So what does it look like when the foreclosure fraud machine rolls over homeowners who aren’t even in default?
Remember we’ve been told by folks like Jamie Dimon and The Wall Street Journal editorial board that such unthinkable things aren’t happening. But thanks to some good on-the-ground reporting from the press, we know of several instances already.
Not to minimize the reporting involved here, believe me, but this stuff doesn’t appear too hard to find.
The Cleveland Plain Dealer’s Teresa Dixon Murray and Michelle Jarboe have one of the best stories I’ve seen. They’ve got three different egregious cases:
Michael and Pamella Negrea have never been late on a mortgage payment in the 15 years they’ve owned their home in Eastlake. But they’ve been foreclosed on three times.
Martin and Kirsten Davis, meanwhile, lost their home in Cleveland to foreclosure two years ago. The reason: a mess that started when they accidentally paid 14 cents too little on their monthly payment.
And Michael Rendes of Berea had his mortgage sold last year to Bank of America. The bank foreclosed on him in November, after insisting for months that it didn’t hold his loan and wouldn’t accept his payments.
Among those whose foreclosure is in limbo for the moment are Michael and Carol Rendes, both 49, who bought their 1,350-square-foot home in Berea in January 2006. But the couple says the foreclosure isn’t even justified.
Their loan originally was with subprime lender Argent Mortgage, then LaSalle Bank, then Wilkshire Financial. The loan was sold to Bank of America in September 2009, although the couple said they weren’t initially notified. They made their September and October payments to Wilkshire.
“I had no clue. I just made my payment,” Michael Rendes said. “I knew I had a mortgage.” Wilkshire then told him the loan had been sold. He called Bank of America many times, but bank employees couldn’t find the couple in the system. They tried using names, Social Security numbers, the parcel number, dates of birth, everything.
The Plain Dealer goes a little overboard here:
Now, it’s possible that thousands or even millions could have lost their homes in error.
Yes, anything’s possible, and we have to find out how many it has happened to. But we just don’t know the scope yet, and it’s better not to speculate on it like that until we have some idea.
The paper shows how to get at this better in an accompanying story on the couple who got foreclosed on three times despite never missing a payment:
“I can’t image how many people lost their houses who didn’t deserve it,” Michael Negrea said.
The couple is drained from years of back and forth with GMAC.
“I think a lot of people would have just given up,” said Pamella Negrea, a graphic designer. “Nobody believes us. People think, ‘A bank wouldn’t file for foreclosure if the bank wasn’t right.’ “
Meantime, the Miami Herald has a good story on a woman who owns her house free and clear but is being foreclosed on because her ex-husband, who hadn’t lived there in a decade, and is blind and illiterate, took out a fradulent note on the house with the help of a crooked appraiser. Now Deutsche Bank wants to push her out, even though the place is a teardown deemed “unlivable” by Habitat for Humanity. Why?
The house is indeed a wreck, but because it has a Fannie Mae-backed mortgage, the bank could simply carry out foreclosure proceedings, and then put in a claim to recoup the $102,000 owed on it. Because Fannie Mae was taken over by the federal government in 2008, taxpayers would ultimately pick up the tab.
The Herald’s’s Toluse Olorunnipa is good to point out that this was an Argent loan:
Argent, at one point the nation’s largest lender to people with low credit scores, crumbled under the weight of the subprime lending crisis and was sold to Citibank in 2007. A previous Miami Herald review of Argent mortgages found widespread evidence of mortgage fraud, with one-third of Argent loans in Miami-Dade County eventually falling into foreclosure.
And the paper ties it in to the more recent foreclosure scandal:
As Deutsche Bank motions for a summary judgment in the case, it suffers from many of the same problems that have led to stalled foreclosures across the country.
After acquiring the loan from the original lender, the bank’s representatives profess little knowledge about the details of the home loan, and its lawyers have not been able to close the case for four years.