One would think that a bank could only foreclose on a home if it owns a mortgage on the property. Well, Jason Grodensky entered the Twilight Zone of the housing crisis when Bank of America foreclosed a home he outright owned without a mortgage.
Grodensky and his father purchased the house for cash as an investment property. They purchased the home through a negotiated short sale. Regardless, a court-ordered foreclosure sale took place and the home was purchased by Fannie Mae, a government-backed lender.
Let’s construct a bit of a timeline: Countrywide Home Loans filed a foreclosure case on this property in 2008. When Bank of America took control of Countrywide, the mortgage and note were transferred to them. Then in December of 2009, Grodensky purchased the home. One would think that this would end the foreclosure process. But, that was far from the truth.
Thereafter, a motion to dismiss the case was filed in July. The very next day a motion was filed to re-open it and the home was sold in a court-ordered foreclosure sale on July 15. Although Bank of America stated it will foot the bill to resolve the problem, Mr. Grodensky’s case brings to light the myriad of problems affecting borrower during these difficult times.
How could this happen? Let’s start with the foreclosure courts. Many cases are simply being herded like cattle through the system so the cases can be quickly disposed of. In this environment, mistakes are inevitable. Luckily, Judge Victor Tobin, charged with running Broward’s County Court foreclosure system says this is the only time he’s heard of this happening.
Next, lenders’ lawyers are obviously not doing their jobs in a thorough manner if a home can be illegally foreclosed upon. Here, the Florida Default Law Group represented the lender. Currently, this law firm is under investigation by the Florida Attorney General’s Office for allegedly submitting false or misleading documents to court. Perhaps there may be some truth to these allegations, or it could be a function of the fact that firms such as this are handling thousands and thousands of cases all at the same time. For example, a Chase Home Finance executive recently stated under oath that her and a team of eight supervisors sign about 18,000 documents a month. One can only imagine what their lawyers are facing.
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