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More accounts are emerging of banks being seized for auction due to erroneous mortgage servicing. Photo: malinas/Flickr.com/CC-BY

The past few years have been fraught with tales and numbers of banks foreclosing on people and taking away their homes. The tables are starting to turn, as a few people have been foreclosing on banks and forcing errant financial institutions to live up to their obligations.

Florida couple foreclosed on by bank they didn’t owe

Various news agencies have been carrying stories of a Florida couple that “foreclosed” on Bank of America. Warren and Maureen Nyerges, according to CBS, received a foreclosure notice from Bank of America, after having paid B of A for their home in Colliers County, Fla. in cash. The Nyerges’ sued B of A and won their case more than a year after receiving the foreclosure notice. B of A was ordered to pay the legal costs of the couple, which amounted to $2,534. The bank neglected to pay the bill, so the couples’ attorney issued a foreclosure notice on the Bank of America branch with which they had been dealing. Sheriffs’ deputies then began seizing everything inside the bank. The bank manager eventually cut a check, blaming the mishap on the banks’ former attorney. Todd Allen, the attorney for the Nyerges, said it was “sweet justice.”

Wells Fargo branch foreclosed on

Earlier this year, there were a few stories from various news organizations about a man named Patrick Rodgers. Rodgers, of Pittsburgh, Pa., was told by the bank that his homeowners insurance premiums would be doubling, according to ABC. Rodgers did a little research, and sent the bank a legal request for information about his mortgage. The bank ignored it, and after Rodgers won a small claims judgement against Wells Fargo, the bank still wouldn’t respond to his request for information. So, he placed a sheriffs’ lien against the Wells Fargo branch, and sheriff’s deputies inventoried the entire branch office in order to sell if off. Wells Fargo did respond, and according to a blog post by Rodgers himself on the Consumerist website, Wells Fargo eventually settled with him on undisclosed terms.

Little-known laws at work

In both cases, a bank that wasn’t in compliance with the law had a sheriff’s levy placed against it. In many states, a person or entity refusing to pay a debt can have their property seized to pay the debt, which shocked these banks into action. Rodgers’ case of “foreclosing” on a bank involves a law called the Real Estate Settlement Procedures Act. The law, commonly called RESPA, mostly governs mortgage lender kickbacks but contains a provision for a “Qualified Written Request,” a legal request for clarification if a borrower believes an error was made on a mortgage account. It has to include the phrase “Qualified Written Request,” the bank must acknowledge in writing within 20 days that it has received the request, and issue a response within 60 days. If the bank fails to comply, the borrower is owed up to $1,000 in damages.

It should be noted that no consumer should try this against their bank without first consulting legal counsel or at least doing their homework.

Sources

CBS: http://www.cbsnews.com/stories/2011/06/06/earlyshow/main20069297.shtml

ABC: http://abcnews.go.com/Business/philadelphia-man-forecloses-wells-fargo-mortgage/story?id=12932362

Consumerist: http://consumerist.com/2011/03/patrick-rodgers-describes-how-he-foreclosed-on-wells-fargo-step-by-step.html

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