BofA Forecloses On Man's House, Even Though He Has No Mortgage

Bank of America stole Jason’s house from him, putting it through foreclosure even though he has no mortgage, with them or anyone, and he paid for it in cash.

The house was going through foreclosure when Jason bought it in December ’09 in a short sale, a scenario in which the bank allows the house to be sold for less than the value of the mortgage and accepts the loss.

It looks like though that the bank never told the courts to dismiss the foreclosure case and it continued to proceed. Jason didn’t find out this was going on until July of this year when he learned the title to his house had been transferred to a government-backed lender.

Not until the Sun Sentinel started prodding did Bank of America stir to action, promising to get the foreclosure rescinded at its own cost

“It looks like it was a mistake in communication between us and the attorneys handling the foreclosure,” a Bank of America spokesperson told the Sun Sentinel.

Indeed.

Man’s home sold out from under him in foreclosure mistake [Sun Sentinel] (Thanks to MercuryPDX!)

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  1. Holybalheadedchrist! says:

    I bet Fannie, or maybe Freddie was REALLY behind this. The transfer to Sharia Law is almost complete. (end sarcasm)

  2. oldwiz65 says:

    I would have expected the BofA to do everything they possibly could to NOT help Jason; after all, Jason is not a customer of BofA, has no mortage with them, and probably will never deal with them again anyway. The big problem is the BofA doesn’t really give a rats tushie if Jason gets kicked out of his house.

    just goes to show that BofA hates customers with a passion.

    • Pax says:

      Then again, if – due to BofA’s actions or inactions – Jason lost the house?

      Jason might sue BofA for the FULL VALUE of that house. A hosue BofA alread lost money on.

      Just for illustrative purposes: if it there was an outstanding balance of $300K on the house, and Jason paid $200K, the bank has lost $100K.

      If the house was then worth $300K as well, and Jason sues – for the value of the house, for the expense of renting alternate accomodations, for emotional distress over losing a house he paid cash for – and gets an award of, say, $500K (including attorney’s fees)? And the bank spends $100K defending itself?

      They’d be out a total of $700K. More than twice the actual value of the building.

      And then … anyone it was sold to at auction, could possible ALSO sue them, for selling it without having any actual, legal title to the property.

      So: million-dollar loss, or pick up the phone. Which do YOU think even a giant, uncaring corporation would do?

      • Gulliver says:

        The house could not be worth $300k. It would be worth what he bought it for period. If he paid a dollar for the house he could only be recompensed the $1. THAT is the value of his damages. There is no such thing as worth to a house. IT is based on what somebody was willing to pay for it.
        The emotional distress argument won’t fly at all. Any real expense would be considered valid. There are also parts that are not within BOA or any other mortgage lenders control. Third parties generally handle much of the foreclosure process especially on short sales and cash for keys.
        This is a non-story. They fixed a mistake.

        • MeowMaximus says:

          no, this is an important story – once again showing how the big banks are total incompetents who have no concept of customer service. I hope Jason is talking to his lawyer, but he should STILL sue BofA, just to make a point.

        • Eyeheartpie says:

          You say the house is worth what he personally paid, and then you go on to say it’s worth what people are willing to pay. I’m sure even if he bought the house for $1, he could then go and sell it for (made up number) $200k. That means the house is worth $200k. By saying that the house is only worth what he paid for it, you are saying that no one will buy it for more than he paid for it.

          Even if he bought it for cash for $1 from BoA, and then BoA stole it from him by not closing the foreclosure proceedings, then the value of his house is the actual market value, not what BoA sold it for.

        • MrEvil says:

          Actually, the house is worth what the local appraisal district says its worth. It just so happens that often the appraisal and the actual market price for a property aren’t in sync with each other.

          But just go see if the local appraisal district will lower your valuation (and thus your tax payments). And best of luck to you.

          • sonneillon says:

            Depends. If the judge says it is market. It is market. If the judge says damages are actual then they are what he paid. Judges have a lot of leeway, but if BOA had known it wasn’t the house and failed to do anything, which would come out in discover they could be held for treble damages for willful conduct. So they lose 100,000 on the house then if paid 300,000 they lose a million on it plus any if the other party sues them for.

    • ptkdude says:

      But he’s not a customer.

    • EllenRose says:

      But you just said Jason was not a customer!

    • Griking says:

      I don’t get the hostility in this post. BoA eventually said that they would straighten things out at their own cost.

    • grapedog says:

      at least he wasn’t buying tickets from Ticketmaster!

  3. denros says:

    Every time I read about BofA foreclosures on this site, it gets more and more ludicrous. Look, I realize this was just a (horrible) mistake, but I’m fully expecting to wake up one morning, read about a BofA digging up people’s dead grandparents to harvest their organs to pay for their debts, resulting in full-on coffee-monitor spray.

    • Blueberry Scone says:

      I’m fully expecting to come home one day and get hit with the news that my house is in foreclosure with BofA (we don’t have a mortgage through them).

      I mean, hell, even if you don’t have a mortgage, you STILL need to worry about it going into foreclosure.

  4. ARP says:

    I’m still trying to figure out why when a person does something like this its fraud, and people go to jail, and when BOA does it, its a mistake, miscommunication, etc. I thought Scalia made it clear that corporations are people.

    • RevancheRM says:

      THIS.

      What would be the equivalent for jail for a corporation, though? Since a person cannot do business while in jail, it seems to me that the corporations -after a trial and sentencing- should also be forced to close up shop (and exist on reserves) until the sentence has been served.

      Monetary damages, sure…but ‘jail’ also.

      • Loias supports harsher punishments against corporations says:

        Which is exactly why business are NOT individuals. It’s bullshit they get to be individuals when it suits them best but corporations when it suits them best.

        Executive officers sign documents that state they are legally responsible for the company’s actions (for example, a CFO would be responsible for tax evasion caused by his subordinates, even if he did not direct knowledge of the act) as do many middle-management positions.

        I say if corporations want to be individuals, then when they screw up like this it needs to be treated like a citizen did it. Find out the guilty department and make them pay restitution or jail time as appropriate.

        • Aedilis says:

          http://en.wikipedia.org/wiki/Corporate_personhood It’s a good read.

          The answer to your statement Loias is that in some instances, they are definitely considered individual people and in other situations they are not.

          For example, a corporation can be considered a sole proprietor of the business when constructing a contract. This would prevent the other party to the contract from going after individual shareholders or employees in the event of a breach of contract. So the corporation becomes the only ‘person’ you can litigate against.

          • dadelus says:

            Yeah, have to admit I’m kind of torn on this. I want large corporations to pay dearly for the “small mistakes” that cost real people dearly.

            On the other hand, my wife runs her own “sole-proprietorship” web design business and I want her (and by extension me) protected from upset clients who want to sue her for everything we’ve got. Let them take the business assets, if they were truly hurt, but don’t touch our personal assets.

            • Putaro says:

              And that’s the whole reason for corporations – limited liability and your loss as a shareholder is limited to your investment. It’s a good thing and encourages people to invest in riskier businesses or more businesses than they would partner in. The rest of corporate “personhood” is just nonsense.

              Incidentally, the smaller the corporation is, the easier it is to “pierce the corporate veil” and go after your personal assets. You have to be very careful to cross all the t’s and dot all the i’s when you’re running a small corporation.

      • ShruggingGalt says:

        Loss of corporate charter for a set period of time? Usually that means that they can’t enforce their contracts, or defend themselves in court….. (actually got to use that once in small claims court)

    • Pepster says:

      Corporations are COLLECTIONS of people. Scalia’s point (which you willfilly ignore) was that your right free association does not preempt any other right. Corporations are groups of people who still posses the rights of an individual (free speach, etc).

      I think the key to this is to break up the collection – If an employee of a corporation commmits a crime, even if it was their job, they should face individual penalties. You’d better beleive the lawyer’s would be more diligent if they’d face actual consequences for real estate fraud.

      • ARP says:

        I don’t willfully ignore Scalia’s point. The law does not prevent those individuals from contributing money, exercising free speech rights, etc. in their individual capacity. I don’t like the fact that they essentially get all the protections of corporatedom (limited liability, sue, own property, etc. and none of the burdens (fraud, criminal charges, individual liability for actions, the ability to blame everything on its own poor organization, etc.). Yes, technically they can be convicted, but the punishment is usually little to nothing.

        So, if they could actually put people in jail either because they made the decision that caused the fraud. Or if they created a corporate environment where it was either accepted or they were so negligent in their management that this could happen (like this case), they should go to jail.

      • Apeweek says:

        your assertion is nonsensical. The ‘collections of people’ in a corporation do not get a voice in what the corporation does – only a few at the top get to speak for the corporation.

        Corporations are not democratic institutions, and people do not join with them to express themselves politically. People join with corporations in order to make money – an entirely different sort of activity from politics.

    • Gulliver says:

      How is it fraud? Mistakes do not constitute fraud in any jurisdiction. If I as an individual person sold you a car without clean title, it would not be a de facto fraud. If it was an honest mistake I must remedy the situation (BOA IS), or rescind the contract and return your money in exchange for the car. There is no fraud. No crime.

      • ARP says:

        My point is the the threshold for fraud is much lower for natural persons compared to corporate persons and it should not be that way. I couldn’t change the locks a house I didn’t ownand tell the court it was a paperwork mistake, and neither should BOA. If they get the benefits, they should have the same burdens. Idealistic yes, but I thought we shouldn’t treat anyone differently?

    • raydee wandered off on a tangent and got lost says:

      Corporations are people where each individual part of the body works on its own with minimal imput from the brain; not that the brain has much to say, except “omg money money money” with occasional motivational comments to ensure the continued cashflow to the top.

      To extend the metaphor, not only does the left hand have no clue what the right hand is doing, in many cases each individual finger is absolutely clueless about the activities within its own domain. The knuckles have no clue what the fingernails are scratching.

      Corporations are horribly, horribly defective “people” and if they were breathing beings, they … would probably be dead because the latest SOP about heartbeat functions was written by the hair, who has never worked in the heart department.

  5. Cicadymn says:

    Well at least BofA didn’t accuse him of stealing/lying/cheating and simply said they’d take care of it at their own cost.

    I’m kind of impressed to see them “Yea, we fucked up, so we’re going to take care of it at our expense.”

    Sounds like good end to me.

    • tmac40 says:

      Coming from an organization whose right hand seems to not even know it has a left hand, I wouldn’t relax until its over. But then who knows they might start this all over again. What happens when you are too big to fail or succeed?

      • Difdi says:

        Yeah, I could totally see the right hand promising to fix the “honest mistake” … and meanwhile, the left hand has discovered someone is squatting in a BofA property, and calls in the SWAT team…

    • travel_nut says:

      I accidentally stole your car, but the police caught me–oops! So here’s your keys back, sorry I screwed up, have a nice day!

    • cheri0627 says:

      Simply said they’d take care of it after ignoring it for months until the Sun Sentinel became involved. That’s also a big problem if a person has to contact the media to get a problem like this taken care of.

    • oldwiz65 says:

      An oral promise from a spokesman at a corporation is worth nothing. They might fix it eventually, but you can be sure it will be months before anything really happens. In the meantime Jason is up the creek.

  6. sgtyukon says:

    I think my family’s safe because we do have a B of A mortgage.

  7. dolemite says:

    “We got so many foreclosures, we can’t tell if we are coming or going! hahah..our bad.”

    I laughed at the “at its own cost” line. Who else would pay? “Sorry sir, we have no legal right to your house since you have deed and all…but would you mind paying to have this illegal foreclosure taken care of?”

  8. The Cynical Librarian says:

    So it was a mistake and BoA is fixing it?
    Anything else to see here?

  9. ElleAnn says:

    I think it’s Jason’s fault. He apparently didn’t care about keeping his house from being stolen, leaving it out there on the street for just anyone to see.

  10. GuyGuidoEyesSteveDaveâ„¢ says:

    So if the court screwed up the paperwork, would it still be BofA’s fault?

    • Difdi says:

      If BofA short sold the house and “forgot” to tell the court that, thus resulting in the court making the “mistake” of handing ownership back to BofA for free? Yeah, BofA has responsibility.

      • GuyGuidoEyesSteveDaveâ„¢ says:

        Jason didn’t find out this was going on until July of this year when he learned the title to his house had been transferred to a government-backed lender.

        So BofA is the lender? If so, why would it cost anything to get the foreclosure rescinded?

        • Sudonum says:

          How about the sentence before the one you quoted

          “It looks like though that the bank never told the courts to dismiss the foreclosure case and it continued to proceed. “

          “the bank” being BofA? If so then it seems to be their fault to me.

  11. Quake 'n' Shake says:

    Bank of America has acknowledged the error and will correct it at its own expense, said spokeswoman Jumana Bauwens.

    I know if it were me, I’d be highly skeptical of their ability to do this in a prompt manner.

    • catnapped says:

      Especially when “correct it at it’s own expense” means money out of stockholders (and the board’s) pockets. NUH-UH

  12. Thyme for an edit button says:

    Fuck it, I am never buying real estate.

  13. TBGBoodler says:
    • kmkazoo says:

      There is so much that is SO wrong, going on with these foreclosures. The BofA and the robo-signer are just the tip of the iceberg, I’m thinking. The average person is so screwed, dealing with the government and these corporations.

  14. sopmodm14 says:

    wow, 2 bank o’ America articles in one day

    they put shame in using the word “American”, and should change its name

  15. lovemypets00 - You'll need to forgive me, my social filter has cracked. says:

    “Grodensky knew nothing about the foreclosure until July, when he learned that the title to his home had been transferred to a government-backed lender.”

    This could have happened when a deed or map number was keyed into a computer system when a clerk was working on the actual foreclosure.

    We own our home, free and clear. Last summer, we didn’t receive a county real estate tax notice. When I called the courthouse to find out where it was, I was told “you sold your home to “X” Land Company. I went around and around with the clerk, and I insisted I would remember selling my home. I had to take a vacation time from work, went to the courthouse twice, and literally sat at the woman’s desk until she finally fixed the error. Tuns out the home down the road from me was sold, and our real estate code numbers were identical except the last two digits were different. A two digit mis-key effectively “sold” my home to someone else.

    So, someone, somewhere probably mis-keyed a digit or two into a computer system, and boom – the man’s home is gone. You would think that someone would have noticed, especially since it was a foreclosure. One would think there would be some sort of safeguard or second set of eyes on the paperwork before it’s executed.

    • catastrophegirl chooses not to fly says:

      it’s because of all the horror stories that i read here, the state revenue department sending me overdue tax notices for a business that’s never been located at my house and the fact that i know my county keeps their records by long, easy to mistype parcel numbers, that every couple of months i look at the county’s website and check my property records. no “bottom of a locked filing cabinet stuck in a disused lavatory with a sign on the door saying “Beware of The Leopard”.” for me, thanks.
      someday someone will transpose some numbers or forget to notify me that someone sold my house out from under me or something and i want to know about it before it blows up in my face.
      the good news is that my mortgage is held by my credit union which might notice if bank of america tried to sell it out from under them/me

      • GearheadGeek says:

        The storage location you described is for the bypass planning documents, not the deeds themselves. Maybe the Vogons keep the deed records?

  16. runswithscissors says:

    Maybe “Jason” shouldn’t have bought a McMansion he couldn’t afford! Pay your debts and these things won’t happen to you!

    How’d I do there, regular OP blamers?

  17. RogueWarrior65 says:

    This is why you buy title insurance. And never EVER use the home inspector recommended by the realtor or the seller.

    • catastrophegirl chooses not to fly says:

      i had very good success using the home inspector recommended by my buyer’s agent. but i also checked the reviews for him online and they were all good. they were very thorough and caught things i never would have noticed, like the wrong kind of screw [pointy] being used on an electrical outlet cover. i mean, i might not have ever unscrewed that outlet cover in my life and never known it was there [fire hazard for those of you who aren’t familiar, the point can pierce wiring if you get unlucky]

  18. Difdi says:

    Given that eviction and foreclosure documents are generally required by law to be specific and accurate, can such a court order be valid or enforceable if the owner is not the one whose name appears on the foreclosure order, and the name on the eviction order doesn’t match the resident’s/owner’s?

  19. DanKelley98 says:

    There really needs to be jail time. If not, I’ll incorporate, screw up other peoples’ lives…and then bear no responsibility.

  20. SilverBlade2k says:

    I really wish someone would sue BofA for double it’s assets just to get the point across that they can’t keep doing this to people.

  21. Joseph S Ragman says:

    Stay classy, Bank of Amurica … once again, totally clueless

  22. StarVapor says:

    Don’t expect too much from B of A as lon as they are aligned with the basics of capitalism. Capitalism does two things…it legalizes and rewards greed.
    Greed (excessive desire to acquire or possess more, especially more material wealth, than one needs or deserves) has been with human beings forever.
    We have a number of things in our species that you would call the dark side, and greed is one of them. If you don’t put certain structures in place or restrictions on those parts of our being that come from that dark place, then it gets out of control.
    Capitalism does the opposite of that. It not only doesn’t really put any structure or restriction on greed. It both encourages and rewards the dark side.

  23. Draw2much says:

    Ah, our mortgage was sold to BoA! SCARY! D:

  24. shufflemoomin says:

    I don’t see the problem. Surely he has records and proof of the sale, therefore he legally owns the house, doesn’t he? It would be illegal for them to take it, as far as I can see.

  25. SPOON - now with Forkin attitude says:

    I would like to see a 5 year prison term for the people who do this. BOA is people. the bank manager, the underwriter, and the 2-3 lawyers involved, and maybe up the corp chain.

  26. Truthie says:

    As awful as this sounds – this is why you pay for title insurance when you buy a house. All sorts of odd things can happen and title insurance should either provide funds for an attorney to sort it out or compensate you.

  27. Dave on bass says:

    How does this even happen? Isn’t foreclosure a legal matter, and doesn’t the bank have to prove legally that they have a claim to the target property? In this type of instance, I wouldn’t be after BOA’s apologies. I’d be out for kneecaps.

  28. the_Jenkins says:

    I love misleading titles! Instead of stating that the original mortgage was in foreclosure promptly, we’re being led to believe BoA majorly messed up, but in essence only forgot to stop a ligitimate foreclosure. Tisk tisk

    • Difdi says:

      Legitimate? How do you figure that?

      Person A has a house mortgage with BofA. Person A fails to make payments so BofA initiates foreclosure. Person B strikes deal with Person A and BofA to buy house short, for cash. Deed changes hands and neither BofA nor Person A have any legal ownership of the house any more.

      BofA “forgets” to inform court that the mortgage default has been resolved, nor does BofA inform court that the bank no longer has a mortgage at all. Both being absolutely required by law. A private citizen who pulled this exact stunt would be guilty of either criminal fraud (if the “forgetting” was intentional) or criminal negligence (if they simply forgot to file the mandatory paperwork).

      Court seizes house and transfers deed from current owner (Person B) to BofA. Given that the court only knows what Person A and BofA told them, and Person B has no contact or legal standing in the foreclosure action against Person A, the fault is 100% on BofA.

  29. Papa Midnight says:

    “Now what we have here is a failure to communicate”