and you see the judges biting on it, and you see the attorneys lying down and letting JPMorgan assert itself. [READ MORE]
Boston, MA State officials from Massachusetts have targeted the nation's five largest mortgage servicers with foreclosure lawsuits for allegedly pursuing illegal practices and misleading troubled borrowers, according to the Los Angeles Times[READ MORE]
I was wrongfully foreclosed on by US BANK trust na as trustee for lsf8. I had owned my home for 20 years and never heard of them being anything to me or my property until caliber loans and their shady attorneys started filling forged documents to try to make trustee sale look valid. Then Aldridge Pite Llp, before said shady "attorneys" completed an eviction on me without ever serving me or any type of notification until 2 days before thanksgiving staying I would be removed by sheriff in 5 days!! Us bank bought back from itself, which it still has not provide proof had any right to note or deed, and had no contact with me, not even paperwork when sale occurred fraudulently, only a real estate broker that kept trying to luck me out of my home by sitting in fRont of house for months.... after the sheriff remove me they (Kim Smith Windermere stellar real estate) changed locks while I was trying to get judge to stay default judgment for intentionally filing misleading and manufactured docs to get judgement, but the same judge denied the stay. Am fighting in coa for months, but the real estate agent would not even let me get my personal property,what was left of it after his was robbed of all electronics and jewelry, collectibles etc within two weeks of them kicking me out. They would not even clothes or pictures, and police say "it's a civil matter" and will not do anything about all this bs, but when the real estate agent called them the Vancouver police showed up to arrest me, pregnant, for "trespassing" when appeals process filed and I had right to property. The police state is civil matter but won't tell me not going to arrest me again even though they admit is not their jurisdiction or call!! I ne help to perfect the litigation, I lost everything I have ever owned to these thieves, they are making a joke out of the legal system, is their own little playground and none will stop them!!
Posted by Margaret L Kussman
2010 I moved out from my cheating husband. We had (still have) a Mortgage Loan with Wells Fargo. My ex-husband died 2014 and I agreed to be taken off the deed with the understanding that my ex would refinance so I could walk away from the mortgage loan. My ex never refinanced. Wells Fargo refused me a Mortgage Release with no explanation. I filled bankruptcy in 2014 with no choice, or help from WF. I continue to receive WF statements each month 2010-2016 for the balance, even after filing bankruptcy. WF has offered me a Short Sale or pay $1,200.00 for the next 3 months and I can re-establish this mortgage. Well how can I do any of these offers from WF when I am not on the DEED? Please inform me what I can do to have WF stop harassing me with their offers and statements. I thought once I filed bankruptcy and it was filed 2015, that they were not to bother me any more. The property (condominium) is still empty and has a combination lock on the door for the past 4 years. All I want is them to leave me alone OR give me a Mortgage Release as I am not on the DEED. Does anyone at WF know what they have been doing with my case for the past 4 years? Fed up.
Posted by Terri
Making this a condensed version.Original mortgage date was year 1998. Husband lost job, we continued making our monthly payment. Got behind on loan payment by two almost three months. Worked out catch up payment with mortgage co.(Equicredit) Sent payment Western Union on time as required by Equicredit, But at this time payments were sent to SPS- (Select Portfolio Servicing). One week later I received notice they refused my Western Union payment. I was now in default. I talked to an attorney, he stated there was nothing I could do. Lender was within their rights. Perplexed, I called SPS and asked why couldn't do a forebearance. They refused anything but short sale offer or return of keys. I didn't buy my home from them. I already lived in this home since 1979. I owned it outright. I thought I was getting home improvement loan on equity in home. I filed bankruptcy to save home. Made payments through court trustee for the required four years. I did not receive a paycheck for those four years. Flash forward to the modification debacle. I believe we attempted mods up to three different times. We had to come up with a high first payment, like a down payment. Then following payments were higher then original monthly payments. SPS said our payments would be lower and at the end of 3 mo. trial period our loan would be reinstated at lower interest rate. Our interest rate was 9.75, it never went lower.Our loan never got reinstated because SPS denied our mod every single time because of "lost paperwork" SPS always said "we" didn't have required paperwork done right or on time. Every payment was sent Western Union. Numerous copies of all paperwork and documents were sent more then once. SPS only gave a window of 4 or 5 days to get it sent. The cost to fax or send certified paperwork every other week or month was getting ridiculous, when SPS already had all the required documents. The date on original foreclosure is year 2004. My last payment shown on SPS mortgage statement shows year 2009. SPS is mortgage servicer for Equicredit. I believe Equicredit is no longer in the business of home loans. I would also like to know about statute of limitations for foreclosure
Posted by David Stauss
Does the SCRA protect service members who are non-obligors (e.g. an heir of property encumbered by a deed of trust/mortgage imposed by the decedent) against a non-judicial foreclosure on their property? SRCA Section 533 seems to only protect service members who are "obligated" on the deed of trust/mortgage. In the example above, the service member has an "interest" in the property being foreclosed, but since they are not an obligor under the note or mortgage, they receive no notice of the non-judicial foreclosure being enforced against their property. Any solutions to this quandary?
Posted by Peggy Carlisle
I lost my home in February of 2014. I got hurt on the job, so I did fall behind. They sent me a modification package, but they kept postponing it! I was actually only 3 months behind, but by the time they say they put everything together. I was owing HUD 25,000 dollars. So how the MOD works is you pay off your total loan and then HUD comes looking for that 25,000 dollars. If you don't have it. You pay 300,000 for your home and then they take it from your or your heir's for a mere 25,000. So when it all went down I was on pain medications and I didn't quite understand it. When I found out their little trick, I stopped paying and started investigating. My home was Foreclosed on by Midland Mortgage who didn't even own my home. I called Lending Tree! They said they didn't own it, then sold it to Midland Mortgage 6 days after foreclosed was signed and issued. They sold my house for 20,000 less than I owed, but I got no bill. Which tells me something really wasn't right. I might add when I was with Citi, not one late payment as soon as Midland took over I started having problems.
Posted by judge joe jr
lhave been wrongfully foreclosed on and the trustee U S BANK N A bought the property and yesterday 10/20/2015, my home was broken into by their Realtor and scatter all my property and they put a lock on my property l have no way to get into my property . were did i go wrong were is the justice in America .aim just a number there is no help for home owner or for the poor the mothers the children involve family broken apart there is no justice in this country fraud upon fraud right in the court the judges and the banks infarct your vary own attorney will gang up against you because they are been bribe not to help,they know the truth but they chose to support the fraud this is sad
Posted by Michigan
I am disabled. I have multiple sclerosis since 1984. My home is in foreclosure. I have been trying to work with PNC Bank with their making home affordable program. I filled out the packet, then they needed more documents so I sent them. I was told they had everything they needed. Then I was told they didn't. Then I was told to resubmit the packet by 12/31/2014 and did so on 12/29/2014, so that there was time for them to review it before the foreclosure sell date. Now they tell me that there is not enough time to review it. It got to the point where I started recording the calls and have proof of this. I am roughly $5,000 behind with the legal fees they added.
Posted by Anonymous
My loan was originated in 2002, the Lender was Long Beach Mortgage Company-Washington Mutual Bank F.A. was the servicer. I defaulted on my loan in 2004, took a chapter 13 Bankruptcy, while in Bankruptcy, a motion for relief from stay was presented twice, once in July 2004 by Long Beach c/o Washington Mutual Bank claiming to be a secured creditor; And the other in September 2004 stated Washington Mutual F.A, as the secured creditor. I completed the bankruptcy in September 2006. In January of 2007, I received a statement from Washington Mutual Home Loan that a past due amount was due and owning in the amount of $9,864.80, when I called them concerning this, I was told that they had not received any payments from the Bankruptcy Court Trustee.(They had, and I have a copy of the payments remitted)....fast forward, In October of 2008, I received a statement which showed an
overage in the escrow account (on a 528.00 dollar loan I had been paying , 600.00 and 700.00 ) when I contacted them about the overage, and I wanted it returned to me since it was not applied to the loan, I was told that this could not be done, as I was in foreclosure. And a foreclosure complaint was filed December 2, 2008, not by JPMorgan Chase as successor but by U.S. Bank, N.A. as Trustee..HE3 series 2002. the holder and owner of the promissory note, (where did they come from- no mention of U.S. Bank, N.A. as Trustee while in Bankruptcy- and I believe the if the documents had included a blank endorsement, My Attorny at the time or the Trustee in Bankruptcy case would have questioned it) the alleged default date February 1,2007 ( I have proof of payment and IRS statements from them (Wamu and Chase) for the years 2007 and 2008 which shows amount of interest paid for those years), there was no assignment or endorsement in blank attached to this claim. The claim was dismissed twice. Then In April 2012, U.S. bank as trustee files another claim, this time it says "entitled to enforce the note" not holder and owner, and to this claim is attached an assignment from JPMORGAN CHASE to U.S Bank. N.A. as Trustee, dated December 4, 2008 and an endorsement in blank, which is not dated. No change in the default date or the default amount
I am still fighting this foreclosure and it is November, 2014
Posted by Arkansas
Home foreclosed on while loan modification being reviewed.