Foreclosure Stories: Bank’s greed backfires!

Aug 23, 2012



This is a weekly column by Sandusky attorney Dan McGookey, devoted to telling true stories of homeowners who have been victimized by a lending system that makes it profitable to foreclose. The names used have been changed for privacy purposes. This is the Penns' Tale.

The Penns were sued for foreclosure in 2010 by BAB Home Loan Servicing. After contesting the case and pointing out that, among other things, their loan was owned by Fannie Mae, and that BAB had not complied with all the requirements of Fannie before filing foreclosure, BAB dismissed the case in August, 2011. Unfortunately for the Penns, who simply wanted to get a break on their mortgage payments and get on with their lives, that was not the end of things.

Following the dismissal, BAB offered a “trial plan modification” consisting of three payments of $1,062 per month, including taxes and insurance (compared to the $1,300 required under the original loan), which the Penns agreed to, and paid. Thus, they rightfully thought that they had their nightmare behind them. However, rather than get a permanent loan modification agreement in the mail, the Penns received another foreclosure complaint.

At the same time as they received the new complaint, the Penns received another loan modification proposal asking them to pay $868 per month on their loan, or almost $200 per month less than the original offer. Being people of good faith and desperate to save their home, the Penns began sending in this new payment amount. After the Penns brought their new complaint into us, we entered a vigorous defense, including a counterclaim seeking damages on account of BAB’s failure to recognize the first modification agreement. Shortly after that, foreclosure counsel for BAB reached out to us, asking if the Penns would be willing to simply go back to the agreement requiring the Penns to pay the $1,062 per month.

At this point, given all the problems caused the Penns, and armed with BAB’s agreement with the federal government to redress foreclosure fraud abuse it has committed against thousands of homeowners, we are pressing BAB to do even better for the Penns. We are hopeful that we can get their mortgage payment reduced to below $800, a $500 per month drop from where they originally started. As we see so often, this is only sweet justice for all the misery that the Penns have been put through. Stay tuned!

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Next week: The story of Dorothy, who within three weeks of bringing her foreclosure complaint in to us, and after we entered a defense consisting of comprehensive written discovery questions about her loan, the bank dismissed her case. Could it be yet another case of faulty paperwork?

Copyright 2012 Daniel L. McGookey