Report: Lenders wrongfully foreclosed on over 700 service members

A review of foreclosure cases also turns up 20 homeowners who lost their home despite never missing a payment.

By Teresa at MSN Real Estate Mar 4, 2013 2:16PM

© Peter Gridley/Getty ImagesA review of thousands of foreclosure cases has found that major lenders wrongfully foreclosed on more than 700 members of the U.S. military, as well at least 20 homeowners who had never missed a payment.

 

The wrongful foreclosures were discovered in a review required by federal officials after a more comprehensive foreclosure review process was called off, DealBook reports.

 

"It’s absolutely devastating to be 7,000 miles from your home fighting for this country and get a message that your family is being evicted," Col. John S. Odom Jr., who represents military members in foreclosure cases, told DealBook. "We have been sounding the alarms that the banks are illegally evicting the very men and women who are out there fighting for this country. This is a devastating confirmation of that."

 

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A $25 billion settlement reached among the big lenders, the state attorneys general and federal regulators last year included a provision that anyone whose home had been in the foreclosure process with one of 14 lenders between 2009 and 2010 could apply to have the case reviewed. Those found to be the victims of bank misconduct would receive cash payouts.

But just weeks into the review process, which had been widely criticized, it was stopped. At the time, federal regulators said serious mistakes had been found in only 6.5% of the cases. The subsequent reviews found significantly higher rates of error, The Wall Street Journal reported. That includes the 700 members of the military who were the victim of improper foreclosures.

The Servicemembers Civil Relief Act bars lenders from foreclosing without a court order on "active-duty military personnel who had a mortgage obligation prior to enlistment or prior to being ordered to active duty."

 

Three lenders – Bank of America, Saxon Mortgage Services and JPMorgan Chase – have previously agreed to compensate about 200 members of the military who were the victims of improper foreclosures, in addition to paying about 6,000 who were overcharged on their mortgages.

The articles in DealBook and The Wall Street Journal were based on reports from insiders who had seen the data, and we don’t know yet what else regulators found. We may never know. That has been one criticism of the decision to halt the reviews, that the public will never know what the scope of lender error was in the foreclosure crisis.

 
170Comments
Mar 12, 2013 8:45PM
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armed insurection might work.voteing dosent.
Mar 12, 2013 4:51PM
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If I could write a check like these companys do I could get them to halt a review too
Mar 12, 2013 1:48PM
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criminal prosecution, and restitution needed here and now.

Mar 12, 2013 12:09PM
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To MN360 - Certainly there are honest mortgage brokers however there are the Bernie Madoff's of these groups, as well, thus my isolation of a particular owner/entity.

 

Your defense of your family is understandable however they are, sadly, in the minority. 

Mar 12, 2013 7:21AM
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Remember when..............
the word 'corporate wasn't as dirty word?
when bankers were among the most stable and trusted members of our society?
when the common guy felt he would get a fair shake out of the system he lives in?
Just how did this phase shift happen?

And to express it more colloquially,  'who let the dogs out?'.............or IN.


Mar 12, 2013 5:23AM
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This is totally shameful.  One of the worst parts is that Bank of America is always at the top of the list of offending banks !  How anyone can bring themselves to stay with BofA I'll never know. Then to have the investigation called off after finding this out ?  BofA and the investigators must be buddies !
Mar 11, 2013 12:11PM
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Smartest thing I ever did was dumping BofA and going to a Credit Union.  No B/S there and it is a lot better than any bank whether it be Bank of  America or who ever.  Get out of the Banks and go to a credit union.

Mar 11, 2013 12:03PM
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IT IS AMERICA GROVEED AND CORPORATE THEFT... THOSE BANKS GOT ALL THE MONEY FROM STUPID GOVERNMENT PROGRAM AND THEY ARE STILL ROBBING THE COMMON POOR CONSUMERS.. AFTER SIX YEARS THE GOVERNMENT STILL CANNOT FIGURE OUT HOW TO CLEAR THE MESS.. IT WILL NEVER HAPPENED IN CHINA AS THEY ALWAYS HANG THEM AND GET RID OF SUCH ROBBERS... 

HERE LOOKS LIKE...GOVERNMENT IS SLEEPING AND DOGS ARE EATING.. IMAGINE HOW MANY POOR FAMILIES THEY DESTROYED... BANKS , CORPORATION AND PARTICULARLY GOVERNMENT IS TO BE BLAMED ... WE SHOULD GET RID OF ALL THOSE AND BRING STRICT LAW OF ARMY ...AND PUT ALL THE GREEDY IN JAIL..

Mar 11, 2013 11:26AM
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I just wonder how many lives this absurd and criminal action on the part of the banks have cost.  Distractions like this can be fatal for servicemen who are serving in combat areas. Their focus needs to be on surviving not on fighting battles that should not ever should have been started in the first place.  How many marriages have these monsters destroyed through the havoc they have wrought in the lives of their victims?  The extent of the damage goes beyond imagining, so should the punishment.
Mar 11, 2013 11:17AM
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Once we sell our VA guaranteed loan home thats it we won't deal with the bank again. Getting the underwriters to approve this VA loan was a nightmare. Someone has got to wake the hell up and do the job their getting paid for or hit the street. Enough said!!! 
Mar 11, 2013 11:13AM
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The new  capitalism and new corporate "democracy" victimize everyone.  Of course, with a supreme court that does not hesitate to express an unfair bias toward their corporate benefactors and supporters, while protecting their personal stock portfolios, little else can be expected.  With legislative and executive branches that bail out the banks after conspicuously bad decisions and criminal actions, there is little to prevent this type of behavior from continuing to happen.

The "home of the brave and land of the free" is now the home of corruptioin and land of the corporation.

Mar 11, 2013 11:12AM
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Rush Hater, Like the way you think. Or get them in the wallet somehow. That always gets their attention.
Mar 11, 2013 11:04AM
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Has there been any foreclosure issues with mortgages through credit unions? I don't use banks, don't trust them.

I see Wells Fargo and Chase mentioned, what about Citigroup? Horrible customer service and they have sold a lot of their mortgages to their smaller subsidiaries...Citifinancial should be investigated because I'm sure there is some shady dealings in their files too!

Mar 11, 2013 11:03AM
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Our Congress is corrupt sitting on their rumps and collecting wages and benefits for doing nothing. Our big company CEO's are corrupt sitting on their rumps and collecting big wages and benefits and claiming their employees cost them to much money and running their companies in a hole. Our bankers are corrupt thinking of more ways to drain money out of our pockets and then we, "the American average citizen", and not Mr. Eastwood, are told we need to hire lawyers to protect us and fight these thieves when we have been drained of all our funds when they have high price attorneys and drag you for years into courts.
Mar 11, 2013 10:45AM
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I am a housing counselor and this is nothing new.  I had a client who was on active duty and had a foreclosure suit filed against her.  We provided change of duty station orders 6 times and still could not get the lender to acknowledge she was in the military.  When they finally did admit she was in the military, they did not want to do anything because she did not reside in the house.  (They expected to comute to work in Korea every day I guess).  After 2 years, we finally got it settled where they dropped the suit but only until she is off active duty at which pioint I am sure they will start up again. During this entire process I reached out to the VA, Department of Defense, Congressman, Senators and the President.  I got exactly one reply from a Congessman thanking us for our inquiry and they would look into it.
Mar 11, 2013 10:34AM
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2 recent cases in California (Wells Fargo):

In one case the owner made all of his payments on time, prepaid insurances and taxes. WF as forclosing on a different house on the same street, typo'd the parcel number for the other property, and forclosed on the wrong house. Then, rather than admit th error and fix it, WF fought it in Court. The homeowner had a heart attack  and died at he court house.

In another case, WF typo'd and forclosed on a house that didn't even have a mortgage (the house was paid off already), much less one wth Wells Fargo.

To Big To Fail? More like To Big To Be Allowed To Exist.

 

Mar 11, 2013 10:23AM
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It's got to the point you can't trust nobody but  yourself and then you have to follow up with everything to make sure it's all up to par and your not getting shafted by everyone and everything .If I won the lottery I would keep all the money in a safe in my house because they charge for   every nickel and dime anymore and the hell with marriage everyone's out for them selves.   WELCOME TO THE FUTURE!
Mar 11, 2013 10:17AM
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Perhaps it's time to find a mortgage banker and make an example out of them.  If they're found beaten to a bloody pulp with a sign saying "this is what happens to crooked bankers," maybe they'd start to behave themselves.  Fear is a powerful motivator.
Mar 11, 2013 10:17AM
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Who signed off on these,  they need to be taken to task.  You should not sign off on stuff that may be wrong.   there is a signature some place of the foreclosure documents,  draw and quarter them
Mar 11, 2013 10:13AM
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GMAC, Homecomings Financial, Deutsche Bank all have demons at their helm and trained their representatives, agents and affiliates to lie and cheat in order to place horrific loan structures purposely and with intent.  The aligned mortgage brokers (i.e. John Somers of Adventure Mortgage) were also 'equipped' by these lenders to perpetrate unspeakable crimes against the American consumer.  In the aftermath 'bully' law firms were hired to carry out the end result that these lenders intended (i.e. Sirote Permutt).

 

When will all these entities be held accountable for the pain, struggle and grief they have caused? 

 

  

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