BofA Tries To Foreclose On Home Despite Not A Single Missed Payment

from the merry-christmas dept

Perhaps rather than worrying so much about Wikileaks, or buying up hundreds of domain names involving various combinations of their top executives along with “sucks” or “blows,” Bank of America should get its actual banking house in order. Consumerist has the story of how Bank of America tried to foreclose on a couple’s home despite the fact that they’d never missed a payment (and the foreclosure was targeted for Christmas Eve, no less). The CT Watchdog site has all the ridiculous details, which get more and more ridiculous as you read through them.

The short(ish) version is this: the couple applied to refinance their home mortgage, as many people have done recently thanks to low mortgage rates. The plan was to use the refi to pay for some home improvements and to consolidate their debt by paying off whatever other debt they had. They asked the BofA rep they were working with for “the cheapest option,” and the BofA rep simply put them into a program used for loan modifications — specially developed for people who are behind on their mortgages, even though this couple was not. When they received the paperwork for this, they decided not to go with this program, because it had additional escrow costs and home insurance payments they didn’t want — so they instead decided they wanted a conventional mortgage.

What they didn’t realize, was that as soon as the BofA rep put them into that particular “Making Home Affordable program,” (even without the couple signing the documents) BofA immediately sent out a notification (without telling the couple) to the credit bureaus indicating that the couple wanted a loan modification due to financial difficulties. Almost immediately, all of their creditors freaked out: they dropped their credit limit on credit cards, had other creditors close their account, and had other debt automatically shifted to the highest possible interest rate category. Of course, this also killed any possibility of doing the refi, since their credit score no longer would allow a refi.

After many, many complaints to BofA, the bank apologized (in writing) and promised to remove the couple from being listed in the program and correct the credit report, but the couple was on their own in getting others to know about it. Except this foreclosure notice came months after BofA apologized and promised to fix things (which it hasn’t fully done yet). The couple has been calling BofA to ask why and everyone they speak to notes that they’ve never missed a payment at all, but that the account is flagged as “under review.” No one can explain why the foreclosure was set in motion.

Yes, this is a situation where BofA didn’t just screw up, but after finally admitting its original error and promising to fix it, it has made an even bigger and more egregious error.

The TL:DR version: BofA screwed up and ruined a couple’s (previously fine) credit rating, destroyed their plans for a mortgage refinance, and then after apologizing and promising to fix everything, decided to foreclose on the couple’s house despite the fact that they’d never been late on a single payment.

Not surprisingly, the couple is now planning to sue BofA.

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Companies: bank of america

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Comments on “BofA Tries To Foreclose On Home Despite Not A Single Missed Payment”

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Mike42 (profile) says:

Justified litigation

Not only do they deserve to sue Bank of America, they should sue the credit companies who jacked their interest rates because of a “red flag.” A change in standing with one company should not affect all of your credit. All that does is snowball the problem, ruins the person’s life, and makes sure no one gets paid. Plainly short-sighted and exactly what caused the recession in the first place.

This is the kind of thing that requires regulation.

Anonymous Coward says:

They are coming for your home next

This is nothing new, I know personally of three separate people this is happening to right now. It is a scam perpetrated by the banks. They are quite literally openly engaging in fraud.

I read an article that said the foreclosure rate was around 70k per month and as much as 10% of those foreclosures were in error.

That means 6-7k people a month are receiving foreclosures notices when they shouldn’t. This number is astronomical and in my opinion cannot be accounted for by lack of oversight.

I have read several stories about people who have either paid off their mortgage already or don’t even bank with a particular corporation receiving foreclosure notices.

I am eagerly awaiting Wikileaks disclosures about US banking. If this fraud has been coming from management then I will consider it much more than an isolated incident. Just like a auditor would reason based upon a sampling, I think it is happening throughout the system.

pconwelll says:

credit scores

This is what bothers me with credit scores. They are too easily influenced and damn near impossible to fix. This couple will probably have to wait several years for the ‘negative’ report to run it’s time and naturally disappear from their report.

Also, +1 to what Mike42 said. Why would you jack the interest rate up for someone you think has a higher risk of paying back their debt? I understand the ‘logic’: “Well, we need to charge more to make sure we get our money back in case a certain percentage of those users default”, but I’ve got an idea. Why not NOT extend credit to those that are ‘high risk’? It’s what started the recession…

Lawrence D'Oliveiro says:

Computers Don?t Argue

Anybody remember a short story by that name from a few decades ago? Only it was supposed to be science fiction then…

Or maybe another parallel would be Terry Gilliam?s Brazil, a tale of bureaucracy gone mad, and everybody so tangled up in paperwork that nobody can fix an obvious screwup without risking severe penalties for not going through proper channels…

HrilL says:

Hope these people get a few million. F BofA

I’ve always hated BofA for a while but this just makes me hate them even more. I hope the wikileaks doc have some real evidence of fraud and that the execs get to spend lengthy prison terms. But for someone reason white collar crime always gets off easy. Look at enron. They destroyed thousands of peoples lives and only spent 10 years max. Yet you can go to jail for life for killing one person. We need laws that make the rich that screw us lose their whole lives then maybe they wouldn’t screw people over as much.

Anonymous Coward says:

Sounds like this couple should have lawyered up much sooner. I don’t mean sue, I just mean letters written by a lawyer they hired. Calls to customer service are worthless.

I don’t remember BofA having so many mortgage related problems before they bought Countrywide. Talk about toxic, Countrywide was as toxic as it gets – started and run by crooks. Seems like BofA stepped into more shit than it can wipe off at this point.

vivaelamor (profile) says:

Hope these people get a few million. F BofA

“We need laws that make the rich that screw us lose their whole lives then maybe they wouldn’t screw people over as much.”

I’d settle for simply closing all the loopholes in the current system. Punishment isn’t renowned for deterring criminals, harsher punishments may simply encourage more devious criminals.

Douglas Smith (profile) says:


If everybody did it your way it would break the system. The rich live on their capital, earnings paid by your interest. After 30 years you get back what you paid for your house minus 66%. The rich money holders get three times what you get. So you worked for them rich people for thirty years to get your house. So what do you’al think of inflation now?

microface (profile) says:

Why I NEVER talk to Bank of America Representatives

I have re-financed my house 3 times in the 15 years I have “owned” this house in each case the original Mortgage was with Bank of America. After the first time in 2001 when I was quoted a rate that required points, and was 0.5% higher than what I received through other loan brokers, I have never gone back to Bank of America for anything. In each and ever case my loan was subsequently bought by Bank of America. The last time when I went to Bank of America in 2009 when interest rates were really low, they did exactly what this couple found. But I caught what the rep was trying to do and immediately stopped the process, and asked for a supervisor. I WAS HUNG UP ON. I went to quicken loans, and refinanced through them. After 2 weeks my loan was bought by Bank of America. I loathe Bank of America, and will never do any business directly with them ever again.

Tim (profile) says:

Borrower's fault 100%

Everyone acts like Bank of America is the bad guy, but it’s 100% the homeowners fault.

Number 1: If they wanted home improvements, they should pay for it themselves like a responsible person. They were in debt already according to the article.

Number 2: They were borrowing money to do home improvements and pay off debt. Sounds like a great Ponzi scheme of taking money from one person to pay off another.

Number 3: They took out their loan from Bank of America. I’m glad they did research beforehand of who to borrow from…not.

Number 4: Oh poor babies…their credit limits are being lowered. It sounds like they shouldn’t be using credit cards to begin with. Can’t they just pay for something within their financial means for once?

The only correct thing they did was turn down the first modification program that had additional escrow costs and home insurance payments. Wow, congrats one smart financial decision out of 100.

Anonymous Coward says:

Borrower's fault 100%

1) This is how normal people do things. Borrow a bit to substantially increase the value of the home and pay it back over time. Few people have the means to do as you suggest.

2) See #1.

3) Do you research every single financial choice you make? I’d find it hard to believe.

4) Bitter much? Sounds like your own credit is probably in the crapper, so you have to wah wah about someone with good credit being ripped by someone else’s weasel moves.

Blaming the consumer for the actions of the financial institution is what is really wrong here. It’s the real reason so many people are in such deep trouble.

Tim (profile) says:

Borrower's fault 100%

1+2 This is how normal people do things? If everyone jumps off a bridge, do you do it also?

3. I do research when I spend hundreds of thousands of dollars, and make probably the biggest financial decision of my life. This is mainly the reason why so many people can’t pay back their loans cause they never read the terms.

4. My credit is actually perfect and I have no debt.

Chuck says:

Borrower's fault 100%

So basically Tim is saying that 100% of the blame is on the homeowners because a low-level customer service rep has the ability to place someone in a credit destroying program despite not having the written consent of the homeowner and the fact they do not qualify in the first place.

Having a loan from Bank of America entitles them to ruin your credit and foreclose on you, on a whim. Did I get that right?

Tim’s “I got mine, screw you all” attitude is pretty much why America will be on par with African countries in the next 20 years.

Tim (profile) says:

Borrower's fault 100%

It’s more like the borrower is the one breaking into the car (by borrowing beyond their means), and the lender is the car owner who accidentally forgot to keep the tires properly inflated, so the borrower crashes and blames the lender for the situation.

The reality is BOA made a mistake, which is inevitable with large companies, but the homeowner chose intentionally to act irresponsibility in the first place.

Tim (profile) says:

Borrower's fault 100%


BOA’s choice to foreclose was not done on a whim, but was a mistake that they are correcting.

Everything happens for a reason. This homeowner is likely deep in debt with credit cards, other creditors, and their mortgage, and now they’re complaining that a mistake is affecting their credit limits..why so they can get deeper into debt?

These people are simply taking advantage of the spotlight of true homeowners who actually were taken advantage of, and don’t live off of money that is not theirs.

Michele W. says:

BofA Screwup

This does not surprise me in the least. We had the “pleasure” of having to sell our home in a Short Sale with BofA because my husband was downsized by none other than BofA. The only job he could find was out of state so we were forced to put our house on the market right when the banking crisis hit in 2008. Long story, short the bank mishandled our file from the start, taking too long to act on offers, even All Cash offers, never returning our calls, putting us on hold for 2 hours at a time only to disconnect us when they attempted to tranfer to a different department. We finally did work out a deal, All Cash, and we made it to closing in four months, which I am sure is a record. We only got it done this fast because I stumbled upon a contact at the BofA who helped us expedite things since my husband was a former employee. After we closed we waited three months before checking my husband’s credit score and found out that the mortgage had never been closed out. His previously perfect credit score lost over 250 points. We called the Bank daily trying to find out what went wrong and after two months of this we finally found a customer service rep who told us that the reason our file was still open, and now delinquent for 6 months, was because they had no record of receiving our closing funds! Apparently this was always in the file but no one ever told us. It seems that on the day of our closing, BofA was merging their systems with Countrywide and our wire transfers “got lost” in the system, even though eveyone got paid a couple of days after the closing. But they never closed our mortgage out. I sent the bank copies of our closing documents, had our lawyer contact them repeatedly but they refused to admit they had made a mistake and kept insisting we never closed! It was insane. I finally filed a complaint with the Federal Reserve and they finally set things right and corrected our credit reports. It was completely absurd. It is obvious that they hire anyone with a pulse to manage the files. It is criminal.

Max Verde says:

I checked the C.R. for myself and wife and found we still had long paid -up debts listed with bank holding companies that had ceased to exist years ago because of the numerous mergers. No one could figure out how to remove these ,but I was told “they don’t matter” I’m not so sure. I fear big government ,but in the end it matters not who oppresses you-“Free Enterprise” is just as bad when it becomes a golem.

btr1701 (profile) says:

kinda reminds me of this

Apparently Bank of America has lost its collective mind and gone rogue.

I’m not sure what I’d do if I owned my home, never had a mortgage, and a rep from some bank I have absolutely no relationship with showed up and started trying to to jack with my house. An instance of deadly force might occur, or at least the threat of it. Some of my firearms would definitely be brandished.

btr1701 (profile) says:

credit is bad...

> I have managed to own both our cars, and our home without ever
> having used credit in my life.It hasn’t been easy by any means,
> but I own what I own, and owe nothing to anyone.

Apparently even owning your home outright with no mortgage or even any relationship at all with a bank is no guarantee that something like this won’t happen to you.

This person owned their house outright, and had never even banked with BofA, but that didn’t stop them from showing up, starting a foreclosure proceeding, kicking out their tenants, cleaning out the house and bolting the doors.

I don’t work in the mortgage banking business, but I have to question how a bank can even start foreclosing on a property they don’t own and for which there is no mortgage.

I mean, isn’t this a legal process? Don’t the courts require a bank to show some kind of proof that they hold the note on a property and that the note is in default? Can a bank really have its employees just walk down the street and foreclose on any property they want on a whim and have the process proceed to the point where the people living in the homes can be kicked out have their lives turned upside down before someone (a judge, a regulator, whoever) calls them on it?

Ronald Riley (user link) says:

Stay Away From Bank of America

I think that BoA is systematically cheating the public. I do not believe that these things are just bureaucratic mistakes.

I run several businesses and used MBNA charge cards to consolidate transactions for each business. have always paid each cad in full monthly.

MBNA was taken over by Bank of America. I started getting late charges and interest and after investigating the problem discovered that statements were arriving 8-10 days after the closing date (grace of 20 days). I think that BoA raised (or is it stole) a great deal of money this way so I stopped using their charge cards.

I also think that the banking crisis has led to a staggering transfer of assets from public to those who are wealthy. Nothing has changed in the banking industry, we still ave a bunch of unethical crooks running things and they seem to pretty much own both political parties.

Priss says:

Borrower's fault 100%

While I do agree that the homeowners are somewhat irresponsible in the way they were handling their personal business, it is most certainly not 100% their fault.

Sending someone into foreclosure when they haven’t even made a payment on their home late, let alone missed any, is WRONG and should be corrected IMMEDIATELY.

They shouldn’t even have to set foot in a courthouse for hearings, and BofA shouldn’t be tying up the legal system with the filings. More so, any costs incurred for that faulty legal move should fall SOLELY on the company, since they don’t seem to have a clear, human review of records.

Plain and simple, a bank chain CAN be too big.

Debt consolidation loans are generally the first step toward getting oneself out of debt because the previous generation didn’t teach us that it’s okay to live without STUFF. We learn too late, but that doesn’t make the move wrong. A single bill with a single rate, payments all going to a single creditor, is probably the most responsible move a couple can make to correct what they did wrong.

And seeing as how there are scads of massively clear options (not) for home loans and a screaming society that says you’re a loser if you don’t buy something out of your grasp, I’d say just about the entire populace ends up sharing a bit of the fault burden. You know, if we’re really going to pick this thing apart.

Ellis Goldberg says:

Foreclosing Banks Neglect Property ? cost lives

Foreclosing Banks Neglect Property ? cost lives

It did not have to happen.
The December 29, 2010 fire in Oakland took the lives of a young mother and her two children leaving a seven year old. The NY bank property owner failed to install smoke alarms in the Oakland apartments which the bank owned since 2007. Many banks are foreclosing on properties where people live and are failing to take the responsibilities that property ownership requires.

Banks foreclosing on condominiums frequently stop paying real estate taxes and home owners association (HOA) fees causing the remaining homeowners to make-up the shortfall. The HOA usually puts a lien on the condo to recover the arrears HOA fees, which may be paid only after back taxes.

The bank then tells the HOA it has a buyer who won?t cover the arrears HOA fees. The bank makes the HOA a take it or leave it offer. If the HOA leaves the offer then the remaining owners will continue to cover the shortfall.

Banks frequently do not keep up foreclosed properties nor do they assure the properties are safe and secure so they don?t turn into crack houses or catch on fire, like the one in Oakland.

Legislation that reverses this situation with teeth that penalizes banks for violations would make the banks want to negotiate as an alternative to foreclosure. The legislation should state:

? Banks that foreclose must continue to pay HOA membership fees and real estate taxes – on time.
? Foreclosed property must be kept safe and maintained so as not to drive down near by property values.
? Foreclosed property must be safe and secure to assure that it is not vandalized or used for illegal purposes.

The benefits of legislation that supports these concepts include:

? Improving public safety and health of those occupying foreclosed property and those near by.
? Protecting home owners who had no role in the foreclosure from rising HOA fees and decreasing property value due to neglected near by properties.
? Making the decision to foreclose more painful for the banks;
o Reducing the number of foreclosures
o Increasing the number of re-negotiated mortgages

A property owner has a responsibility to make the property safe, clean and up to pertaining codes.
The owner can face criminal penalties when neglecting those responsibilities results in damages.
Frequently banks shirk those responsibilities.
In Oakland it resulted in fatalities.

Contact your elected officials while the memory of this tragedy is still fresh in the mind. Pass this on.

Anonymous Infuriated says:

BofA are simply crooks

We are in a situation also where our loan was bought by Coubtrywide and then ended up with BofA. We have not missed any payments and have no outstanding debt besides a few small medical bills and a car. We built our house ourselves and plan to live in it until we die. All of a sudden they started calling saying we were 3 months behind on our mortgage. Funny since our payments are auto paid from our BofA account. We tried talking to them to figure out the problem but they said there was nothing they could do. We continued to make our payments only to have them returned. We saved all the return payments and were trying to come up with 3 more when, without ANY notification someone comes to my house with papers saying we were foreclosed on and Fannie Mae now owned our property. And that we needed to vacate our home. We immediately called BofA and have sent our bank statement showing all of our payments and explaining the situation. They said that Fannie Mae had bought our property but that BofA had turned around and bought it right back. So we are in the process of getting them to fix their mistake and show them that if necessary we can pay two payments a month in addition to the payments they returned that we held onto. We sent it all in today and have heard nothing else. If they haven’t returned or taken our calls by tomorrow then we will have no choice but to involve a lawyer. Needless to say this means no Christmas for our four daughters this year. Thanks for nothing BofA.

Marilyn Allen says:


i think before people judge people because of circumstances regarding foreclosure is very hurtful. First of all, there is a process if you are behind on your mortgage, let it happen. When it is all said and done, don’t just let the bank take your property, rather you made payments or not. Don’t let people from this site make you feel worthless. When you hold a mortgage you have certain rights. As to the 100%’s comments, dont be fooled by her opinion. So what if you if your finances and credit is fine. Don’t belittle anyone else. Procedures are put in place to protect your home and it is none of your business. You need to worry about the rich taking the country and not the medium income or the poor.

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