On Friday, News-Press reported a story where a homeowner's attorney, assisted by two sheriff's deputies and a moving company, served a foreclosure notice and asset-seizure on a Bank of America branch in Naples, Florida. The bank was faced with a choice: open the branch doors so the moving company could haul furniture for a public auction, or pay $2,534 in attorney fees assessed by a court order.
After an hour of talks, a representative of the bank branch wrote the check.
What started this mess? Reportedly, the Bank of America had wrongfully foreclosed on a home owned by:
"... retired Bay Village, Ohio, police Sgt. Warren Nyerges and his wife, Maureen. Collier court documents show that they bought a house in Golden Gate from the bank for $165,000 in 2009. They paid cash, no mortgage. But somehow the bank and its attorney, the David J. Stern law firm, became convinced that the couple had a mortgage and was behind in the payments.
Yes, you read that correctly. The Bank of America tried to foreclose on a home with no mortgage where there obviously were no late payments. That's a corporate "mugging" if there ever was one.
Bank of America filed the foreclosure lawsuit on February 16, 2010 and later dropped the lawsuit, but never paid the homeowners' attorney fees, as ordered by a Circuit Court judge. After the bank ignored several requests for payment of the debt, the homeowners' attorney obtained the necessary legal authorization to proceed with the asset seizure.
A story like this makes you wonder how many other consumers have been wrongfully foreclosed by their banks. It is another warning for the U.S. Congress and states' attorney generals to get serious about wrongful foreclosures by banks, and send some bank executives to jail. Units of Bank of America and Morgan Stanley recently agreed to pay a $22 million settlement with the U.S. Justice Department regarding wrongful foreclosures on active-duty military members.
Several federal audits conducted earlier this year by the U.S. Department of Housing and Urban Development have charged several banks -- Bank of America, JPMorgan Chase, Wells Fargo, Citigroup and Ally Financial -- with cheating taxpayers on home foreclosures by submitting false claims to the Federal Housing Administration. Reportedly, Bank of America has refused to cooperate with this investigation.
This Naples, Florida incident has to be embarrassing for Bank of America, and it shows an astounding level of arrogance. You would think that the bank of America would be a lot more responsive given the above settlement, citizen action to move their money to smaller, local banks, and nationwide protests by consumers that the Bank of America doesn't pay its fair share of taxes.