from the merry-christmas dept
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.