Bank Break Ins Leading to Litigation

Even though banks piously insist that every one of their foreclosure actions is fully justified, evidence in the court system continues to prove that claim to be false. We pointed out this sorry development in October, that of banks entering and changing the locks on homes they had not foreclosed upon. Per a report from the Sarasota Herald Tribune:

The process of banks hiring people to break into homes, even when occupied, is just the latest oddity of the messy foreclosure crisis in Florida.

Some property owners are reporting the break-ins to law enforcement as burglaries. Yet investigators consider the disputes a civil matter because the contractors do not display criminal intent.

That essentially leaves the property owners without recourse…

“It is vastly underreported; it is happening in counties all across the state,” said St. Petersburg foreclosure defense attorney Matt Weidner. “The more this occurs, the more prevalent it’s going to become.”

The lack of willingness of the local police to deem destroying property and unauthorized entry as criminal acts leaves wronged parties with litigation as their only recourse. And some are filing suits.

Note that these suits likely represent only a small fraction of the actual cases of bank miscreance, since few of the victims are likely to have the financial wherewithall and intestinal fortitude to sue a bank. Per the New York Times:

When Mimi Ash arrived at her mountain chalet here for a weekend ski trip, she discovered that someone had broken into the home and changed the locks.

When she finally got into the house, it was empty. All of her possessions were gone: furniture, her son’s ski medals, winter clothes and family photos. Also missing was a wooden box, its top inscribed with the words “Together Forever,” that contained the ashes of her late husband, Robert.

The culprit, Ms. Ash soon learned, was not a burglar but her bank. According to a federal lawsuit filed in October by Ms. Ash, Bank of America had wrongfully foreclosed on her house and thrown out her belongings, without alerting Ms. Ash beforehand….

Identifying the number of homeowners who were locked out illegally is difficult. But banks and their representatives insist that situations like Ms. Ash’s represent just a tiny percentage of foreclosures.

This, as the British would say, is bollocks. The traditional procedures around the transfer of title made the old system virtually fail-safe. Any number above zero is unacceptably high. And “a tiny percentage” across the huge numbers of foreclosures happening across the US adds up to meaningful numbers in real terms.

The examples in the NY Times story are all from middle to upper income homeowners. For someone of lesser means, the consequences of wrongful action can be devastating. If possessions are removed, or worse, put out on the street, the losses can be significant.

This is the banks’ excuse:

A clause in most mortgages allows banks that service the loan to enter a home and secure it if it is in default, meaning if the mortgage payment is 45 to 60 days late, and if the house has been abandoned, authorities said.

First, some of the homes broken into have been current on payments. Second, “abandoned” seems to be interpreted as “no one at home when the contractor showed up” which would be true during the business day for most working families.

This pattern again proves what we know all two well, namely, that we have a two-tier system of law in the US: one for the banks, one for the rest of us.

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  1. attempter

    The culprit, Ms. Ash soon learned, was not a burglar but her bank.

    If I didn’t understand what the NYT is, I wouldn’t understand that sentence.

    People need to understand. The likes of the NYT are not journalists, not fellow citizens, not “misguided”, but enemies, criminals. They really don’t consider this to be burglary, since it’s banksters doing it to the people. It’s practically a racial concept by now, “elites” vs. “scum”.

  2. razzz

    Things are setting up nicely for government control. You have the recently passed gardening act (food safety), the forth coming net neutrality act and various other last minute acts being passed as law. This government not only hates its citizens but fears them as well and positions to safeguard their elite status at all costs. Events in Euroland forewarn to take necessary precaution against their own.

  3. kravitz

    Did Brian Moynihan know this story was coming out that he did the website registration beforehand? Anyway, BAC over $13.00 this morning. Push it up to knock it down.

    Another easy to understand story which was placed front lower left below fold.

    Finally, yesterday, Senator Jeff Merkeley was trying to get the republican senators who are holding up IOLTA funds to release them, and gave a good speech on why. IOLTA is a fund made up of fees from settlements. It will expire at the end of the year. The fund helps pay for Legal Aid Assistance for the poor. Including to fight foreclosure fraud.

  4. Jim Nelson

    How can anyone reading this one-sided blog with half-truths and omitting other important data i.e. (how far in arrears was the mortgage, how long since the last mortgage payment was received by the lender, etc., etc.) arrive at a truthful conclusion. Writers such as this are trying to control the minds of readers.

    Many of these foreclosures have moved in and occupied the property for three years or more and never made one payment, have not paid the taxes on the property, have literally gutted the property, etc., etc. I have seen this with my own eyes.

    Hopefully readers will observe for themselves instead of basing their conclusions on such one-sided bunk!

    1. kravitz

      You’re not in possession of the details as to why these cases haven’t been settled. Like the banks aren’t in possession of the note.

      And noted in the NYT story, Mrs. Ash was trying to get a loan modification – BofA shouldn’t have been so hasty. To the idea of ‘gutting the property,’ that’s usually what happens after the bank has illegally tossed people out.

    2. Dan_in_KC

      Jim Nelson says “..Writers such as this are trying to control the minds of readers…”

      And your vitriolic comments are not? If you were interested in informing readers – rather than trying to sway them with ad hominem attacks on the author – why not do the research yourself to determine if the ‘specific’ article in discussion is supported by facts? You could then share such information here.

      If the above is too difficult – then why not provide an actual accounting of the percentage of foreclosures that support your statement that “…Many of these foreclosures have moved in and occupied the property for three years or more and never made one payment, have not paid the taxes on the property, have literally gutted the property, etc., etc.” Please provide links that substantiate your allegation that ‘many’ foreclosures are of this type.

      I have no doubt that you can find ‘some’ examples of that nature. But bear in mind that any factual examples of banks failing to take action against people who’ve live in their homes for over 3 years without making payments tends to reflect just as poorly on the banks as it does on those staying in their home (if not more so since you (as do the rest of us) hold the banks to a higher level of competence). The point of this article is that such examples of individual mortgage-holder failures do not excuse banks from entering homes of ‘anyone’ for which the banks have not yet completed foreclosure.

      If, however, you simply want to rail against the dissemination of inconvenient facts that reveal the incompetence (speaking kindly)in the banking system then, by all means, continue as you were.

      1. Doug Terpstra

        Good points, Dan in KC, but Jim is surely a drive-by, hit-and-run troll, not given to engaging in reasonable debate.

        What’s laughable about his undocumented contrary anecdote, which may well be true, is that it’s irrelevant on its face. There is no connection or equivalency whatsoever. His example is like justifying the execution of an innocent person somewhere because he knows of a murder was committed in his neighborhood, or that our invasion of Iraq was not a crime because Americans were killed on 9/11. WTF? It is inarguable wing-nut ‘logic’.

        Hundreds, thousands, even millions of legally-“kosher” foreclosures do not in any way justify even one illegal foreclosure and certainly not the banksters’ many well-documented B&E crimes. Unfortunately, it’s only a matter of time before this results in violence, and that too will be blood on the banksters’ claws.

  5. Amy P

    I believe these stories of break ins and unlawful foreclosures represent just the tip of the iceberg. We had a very ugly experience after buying a house in the summer of 2009, with 20 percent downpayment. We were threatened with foreclosure two months after closing despite the fact that our payments were current.

    The house needed some work, and we had a family vacation scheduled right after closing, so we didn’t turn the power on until we returned two weeks later. We took our time moving in, about two weeks — so move in was completed four weeks after closing.

    A month later we got a threatening letter from the mortgage company stating that we were not in compliance with the loan (which was for the house as a primary residence) and that they intended to issue foreclosure proceedings.

    Twelve calls to the mortgage company yielded no resolution. That came only after we sent certified letters stating that we intended to report the mortgage company for predatory lending (they were trying to take our twenty percent downpayment) to all the appropriate agencies, as well as local news outlets.

    I have a lawyer in my family, so I knew this might work. I hate to think what would have happened otherwise.

    1. M Davis

      We did a refinance some years ago and told the mortgage broker that our intent was to make a downpayment on a second house, move into that and rent our current primary residence out. The purchase of the second house fell through but we went through with the refinance anyway to deal with other issues. Mortgage company slipped in a clause that we had to remain in the primary residence for two years or be in default. Since the purchase fell through, we completed the loan, and the company tried to forclose because we were not living in our primary residence. Their proof was that we had another address – a P.O. box. Deliberate set up fail…

  6. Super Cheese

    I wonder how this storyline dovetails into the storyline that “banks aren’t maintaining properties”.

    I remember reading a few months back that people were upset that banks weren’t taking care of properties in default, and that led to many local and state laws holding banks responsible for property maintenance – even on homes they bank didn’t technically own, because the home was only in default. I believe CA passed a law holding banks liable for $1,000/day in damages for unkempt homes on which they lent (even if they didn’t own it yet).

    I wonder how much of this stuff is unintended consequences of those sorts of laws. No excuse for the bank being sloppy, of course, particularly when they change locks on a home that isn’t even in their pipeline. But I do also think banks are nothing if not self-interested when it comes to money matters (read: greedy) – and that the only way a bank would spend money to send someone out on properties they don’t yet own (i.e. that are only in foreclosure) is because of liability issues that more or less force them to do so.

    Would love to see some digging into motives and reasons here; the “banks are bad” meme is saturated at this point (and beyond debate for most).

  7. Antifa

    We live in a non-judicial State, where clerks can approve a foreclosure.

    Our elderly neighbor has (had) a perfect payment record on his mortgage; it was deducted from his bank account automatically every month. He was 11 years in on a 15-year fixed note, but he’s living with his sister now.

    Chase Home Finance accidentally “misdirected” one of his payments, Wachovia/Wells Fargo foreclosed without ever telling him, and his house was sold at public auction without his knowledge four days before he got a notice that he had missed a second payment because it could not be applied to an account already in default. Plus there were late fees and interest expenses. The sheriff was real nice about it, but tossed him out all the same.

    We are now sending each of our monthly mortgage payments via Certified Mail, signature required, as our proof that Chase got it, and on time. Our lawyer says this won’t stop Chase from selling our house from under us like they did to our neighbor, but it will help reverse the situation in court afterward. He says their foreclosure division knows not what their loan servicing division doeth, so even if they tell you on the phone that your payment was received and properly applied it means nothing.

    “Assume you have to prove everything to a judge.”

    Having seen Chase Home Finance dispossess our neighbor, we now know beyond any doubt that we live in our home, after all these years, after all these on time payments, only one day at a time.

    Only until Chase Home Finance steals it. The game is to catch them at it in time, and to be prepared to prove them wrong in court.

    And, according to our lawyer, this game can be played again, as often as Chase wants to.

    1. Fractal

      “[T]his game can be played again, as often as Chase wants to.”

      Very well said. That, right there, is why we need to destroy some of these criminal enterprises. The bank holding companies need to be broken up, sold off in regional pieces, execs jailed for criminal fraud & theft; same for the banks & servicers in the holding company. Seizure of private property without due process (quartering of troops in private homes) was one of the triggers for the American revolution.

      1. Anon

        Antifa, I am so sorry to hear you are having trouble.

        I remember you from Billmon’s (if it is the same you), and you were an engaging contributor there, a bright spot. (I used to go by another name then, these days I am just Anon in honor of Wikileaks, Manning & co.)

        But yes, certified mail & everything. I don’t understand the point of trying to work things out “on the phone”.

        Put it in writing, or it ain’t never happened.

        One of the reforms that has got to come out of all this is surely the extension of judicial foreclosure to all states, not just the present minority.

  8. BRM3

    The fact that BofA continues to surface as the chief offender in every single one of these stories is really just staggering. I’m glad the government sees fit to raid mutual fund offices for tracking computer chip shipments but won’t stop one of the largest global financial institutions from blatantly illegal acts. I guess the “you can’t fight the govnerment” can now also include “you can’t fight the government or their sponsored private enterprises”. This really is an embarassment.

  9. Jardinero1

    It is usually not the banks, but the real estate agents under contract to the banks who are responsible for these shenanigans.

    Nineteen years ago, I leased a condo which, I later learned, was in the process of foreclosure. I came home to find a real estate agent, a locksmith and a mover in my condo. I asked what they were doing and they said they were getting the place ready to show. I asked them to leave my stuff, thanks very much. I moved out a week later. The owner sued the lender and managed to get the condo back. Then he was foreclosed upon, again, and successfully, about a year later.

  10. Recurrent Theme

    “That essentially leaves the property owners without recourse…” If the home is still *theirs* they have recourse.

    How is changing locks going to keep someone out of their home if *they still own it* anyway? If a Bank, hired goon, clean out crew – tries to break and enter or change locks before foreclosure sale (completing the process, commonly goes right bank to the fucking bank for pennies) I believe the owner is imbued with rights to protect his/her property. Including defending it, breaking back in, and so on.

  11. Christine Springer

    Yves, this stuff happens all the time. I’m surprised that it’s just now being given any attention. In the instance of my almost-foreclosure in 2009, right after the sheriff arrived to post the notice on the property, the lock-changing company arrived, only to be told to get off the property by my mother. My attorney told me that if they changed the locks, I could change them back.

  12. deeringothamnus

    One wonders if all parties might be better off if the banks foreclosed, yet allowed people continue to live in the homes until sold. I recently looked at some homes in the deep south, and after being unoccupied for one summer in the sweltering heat, the mold practically knocks you down. These places are not even worth the price of the land alone, as houses like these area a liability that will be expensive to be tear down and dispose of.

  13. Rick

    Unless Florida law has changed in the last 30 years, if they do it after sunset
    and you catch them in the act, you can shoot them on the spot. Fully justified.

    Not that I would do it myself or recommend that anyone do it.

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