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: Eye on the Bailout

Disorganization at Banks Causing Mistaken Foreclosures

By ProPublica

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by Paul Kiel, ProPublica - May 5, 2010 2:30 pm EDT

Last November, Michael Hill of Lexington, S.C. (right), was told by a JPMorgan Chase representative that his trial modification mortgage had been approved. Except there was a problem. Chase had foreclosed on Hill's home a month earlier. (Bruce Flashnick)

Millions of people face losing their homes in the continuing foreclosure crisis, but homeowners often have more than the struggling economy and slumping house prices to worry about: Disorganization within the big banks that service mortgages has made a bad problem worse.

Sometimes the communication breakdown within the banks is so complete that it leads to premature or mistaken foreclosures. Some homeowners, with the help of an attorney or housing counselor, have eventually been able to reverse a foreclosure. Others have lost their homes.

“We believe in many cases people are losing their homes when they should not have,” said Kevin Stein, associate director of the California Reinvestment Coalition, which counts dozens of nonprofits that work with homeowners among its members.

Read the full story.

Full post as published by Eye on the Bailout on May 05, 2010 (boomark / email).

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