Sep 232010
Man’s home sold out from under him in foreclosure mistake
Short form: Guy buys a house in Fort Lauderdale last December. Paid cash, no mortgage, owns it outright.
July: Bank of America forecloses on him anyway.
Turns out that this was a “mistake,” and the responsiblity of (GASP!) attorneys. And it turns out that this sort of “mistake” is much more common than is generally known.
2 Responses to “Well, this is modestly horrifying… (Part 2)”
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I know someone who had a house sold out from under her because the second mortgage was behind. The holder of the first mortgage still thinks the house is theirs. The sheriff tossed the occupant out. I really, really wanna be there when the holder of the first mortgage stops getting payments.
@Michael; That should be fun to watch since the holder of the second lien is specifically in line behind the holder of the first lien. That translates into the first lien holder getting first call when the check is cut for the remaining principal and the second lien holder getting whatever is left to the point of how much principal was left to be paid. BTW, the Lawyers. State, and Real Estate Agents get their cut off the top. And, if by some miracle, there’s any left then it goes to the Homeowner.
As for the “mistake”, it’s now looking like it’s an endemic problem with the business model the Banks and Mortgage Banks had put in place. The level of foreclosures those business models were set up to handle in a legal manor are FAR below the number they’ve been handling for a year or more. It *looks* like a ticking ‘dirty’ bomb since not only are the foreclosures vulnerable to being set aside but all the damage done to the people who were foreclosed on is actionable.
http://www.palmbeachpost.com/money/real-estate/gmac-suspends-foreclosure-evictions-and-sales-of-seized-927171.html