Mortgage Problems Costing Some Responsible Homeowners Thousands

Financially speaking, there probably isn’t anything worse than having your home sold out from under your nose. That’s exactly what happened to Julio Bermudez and Magaly Cervantes in Dade County, Florida.

Their nightmare started a couple years ago when they were having problems making their mortgage payments on their condominium in the Hialeah Gardens area. Last August, they applied for a mortgage modification to help make their payments more affordable. Their application was approved and since then, they made the nearly $660 payment each month. So you can imagine their shock and surprise last week when they received a letter that stated Chase, their mortgage lender, had foreclosed on them and already sold their property online.

This week, the two were in court pleading their case in front of Senior Judge Robert M. Deehl. They told him with tear-filled eyes how they made their payments faithfully after modifying their mortgage and their home was still sold. Unfortunately, the judge could do nothing about the situation and he just told them they would have to deal with the bank directly and try to work something out with Chase.

Chase did not return any phone calls to the couple until the Wall Street Journal inquired on their behalf. As a result, the bank said it would look into the matter. After investigating the situation, Chase admitted that it made a mistake by selling the home. A spokesperson for Chase said the bank is trying to remedy the situation by reversing the sale and apologizing to the customer. Chase also said that it was going to review the couple’s application for a permanent modification. Currently, the couple is waiting to hear back from the bank.

This story is not unique to the mortgage industry these days. In fact, there are many stories like this that do not end as amicably. With more than a million homes going through foreclosure, thousands of homeowners a complaining that the banks are making mistakes in their paperwork. These complaints, however, do not receive any publicity and they are not tracked so it is difficult to know exactly how many people are complaining about mistakes in their paperwork.

Banks report that the foreclosure process is “sound” and the errors are technicalities that do not affect the actual foreclosure process for the home. But as this one story shows, that is not always true. Banks, just like other industries across the nation, are short staffed these days and the number of foreclosures continues to increase. That’s just a recipe for disaster and mistakes.