Bank of America (NYSE:BAC) got a taste of its own medicine last week when it didn’t pay a Florida couple attorney’s fees it owed them for incorrectly foreclosing on a home they’d already paid for.
The Associated Press reported that an office manager at a branch in Naples, Fla., nearly had to cough up a bevy of office furniture before the bank eventually handed over a check for $5,772.88.
Two years ago, Warren and Maureen Nyerges purchased a home out of foreclosure from Bank of America and paid $165,000 in cash. But instead of identifying the Nyerges as the new owners, the couple was mistakenly thought to be the property’s prior owners, who had lost the house in foreclosure.
That prompted Bank of America to send a process server with a notice of foreclosure four months after the Nyerges moved into their new home.
The couple told the AP that their attempts to correct the error were met with representatives’ advice that they should “come up to date” with their payments. After the Nyerges proved they owned the house last September a judge ordered Bank of America to pay the couple’s attorney fees.
When the bank still hadn’t paid by last week, their attorney got a judge’s permission to seize assets, and showed up at the Naples branch with a moving truck, prepared to remove branch fixtures as payment.
Bank of America apologized for the delay in paying the couple and said they didn’t pay sooner because the original request went to an outside attorney who is no longer in business. Interestingly enough, the attorney who foreclosed on the Nyerges home, along with two other law firms, are being investigated by the state attorney general for creating fake legal documents and filing foreclosures without proving the bank had a legal interest in the loans.
Sure, there are many homes in foreclosure that legitimately belong there because borrowers took out loans they couldn’t afford. And incidents of mistaken foreclosures remain isolated.
Unfortunately, it’s not that hard anymore to find someone who has either legitimately experienced some paperwork error with their lending documents or knows someone who has. And we may know more soon, now that a Bank of America spokesman has testified that its Countrywide Mortgage unit didn’t deliver the notes to the securitization trustee or get the notes endorsed as a routine part of business. These steps are required in securitization contracts.
Many consumers will take glee in Bank of America’s slap on the hand, given the millions of Americans who lost their homes because of the housing debacle that crippled the nation’s financial system. While one family got some justice, there are millions of duped homeowners, investors and taxpayers who are still waiting for theirs.
Meanwhile, some consumers who are able to borrow and help move the economy forward just may be sitting on the sidelines because they don’t trust the banks.