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Wednesday, October 20, 2010

Foreclosures dirtier than I thought

The other day I referenced an article describing the foreclosure attempt that started the whole foreclosure freeze across the country. I ended my entry thusly:
It seems likely, then, that unless she finds another job, the trial will result in her losing her home. That's probably the case for most suspended foreclosures, unfortunately.
I still believe the first sentence. The second? Not so much after reading this Columbia Journalism Review piece citing coverage of wrongful foreclosures across the country. It's chilling stuff. Quoting the CJR piece, itself quoting from a Cleveland Plains Dealer article:
Michael and Pamella Negrea have never been late on a mortgage payment in the 15 years they’ve owned their home in Eastlake. But they’ve been foreclosed on three times.

Martin and Kirsten Davis, meanwhile, lost their home in Cleveland to foreclosure two years ago. The reason: a mess that started when they accidentally paid 14 cents too little on their monthly payment.

And Michael Rendes of Berea had his mortgage sold last year to Bank of America. The bank foreclosed on him in November, after insisting for months that it didn’t hold his loan and wouldn’t accept his payments.
Holy ____.

The underlying facts of the Nicolle Bradbury case appear to justify the foreclosure attempt, though obviously GMAC is (rightly) in hot water for submitting false affidavits. These other cases, though, look like unjustified and unjustifiable nightmares for the affected homeowners.

I shouldn't be surprised. Of course the lenders would cut corners by managing the paperwork in a hurry -- they were counting on being able to settle on the rare occasions the borrower had the wherewithal to fight them. Those settlements would have been cheap compared to the money they stood to make, and did make.

A tidbit from the Plains Dealer article: GMAC is now Ally. You know, the same institution that has been advertising all over television. Memo to self: stay the hell away from Ally.

The Miami Herald also has a story, as does the Wall Street Journal (freely available right now, but I don't know if it will disappear behind a paywall later).

Business ethics? What are they?

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