Bank Of America Tries To Undo Foreclosure On Home It Didn’t Hold Mortgage For, Fails

Seems like it’s just so darn easy for banks to accidentally foreclose on a home and force the residents to move out, but when it comes to making it right everything gets quite difficult. Bank of America has tried to rescind a foreclosure from April 2010 on a home it didn’t hold the mortgage for, but turning back the clock isn’t possible for the family that used to live there.

A Georgia woman is now suing Bank of America, after having to move out of her family home and losing many of her valuables in the process of the foreclosure. The Atlanta Journal-Constitution says her case sheds light on how little protection borrowers get from the state during foreclosure. There’s no judicial review in Georgia, like most other states as well, where a judge would verify the basic facts before a home is taken by a bank.

Here’s how she says it went down: The original bank holding her mortgage collapsed in August 2009. After it closed, she refinanced her loan with another bank, Freedom Mortgage. Meanwhile, the government transferred thousands of mortgages from the closed bank to Bank of America, and many records were lost in the confusion.

The payoff of the original mortgage wasn’t recorded in county records until eight months after Bank of America foreclosed on the home, but her attorney says checking property records before her home was foreclosed should’ve shown that by the time BofA was involved, she already had a new mortgage.

She also says she was current on that new loan until the day she was forced out of her house. She began receiving late notices from BofA weeks after her refinancing with Freedom Mortgage, and says that she was given the runaround by both banks at that time. She also claims that one Freedom Mortgage rep told her to ignore BofA’s notices.

Even though BofA is trying to work with regulators and borrowers to fix things, the woman says her health deteriorated from the stress and she had to take a medical leave from work. She’s suing both Bank of America and Freedom Mortgage, claiming it mishandled the canceling of the original mortgage, as well as a company that seized many of her belongings.

Five months after Bank of America foreclosed on her home, she received a letter from a law firm to vacate the house. So she packed up her four kids and moved to North Carolina, leaving some belongings behind. When she returned a few weeks later, she says her remaining valuables were gone and the locks were changed.

“We have a roof over our heads. We’re grateful,” she said of her apartment home now. “But it can never replace a dream home you thought you’d have forever.”

*Thanks for the tip, Rachael!

Botched transfer leads to foreclosure nightmare [Atlanta Journal-Constitution]