I had a bizarre experience today where someone told me that none of the parade of horribles we have been discussing have actually happening. He didn’t use the word myth, but he sure implied it.

I quickly pulled these examples, but I want to ask you the reader: What other cases are there of actual errors — wrong house, wrong bank, wrong note, or wrong person — in the foreclosure fraud fiasco?

I’ll get you started:

• Lawsuit accuses Bank of America of seizing wrong house: Dr. Alan Schroit filed the lawsuit Monday in the 122nd State District Court in Galveston against the bank with which he has neither a relationship nor a mortgage. (The Galveston County Daily News)

• Christopher Hamby of Wheelwright, Ky., filed a lawsuit against Bank of America for repossessing his home by mistake and refusing to pay for damages other than replacing the locks. (Floyd County Times)

• Jason Grodensky bought his modest Fort Lauderdale home in December, he paid cash. But seven months later, he was surprised to learn that Bank of America had foreclosed on the house, even though Grodensky did not have a mortgage.  (Sun Sentinel)

• A Hampton Pennsylvania woman is suing Bank of America, saying one of its contractors wrongly repossessed her home, padlocked the doors, shut off the utilities, damaged the furniture and confiscated a pet parrot, though her mortgage payments were on time. (Pittsburgh Post-Gazette)

• Charlie P. and Maria Cardoso of New Bedford claimed that their home in Florida was free of any mortgage. They filed a lawsuit for a wrong foreclosure, claiming that the Bank of America had foreclosed. Their lawyers argued that the Bank had already been notified about the wrong foreclosure, in July, despite which it got foreclosed (South Coast Today)

• A Las Vegas woman whose condo was mistakenly emptied in a bungled foreclosure action could be the first person to benefit from a new state law.  Nilly Mauck, left Las Vegas in mid-December for a snowboarding trip to Utah and returned to stay with a friend for a few days when she received a disturbing phone call. Something was amiss at the Coronado Palms condominium on Badura Avenue that she had owned for the past two years. (Las Vegas Sun)

Now, we know the above are “legal impossibilities” and yet they happened. What other legal impossibilities have actually happened. Please provide data, links, and actual examples. You lawyers should be able to provide info using just initials or first name, the bank, and the town or county

Category: Foreclosures, Legal, Real Estate

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

109 Responses to “CrowdSource: Legal Impossibilities & Foreclosure Errors”

  1. In a way this is like the housing bubble in reverse. In the bubble, mortgages were rubber stamped without any due diligence as to whether the buyer actually had any ability to pay the mortgage. Now the issuing cos. are doing the same in reverse, approving foreclosures without any due diligence as to whether the foreclosure is legally allowable and warranted or even at the right street address. Good times.

  2. RadioFlyer says:

    Here’s one. From 1987. Which kind of disproves your claim, Mr. Ritholtz, this has never happened in this country before.

    “Miami, FL, Family Mistakenly Evicted”
    Toronto Blade – Oct 7, 1987
    A tearful woman watched as eviction workers given the wrong address threw her family’s belongings,including antiques collected over 18 years, out doors and windows and onto the lawn.
    To continue reading:

  3. Radio Flyer:

    I said I wanted examples of wrong house, wrong bank, wrong note, wrong person

    This was right bank right note right person wrong house. The foreclosee had two houses with the same bank, and there was a Human error — the bank official accidentally transposed the addresses for foreclosure.

    Note that in these unusual circumstances — 2 houses same bank same person one foreclosure — an error, though improbable, is still possible through human mistakes.

    That is quite different than a bank not reviewing documents, and grabbing the wrong house, person or note. Single Person, house, note and mortgage should not lead to the wrong person being forclosed on.

  4. ACS says:

    Well you know a few pearls are bound to get tossed in with the swine when you’re doing God’s work.

  5. As my disinterested but intelligent wife just pointed out, the difference between a raging flood of a river and a normal river is the quantity of water in the river. Radioflyer seems to say that because something happened, but very rarely, in the past, this should counsel against any concern when it is now happening at a rate orders of magnitude higher than in the past. At some point a quantitative change becomes a qualitative change. I know Radioflyer understands this. What I don’t understand is why he wants to hang his hat on denying it. Also, this stuff is against the law. You can’t use as a defense that other people have done it in the past.

  6. Julia Chestnut says:

    Of course, wrongful foreclosure is a state cause of action, and the state databases are much harder to search than PACER. HOWEVER, you could limit the search by choosing certain states and then searching their databases. Alternatively, the large data companies that serve lawyers (you know the ones) have searchable databases based on all states – but as someone once said “this could run into money.”

    Might I suggest that you contact a law school clinic? They have free access to said services, and manpower to spend on the project. Consumer law based or real estate based clinics are a good option – although a social justice clinic might be equally interested. If an alma mater of yours has a law school, that might be a very good place to start. . . . .

  7. Petey Wheatstraw says:


    It’s not because of a lost document. Please explain to me the legal principle behind the idea that one party should send money to another without the second party being able to PROVE the obligation for them to do so. Are you insisting that the banks’ word be taken, in lieu of proof?

    The banks screwed themselves.

  8. b_thunder says:

    Barry, you should stop talking to Art Laffer. It may not be good for your sanity.

  9. call me ahab says:

    and confiscated a pet parrot

    I was indifferent until I read about the parrot-

    c’mon man- that ain’t right

  10. call me ahab says:

    What other legal impossibilities have actually happened

    here something I purloined from ZH:

    . . . the Earls [previously foreclosed] who after falling behind on their $880,000 loan, inspired by recent events, decided to take matters into their own hands (and the hands of their 9 children) and broke back into their foreclosed house. The police in local Simi Valley, made famous previously by such cult deadbeat classics as the Big Lebowsky, were so stumped by this they had no idea what the hell is going on so they just watched.

    hells yeah- you go Earls- so what if you don’t pay your mortgage- you deserve that home- let’s just slop this up as long as possible-

    (and watch out for the cops- they’ll smack you with a coffee cup)

  11. JustinTheSkeptic says:

    Can’t BR, but I can say that I have been watching a house just across the pond, in Vero Beach, Florida, that just happens to be one of the best located home/lot in the subdivision, that has been empty for over three years now. What other reason except that the Banksters desire to keep that property on their books at a higher value than what they could get for it today, yesterday, or three years ago? This mortgage moritorium in my mind is just another way for banks to extend and pretend. How coy for the “politicians” and mortgage holders (“banks”), to now come up with yet again another red-herring to piss on true economic reality’s back and tell everyone that it is raining!

  12. M says:

    Well my fav legal impossibility of the week:

    ICE deported a US citizen because, and I kid you not, some ICE agent believed that a citizen is deportable if convicted of a misdemeanor… A judge signed the order. http://www.google.com/hostednews/ap/article/ALeqM5jZqiEEgsHMJjGyQuQTx3l1iNTg3wD9IR5IPG0?docId=D9IR5IPG0

  13. I know of a guy (a neighbor across the street) that holed up in his basement with a rifle when the Sheriff deputies came to evict him. He’d lost the house due to a divorce, though, so I’m not sure it’s applicable. But it was great theater. What a loser.

    I can’t recall any case of mistaken foreclosure coming across my desk in thirteen years of examining real estate titles and closing real estate transactions. That might be because I wouldn’t have thought much of them, considering how easily they’re resolved. But out of about 6,500 real estate closings I’ve personally conducted, I gots nothing.

  14. whskyjack says:

    I think the question is how many people are out there that don’t make the news. I found this on a legal advice forum from a man in Texas last winter.

    ” For over two months I have been LOCKED out of my property since they changed the locks, posted signs on the windows and winterized the house. Two weeks ago they finally accepted that they no longer have an “interest” on my property…but they won’t say it was a mistake………………………….
    ………………………….. My lawyer said that if I sue them I probably can get about two months worth of loss of use which is 900 dollars, but I would have to pay a lot on attorney fees.”


    So what does the little man do when he gets shoved around by the big bank. As I said a couple of days ago. BOA has lawyers on staff that can out do any lawyer I can hire.
    I agree with BR somebody needs to be going to jail.

  15. Dennis the menace says:

    This was simple error — no foreclosure, but it must have scared the piss out of this guy:

    Foreclosure Notice Posted on Wrong Home

    A Woodland, Washington man was shocked to find a notice of default posted on his home when he returned to his residence Friday, which said he needed to come up with $290,000 to avoid foreclosure.

    The homeowner, Kraig Neet, told affiliate Fox 12 Oregon he knew he hadn’t missed a payment or even been late, but panicked anyway, as most would in such a situation.

    After three days of searching for an explanation, Neet discovered it was a simple mistake made by the serving attorney.

  16. Why does all this stuff seem to happen in Florida?

    Wrong Home In Foreclosure Due To Deed Error (April 22, 2009)

    A deed error has one family on edge because a bank is foreclosing the wrong home in Kissimmee.

    A family’s home is in foreclosure and was scheduled to go on the auction block next week, but it’s isn’t just another foreclosure story, it’s a big mistake.

    The problem is that a house that should be in foreclosure has the wrong address on its deed. So now, instead of the bank taking the correct house on Estancia Circle (see map) it’s foreclosing on a neighbor’s home who has nothing to do with it.

    Eyewitness News reporter Mary Nguyen managed to get the foreclosure auction delayed. Nguyen told the foreclosure judge about the problem and he has decided to delay the sale of the house.

  17. No Mortgage, Still Foreclosed? Bank of America Sued for Seizing Wrong Homes
    In the Last Four Months, Three Homeowners Have Sued Bank

    They said they were shocked to learn earlier this month that Bank of America had locked them out and removed their clothing and furniture from the property.

    “All the love I put in that house — I fix things up every time I go there,” Charlie Cordoso, a construction worker, told ABC affiliate WCVB Boston. “Bank of America or somebody should apologize.”

    The Cordosos, Portuguese immigrants who are in their 50s, are now suing Bank of America for allegedly seizing the wrong home, and they’re not alone: Two other homeowners, one earlier this month in Texas and another last October in Kentucky, also have filed lawsuits alleging that Bank of America attempted to foreclose on their homes even though the bank did not own or service mortgages for the properties.

  18. Robespierre says:

    It seems that this was already happening in 2009

    Bank auctions wrong house in Miami; not the first time
    Josh SmithJosh Smith RSS Feed
    Aug 19th 2009 at 4:00PM



  19. Petey Wheatstraw says:

    Escondido, CA — More and more homeowners are beginning to revolt against what they say are wrongful foreclosure and eviction practices.

    Today, in an effort to assert their legal rights, two families in Escondido took possession of homes they said they were illegally evicted from. The families said the foreclosures were intentional and calculated to fraudulently evict them. On the advice of their attorney, the families moved back into their homes.

    “I’m very excited and feel a little bit worried about what is going to happen,” ” said Emiliano Bolanos.

    His family was evicted in the middle of the night two months ago. He has been living with friends ever since. Next the families will take their battle to court. Their attorney, Michael Pines, said he believes there are about 60 million foreclosures nationwide that were based on fabricated and forged documents.



    BR: Is that 60 million or 6 million ?

  20. Petey Wheatstraw says:

    A family claims they were illegally evicted, and Saturday, they broke the locks and started moving back in even though the home has already been sold.


  21. tyaresun says:

    As Iannelli later discovered, Bank of America incorrectly identified her property as vacant and in default, and sent in a contractor to lock and clean out the house.

    But worse, Luke was gone.

    Iannelli searched the whole house, but to no avail: the contractor who “secured” the property had also snatched up her beloved 11-year-old blue macaw. It would be a week before Iannelli was reunited with her feathered friend.


    Bank Mistakenly Starts Foreclosure Process On Wrong House In Kissimmee

  22. clocksun says:

    i know i’m not bringing up anything profound, but i’ve got a question for everyone:

    how many of you…

    (who by now should have realized that the tbtf banks are all–at a minimum–inept stewards of your money, and at worst, criminal enterprises abetted by govt. and guised as legitimate banks)

    …have chosen to do the one ABSOLUTELY EFFECTIVE and DELICIOUSLY SALUTORY thing you can do about it ….

    …. which is: FIRE THEM as I have with my accounts…

    If you have an account with any of them, simply walk in, close your accounts, and transfer your money to a smaller community bank. The United States is populated with several thousand banks. For the vast majority of people, the small banks can provide every service the large ones can. So use the power you do have. Just fire them. Because maybe, just maybe, IF ENOUGH OF US DID THAT, THEY WILL HAVE TO CLOSE THEIR DOORS and leave us alone.

  23. Robespierre says:

    Las Vegas: They foreclosed on the wrong house

    Bank Mistakenly Starts Foreclosure Process on Wrong Home

    by Kelly on March 7, 2008

    Bank Seizes Wrong House: Angela Iannelli Falls Victim
    by Yuliya Talmazan | March 11, 2010 at 11:52 am


    ‘Foreclosure Mills’ Using Wrong Documents may Lead to Wrongful Foreclosure (April 2010)

  24. Andy T says:


    I think one of the reasons you got some pushback on this being a “myth,” even though it clearly is not, is that when one watches the frothy media/blog coverage and the likes of Maxine Waters, one is under the impression that MILLIONS of people are being wrongfully foreclosed on–Waters said this herself on CNBC this week.

    I did a search of the Houston Chronicle and didn’t really find much applicable to this situation. There were, of course, the obligatory anecdotal tales of the folks who have fallen on hard times but were “working it out” with the banks–paper work/modification documents were lost or mishandled by a bank and so the owner got a foreclosure notice. The bank in question halted the proceeding and gave the owner more time to get the documents in.

    Some of the stories you listed above are very unfortunate, but I’m not seeing the MILLIONS of people who are being wrongly evicted or foreclosed on. I’m not even seeing “thousands.” Heck, at this point I’m not even seeing “hundreds” of people who were wrong evicted, but I’m assuming there are at least “hundreds.” Maybe I’m just missing it…

    On the other and, I’m pretty sure there are thousands of titles that are “in doubt” or unclear because of the sloppy nature in which foreclosures have been conducted. Again, I’m doubtful there are thousands of folks who were evicted/foreclosed on while they were not in default. If it was that prevalent, it seems like it would have been bigger news by now?

    Please take note of Curmudgeon’s comments above: “I can’t recall any case of mistaken foreclosure coming across my desk in thirteen years of examining real estate titles and closing real estate transactions. That might be because I wouldn’t have thought much of them, considering how easily they’re resolved. But out of about 6,500 real estate closings I’ve personally conducted, I gots nothing.”

    “….considering how easily they’re resolved.”

    What good is Title Insurance? In Texas, we’re forced to buy Title Insurance at closing. I asked what that extra charge was for and was told it was to “insure” that my title was clear. Don’t most states have something like this?

    If so, isn’t the real problem in the laps of the Title Insurance companies who are on the hook for the mistakes/problems with titles? Isn’t this why it’s more important for the Title Insurance companies to work out the protocols with the banks who are foreclosing?
    FWIW, Here’s a link to the one “local” story on this issue I found: http://www.chron.com/disp/story.mpl/business/7246136.html

  25. mote says:

    Lender’s mistake leads to homeowner horror (Virginia):


    JP Morgan ‘thug’ breaks into home not in foreclosure: report (Florida):


  26. contrabandista13 says:


    It just so happens that I had lunch today with to heavyweight attorneys here in Palm Beach County. They both happen to be close friends of mine….. Between their two firms they are representing over 600 borrowers in foreclosure proceedings. Regardless of the merit of their cases, they advised me that they found a very disturbing pattern in that the banks are being extraordinarily aggressive in pursuing actions on the borrowers who may still have an equity interest in their properties. In other words borrowers who are still above water in their mortgages, many of them who are current. Therefore it comes as no surprise that many borrowers who are current, borrowers who have paid off or are at the tail end of the payment stream, or people who never had a mortgage, find themselves being foreclosed. The banks are in an aggressive mode to sell as much as they can without write-downs. By the same token the fourth person at the lunch, is a strategic defaulter, he has not made a mortgage payment for over a year and a half and has been living in his half million dollar condo, that happens to have a 1.5M principal balance on the mortgage. He’s still waiting for a knock at his door and a notice of lis pendens…
    The attorneys told him not to hold his breath… We all laughed out loud….

    Sick, isn’t it….?

    Best regards,


  27. Andy T says:

    It’s going to be interesting to see how much the “Crowd Query” comes up while combing the intertubes:

    Readers have cited the “parrot” lady and the English landlord a few times. Robespierre cited a case that was caused not by a faulty foreclosure process, but by a firm that made a mistake moving out personal property on a wrong address. That firm is offering $20,000 in compensation but will likely settle in arbitration for much more.

    whskyjack cited a case where the same house was sold at about the same time to two different parties in the San Clemente area. It doesn’t seem like it was the result of a faulty foreclosure process, but rather the result of an escrow company closing on something that it shouldn’t have.

    The story of the family in default who moved back in was mentioned a few times. Interestingly, they did seem to be in DEFAULT and were evicted. The lawyer is citing a difference in principal accounting as the reason the family is moving back into the property. It doesn’t mention anywhere that the family can actually make the monthly payment or is even making the monthly payments. Guess that doesn’t really matter–they got screwed somehow.

    Of the several cases elicited from the “Crowd Query,” Florida, specifically Kissimee Florida, has some problems that seem to be the result of “foreclosure mills” getting sloppy. Seems like those are the firms that local authorities and Title Insurance companies need to vigilant on….

    BofA taking the lady’s Parrot….that was messed up.

  28. FrancoisT says:

    Here’s the whole story of the Eqarl family.
    Danielle Earl with her attorney on Dylan Ratigan show


    If this is not blatant fraud, nothing is!!

  29. GYSC says:

    No idea if my comment will show up in 24 hours or ever but a while back you had a post about “jumping the shark” by a blog. I commented that you saying “buy what you hate” a while back may have been it and you responded that you draw a line between thiefs/crooks and bad management.

    From that post you said:
    “The first group is what I call our bailout bet. And that’s all the companies that I think are horrible companies and I hate their managements. They’re terrible corporations, and we should throw them into the ocean. But we had to hold our nose and buy them, because they were going higher. And that’s Citigroup, Bank of America, and Fannie Mae.”

    And now BAC and FNM may well be huge players in crap paperwork and shoddy corner cutting. And so I ask again, just poor managers or enablers of fraud here? In your interview on the Keiser Report you seem pretty struck by “rampant fraud” even though you made the bailout bets.

    Look, I have no problem with making money, but lets be honest on the game over all, yes?

  30. Jack Damn says:

    Here’s where it all began. This is ground zero:

    ► From This House, a National Foreclosure Freeze

    The house that set off the national furor over faulty foreclosures is blue-gray and weathered. The porch is piled with furniture and knickknacks awaiting the next yard sale. In the driveway is a busted pickup truck. No one who lives there is going anywhere anytime soon.


    All of this is largely because Mr. Cox realized almost immediately that Mrs. Bradbury’s foreclosure file did not look right. The documents from the lender, GMAC Mortgage, were approved by an employee whose title was “limited signing officer,” an indication to the lawyer that his knowledge of the case was effectively nonexistent.

    Mr. Cox eventually won the right to depose the employee, who casually acknowledged that he had prepared 400 foreclosures a day for GMAC and that contrary to his sworn statements, they had not been reviewed by him or anyone else.

  31. Petey Wheatstraw says:

    Andy T:

    The foreclosure process might be SNAFU, and I agree that there is not an epidemic of strong-arm tactics or wrong address evictions, although they seem to have become more frequent, lately. That said, the increase in frequency does seem to indicate that the banks themselves don’t know who owns what (much less being able to prove it in legal terms). There’s also the question of how many homes have already been foreclosed as a matter of judicial expediency — effectively granting the foreclosed home to an entity who, until that moment when a judge ruled in their favor, had no documented legal standing in relation to the property (also note that we now have a piece of property with REAL title problems).

    “Judges also were finding, according to a statewide foreclosure task force that recommended the verification rule, that two lenders would sometimes file suit on the same note at the same time because it wasn’t clear who the true owner was.”


    (citation is from p.2)

    The article is also interesting in light of Curmudgeon’s statement, “….considering how easily they’re resolved.”

    There has never been a volume of lost or inadvertently destroyed title docs anywhere near what’s going on now (I’m certain it will be in the hundreds of thousands, if not millions). This time, it’s fairly obvious that documents were intentionally destroyed as a matter of SOP. They won’t be “so easily resolved” from now on.

  32. Robespierre says:

    @Andy T Says:
    “Of the several cases elicited from the “Crowd Query,” Florida, specifically Kissimee Florida, has some problems that seem to be the result of “foreclosure mills” getting sloppy”

    “obespierre cited a case that was caused not by a faulty foreclosure process, but by a firm that made a mistake moving out”

    How about the other cases I cited or those don’t jive with your defense of the bankers?

  33. wisedup says:

    bloomber video

    Ohio Attorney General Richard Cordray talks about the state’s lawsuit against Ally Financial Inc. Ohio’s suit alleges that Ally’s GMAC mortgage unit violated state consumer law and committed fraud by filing false affidavits in foreclosure proceedings. No particular/personal names but with thousands of instances probably just as well.

  34. Petey Wheatstraw says:


    Oh yeah, title insurance:

    What will be really interesting is when the Title insurers refuse to pay a dime because the defect in title did not exist at the time the title was insured, but was intentionally created afterwards, as a byproduct of the banks trying to get out of Dodge before the jig was up.

  35. whskyjack says:

    The problem with title insurance is it only covers what I paid for the house. Not the money I invested in it to fix the place up. I will often put as much additional money in a house as I paid for it plus time and risk.


  36. whskyjack says:

    My worry is what if I can’t get rid of the house now that I’ve bought it because no title company will touch it?

  37. bergsten says:

    I can think of thousands, if not hundreds of thousands that were evicted, all at once, often with the use of force, often with the use of military force, with no paperwork whatsoever.

    Oh wait.

    That was the “indians” (native americans).

  38. whskyjack says:

    But they didn’t have clear title.

    Which reminds me, I recently inherited part of the old farm stead that my parents bought back in the 50′s They didn’t have title insurance instead the deed was accompanied with a document called an abstract, which recorded every transaction since the land was stolen from the Indians. Well atleast since the original land grant back in 1840 something.


  39. Andy T says:

    Robespierre: Two of your other cases cited were already mentioned previously by another commenter….guess those cases must have been some of the major “hits” on the Google search.

  40. Andy T says:


    Indeed brother! Indeed…..

  41. beaufou says:

    Curmudgeon, is there anything in your existence not consumed by gain?
    Oh wait Andy T has the answer, the libertarian one, let’s suck banks dicks so we can have freedom…real freedom, with guns and gold.
    What a bunch of tools.

  42. gringo says:

    Of course Foreclosure numbers will be down next month and that will signal the housing market is “bottoming” for the nth time. No need to investigate further. It’s time to vote !! The game continues.

  43. call me ahab says:


    what a fucked up thread-

    in the end- all I know is that the people who defaulted on their mortgage payments shouldn’t be in the discussion-

    who’s the owner?

    a lock it’s not the folks who can’t make their payments

  44. mote says:

    Bank changes locks on occupied, foreclosed homes (Florida), (describes several instances):

    “Their laptop computer and MP3 player were missing, as were six bottles of wine. A half-empty beer opened by the intruders was still cold and sitting on the kitchen counter.”

    “In North Port, one family returned home from a weekend vacation and called their attorney in a panic: The front door lock was changed, the alarm system dismantled and family gerbil gone.”

    “Another man went to check on the North Port property his father owned to find his keys no longer worked, magazines moved from where they were in the home, cabinets opened and some tools missing.”


  45. Andy T says:

    “whskyjack Says:
    October 14th, 2010 at 10:28 pm
    My worry is what if I can’t get rid of the house now that I’ve bought it because no title company will touch it?”

    Is that really “your” worry? That seems like an irrational circular argument. If you have clear title to something and a title insurance company has ALREADY insured you, then why should you have a problem? Have you checked your title? Is it clear? If so, there is nothing for you to worry about.

    Or, are you just parroting the talking points of the “millions of people” you’ve heard about?

    Let’s be clear…this a serious problem. But, it also seems to be getting sensationalized in a way that is out of proportion with the reality of the situation. This isn’t surprising as that is the role of media, both new (blogs like this) and old (CBS, NBC, NYTimes, etc…)

    There are DEFINITELY some shitty/horrible stories out there. No doubt. And for every horrible story out there, there will be a good defense attorney to come along and help the cause, as punitive damages can be quite good for the defense attorneys. (Think Jackie Chiles: “I’m mortified, stupefied, horrified…. shocked and chagrined.”

    I’m actually sort of surprised we haven’t heard more stories over the last few years. The timing of the current “uproar” is surely coincidental in nature. It’s not like there are Attorneys General up for a re-election in a few weeks.

  46. call me ahab says:

    . . .and my follow up- tell the banks to go fuck themselves and hand over the deed and push on

    but don’t think that because the banks were slopping it up with paperwork that you have any claim on the property after you defaulted-

    BR- WTF kind of shop are you running here?


  47. bergsten says:

    @ahab — the parrot was probably worth more than the house.

  48. Andy T says:


    “Oh wait Andy T has the answer, the libertarian one, let’s suck banks dicks so we can have freedom…real freedom, with guns and gold.
    What a bunch of tools.”

    Good stuff there beaufeau! I wonder if almighty Barry, the blogger king, will protect Libertarians like me against these ad hominem attacks in his civil and thoughtful space? I wonder if he’ll start to “moderate” or block you now?

    Won’t hold my breath….

    P.S. Neither I, nor anyone in my immediate family, owns either gold or guns.

  49. call me ahab says:


    the parrot- that really got me-

    I mean confiscating him and all- abduction really-

    amber alert?

  50. Petey Wheatstraw says:


    True, for the first part.

    This, though, “a lock it’s not the folks who can’t make their payments,” ain’t necessarily so.

    I can realistically envision properties in limbo for a long time because of this, for reasons previously stated. In the event title defects can’t be cured, he who has, keeps (I remember at least one judgment to that effect, so far, but I’ll be damned if I’m going to look it up). In the same line of thought is, “possession is 9/10ths of the law.”

    Anyway, if two banks decide to fight it out (x however many titles/mortgages), there’s nothing to stop the people living in these houses from eventually being granted title by adverse possession (adverse possession requires a lawful owner with interests counter to those of the squatter. In these cases, who, indeed is the lawful owner, is the crux of the biscuit).

    Unless we have another spate of retroactive lawmaking, these cases could easily surpass the statute of limitations needed to gain title by adverse possession. In FL, it’s 7 years (Florida Code §95.16-.18).

  51. bergsten says:

    @ahab Well, yeah. If you had offered me the house or the parrot, I would have taken the parrot, sight unseen.

  52. hue says:

    AndyT, title insurance is generally required by the lender, I believe if it’s a Fannie or Freddy loan, where the LTV, (loan to value) is above 80%. (It’s been a few years since I’ve originated mortgages.) There are two kinds of title insurance, one to protect the lender. The borrower can buy his or her own title insurance too to protect his or her own interest if there are problems down the road when you find out there were unclear titles before you bought your property. Most borrowers don’t buy their own title insurance because it’s more bucks at closing.

    most of the required title insurance only protect the lender, not the borrower. you won’t find many issues in Texas, because of stringent laws. Texas doesn’t allow cash out refinances above 80LTV. and in Texas, you have to wait 24 hours to close after the final loan docs are produced by the title company, so people have extra time to consider before signing paper.

  53. call me ahab says:


    it’s all good- I know where you’re coming from- but in the end-

    all these folks who thought they got fucked over- AND didn’t pay-

    should just hand over the deed and push on- let the banks resell at a loss-

    no hiding that


    parrot’s have cool qualities- you can walk around with him on your shoulder perhaps-

    and impress your friends and neighbors

  54. Andy T says:

    @hue. Thanks for the background there–appreciate it. I guess, in a way, a lender with Title Insurance, to ensure clear title, also helps the borrower/”homeowner.” As, eventually, the two interests become intertwined….either when the homeowner goes to sell the property or when the homeowner goes to pay off the loan.

    In re Texas: Silly folks there with those “old fashioned” requirements.

  55. kaleberg says:

    It looks like capitalism has failed. The best answer all its backers can offer is to cut living standards, and now capitalism big backers are hacking at the corpse, attacking the basic principles of private property. I love the new motto: Capitalism, 15, maybe even 20 years, better than communism.

  56. hue says:

    lender’s title insurance doesn’t help the homeowner at all.

    let’s say that you closed on your house, then 5 years down the road, you find that the mortgage company doesn’t have the first lien on the house. or the land had been wrongly subdivided years before, and you don’t have rights to the land. the lender’s title insurance pays of the mortgage for the lender and the lender is made whole, and the borrower is screwed. if the borrower bought title insurance, then that policy pays off all the liens and the borrower maintain rights to the property.

    so if people want to buy foreclosed property now in all of this mess, they should purchase owners’ title policies, if insurers are willing to write a policies.

  57. whskyjack says:


    What is circular?
    Title Insurance companies don’t have to write a policy if they don’t want to. They are private companies. Now it is looking as if there maybe a large amount of corruption involved in the foreclosure process why shouldn’t I be worried.
    My title insurance will only cover what I paid for the house not all the money and risk I put into it.
    In case you are one who believes these houses are move in ready, they aren’t.
    The current project , the previous owner removed the furnace and AC all the light fixtures left with the heat off and the water on in December and the bank didn’t take possession until march. So the place froze up the water lines broke and water ran from the 2nd story bath down through the kitchen and to the basement. Fortunately water started running down the street so after a couple of days the city came out and turned off the water.
    Now i knew all this and budgeted for it but still I’m going to have more money tied up in the repair than I paid for the house and I haven’t even been paid for the risk or investment.
    So yep, this crap has me concerned , there are just way too many facts coming to light. Besides I know BOA and I trust them to screw me if they can.
    So if the shit hits the fan my choices are limited.
    I can hire expensive lawyers and let them try to straighten out the mess so the title company is happy or I can take the money from my title policy and write off the investment and hand the keys to the first homeless person I see along with a quitclaim deed.
    I suspect that the latter would be the cheapest for me in the end.
    In reality I would probably turn it into a rental and later abandon it or let my heirs worry about it after I’m dead.

    do I think it will happen?
    Probably not, and certainly not if enough of us raise a little hell about it, so the problems get fixed now(if there is a problem)
    But it is another layer of risk for me to worry about.


  58. Snickers says:

    Cheers BR. If you are serious about this, post the solicitation daily for a week.

  59. whskyjack says:

    Re: to the parrot abdution,
    Hey parrots are people.
    Dogs and cats are pets
    So I would say amber alert at least, I told the wife about it a while ago and she muttered something about kidnapping and the death penalty.
    parrots are a serious subject around here.


  60. Andy T says:

    @hue. You sort of make the point for me there. Isn’t the economical rationale of the lender taking on insurance to make sure he is made “whole” in case there are other liens on the property? The lender didn’t take on the insurance to just “feel good about himself.” He took it (the insurance) on to make sure he was going to be “whole” and clear on the property so that he could resell the property to a “homeowner/borrower.”

    In the case you describe above, the homeowner shouldn’t have a problem because the lender has been made whole via his insurance–the liens were paid off by the title insurance company. If the homeowner is then not subsequently made “whole” by his lender, he should have a straightforward lawsuit on his hands. i.e…. The lender sold him a piece of land that he didn’t rightfully have (to sell) as there were unknown liens on the land/property. The lender has now paid off those liens via his Title Insurance contract. Therefore, he should now have clear title to the land he sold me. Therefore, the homeowner/borrower should now have clear title.

    It seems that, at the end of the day, and on the potential doorsteps of the courthouse, Title Insurance would inevitably be a benefit to the borrower/homeowner.

  61. Andy T says:

    @whyskyjack: Fair enough point. I understand what you’re saying…the case of the extreme fixer-upper will be a bit different.

    Have no worries, though…I don’t think you’ll need an “expensive lawyer” to remedy it for you. There is a surplus of attorneys out there and the banks will now become easy targets for these types of cases in the future. Lawyers will be calling you…not the other way around.

  62. bergsten says:

    Here’s a fun question (pity everybody else is already asleep)…

    I know that Title Insurance covers the lender. In fact, if one does a refi, they write (and charge for) a whole new policy, even if the refi is through the same bank.

    So, who exactly is covered by the policy in force in these securitization transfers? Anybody at all?

  63. Swarm The Banks says:


    Texas has been hit hard by mortgage servicers going after the elderly. The servicers pay off legally delayed property tax bills then bill the elderly homeowner and take the home when they can’t pay.

    The mortgage servicers also will tack on new insurance premiums and raise the monthly mortgage rates even if the home is already covered with an insurance policy.

  64. Swarm The Banks says:


    All gov dot com reports that the mortgage servicing industry was hiring thousands of completely unqualified people to help with foreclosure processing duties.

  65. Swarm The Banks says:


    Chase Bank admits to “parallel foreclosure”, a process that all home loan modification applicants go through to accelerate the home foreclosure process whenever a homeowner applies for the HAMP program.

  66. RadioFlyer says:

    While the Nevada example (Nelly Mauck) has some shady elements (not least, snowboarding trips when you can’t afford to pay your mortgage), the fact is that the eviction appears to be wrongful, and the result of a realtor/eviction company mix up, not the lender. And it doesn’t appear that her place was foreclosed on – but that doesn’t stop the Las Vegas Sun from using the title “They foreclosed on the wrong house”.

    [BR: No, your statement is wrong. She wasn’t in foreclosure, this was an error. ]

    All that said, the best part of that story is that Nevada seems to have gotten it right – triple damages for personal and real property loss/damages. Sounds like a fantastic solution to me.

  67. hue says:

    Andy T, but if title insurance can’t clear the lien, then the insurance will cover the mortgage for the lender. the homeowner is still stuck with the lien. i guess i was just answering your 9:15 p.m. question about why title insurance is required. (i goofed about the 80 LTV earlier, i got that confused with PMI.)

    it is the lender, which requires title insurance (not any state or federal law), to protect the money it is lending you, the borrower.

    sorry BR, this is not an example of a f’ed up foreclosure.

  68. Dr. Goose says:

    Overheard at Bank “X”:

    “The legal procedures we went against
    In the throes of our animal sentiments
    Were finally exposed
    When we tried to foreclose
    On homes that we never had lent against.”

  69. hue says:

    bergsten, i’m guessing companies like Ambac MBIA sell insurance for securitizations and trusts, don’t think title insurance is involved.

  70. wisedup says:

    more indicators along the lines of WTF?

    “A news report from Jacksonville, Fla., where Fidelity National is based, said Charlotte, N.C.-based Bank of America, the largest servicer of residential mortgages, had offered to cover the title insurer’s costs from any errors made by bank employees processing foreclosures.”

    la times

  71. Basilisc says:

    The thing which will turn this into a major crisis is not (unfortunately) the wrongful foreclosures. Bankers can always claim that these are just isolated incidents, the market is huge, mistakes happen, we don’t want systemic risk, etc, and the Treasury, Fed and Congress will as always defer to them.

    What will turn this into a major crisis is the lawsuits by investors in RMBS and CDO-of-RMBS, who will be outraged at having their payments reduced or stopped because of foreclosures based on faulty documentation.

    Unlike the foreclosed homeowners, the investors have access to competent, focused, resource-rich legal counsel, who will demand proper documentation and procedures for every foreclosure that has implications for their asset values, and who won’t be scared off by the big banks’ lawyers. If the documentation and transfer problems are as bad as everyone says, and it’s becoming clearer by the day that they are, the number of investors that will be hit and the size of their potential exposures will be huge.

    That’s how it is in our winner-take-all, top-0.01%, post Citizens United world. The only conflicts that matter, and the only injuries that matter, are those that affect elites. And since the foreclosure mess directly affects some of the elites, this has the potential to be a very big deal.

  72. Basilisc says:

    … or even if the investors don’t care about foreclosures, they will see an opportunity to wipe out their RMBS losses by questioning the validity of the assignments (the Rosner scenario). And, since they have access to smart lawyers, the banks won’t be able to laugh this off as they can with foreclosures. This is why we’re well and truly f—ed.

  73. Note: I pulled the 20 off topic comments for now, and want to return to the question at hand (those will reappear after 24 hours)

    I am looking for specific examples of errors that either a) reveal Fraud or2) show that these current errors are only minor (not fraudulent) at best. What Fubars, Snafus and legal glitches are there ? (please give links)

  74. dead hobo says:

    Common sense should have told you weeks ago that the 5 bizarre events you have been citing are only far outliers. If a 6th happened it would have been front page internet news. Ditto with the seventh and so on. Even ZH wouldn’t have fallen for the above, given the paranoiac tilt over there (still excellent news source though, my favorite).

    My reversal in attitude comes from the said disappearance of mortgages and lack of proper filings of security interests. This problem, if true, is massive but not nearly as sensational. At least until or unless it clouds the derivatives packaged and sold using fake security interest assurances. If Joe Halfwit recent;y signed foreclosure documents but the documents were otherwise OK, who gives a fuck? If, however (possibly another myth), Joe Halfwit tossed out everything that was over 5 pages, then look out below.

  75. Again, to remind you of the question at hand:

    What examples can you find of massive foreclosure errors ?

  76. Mannwich says:

    @red herring, I mean RadioFlyer: Are you trying to be wilfully ignorant?

  77. W_Nelson says:

    Ritholtz, you underestimate the power of lifer bureaucratic types/organizations to slime their way out of accountability. Throw in tacit Government approval/protection…. for heaven’s sake, if they got cover on their 2007 adventure, they’ll sure as hell get cover on this.

    This will never go anywhere. You don’t slag the boss’s Golden Boy.

  78. RadioFlyer says:

    BR: “It’s never happened before on a systemic basis.”

    That’s probably true – but also an important qualifier that you don’t seem to make very often, if at all, and certainly didn’t make during the last two minutes of outrage on Kudlow on Monday. And it also kills the argument that 100% perfection in the system is either achievable, necessary or reasonable to expect.

    Also, please define systemic. Sure, it seems like it’s probably happening more than in the past – but the volume of foreclosures is also historically high. Not excusing the errors, just pointing out a fact – and maybe the “error rate” per foreclosure is actually not all that different?!? I’d still like to see somebody put a real number on it – are we talking dozens, hundreds, thousands, tens of thousands? I suspect it’s in the hundreds range – but again, that’s a pretty low number when you’re talking about millions of foreclosures. And in every one of those cases, I’m all for the banks and/or whoever made the mistake being on the hook for a very, very large fine.

    Please note, I am referring to the “foreclosure mess” from the borrower/homeowner to servicer relationship perspective and am not referring to the mess from the servicer all the way through to the investor. That certainly seems like it could be a heck of a lot messier.

  79. RadioFlyer says:


    Not at all. Are you?

  80. bernandoo says:

    CitiMortgage “misplaced” my note. I went to refinance earlier this year and was told that the bank could not find my mortgage. The bank eventually found it three days later. Makes me wonder what would have happened if I had stopped making payments.

  81. Petey Wheatstraw says:

    RadioFlyer Says:

    “And it also kills the argument that 100% perfection in the system is either achievable, necessary or reasonable to expect.”

    Same can be said for any law, or set of laws. To argue that there can be perfection in anything is absurd. The difference here is that such actions by the banks not only violate the law, they are committed under the color of law. In doing so, and with apparent impunity, they expose, clearly, the corporatist underpinnings of our government.

    Let me ask you this: If a private citizen moved into a REO property, would their eviction be pending a civil suit, or would the local constabulary put them out and charge them with breaking and entering, or some similar crime?

    As for folks not paying their loans, either to the lender or the servicer, why have the banks had to resort to criminal fraud — even in cases where nothing so egregious as the unlawful eviction of the resident has taken place — in order to assert their CIVIL claims on any given property?

    Lots of folks are being called deadbeats, when, in fact, they might not be. The FACT is, that in many of these situations, the borrower has NO LEGAL COUNTERPARTY. DOCUMENTS WERE DESTROYED. DOCUMENTS WERE FORGED. This is not the doing of the borrower, nor is it a mere technicality. Certainly, the banks could, theoretically, cure the defect in title they themselves created in their effort, via securitization, to wash their hands and clear their books of loans they KNEW AT INCEPTION were going to default, but if they take a legal step to do so, they immediately incriminate themselves for being involved in an even deeper quagmire of criminal activities. “Lost Document” re-establishment of the chain of Title will not work, as only a complete idiot would believe that the sheer number of missing documents were lost (or destroyed as an act of god — fire, flood, etc.).

  82. clawback says:

    Um, hello? Giving workers the wrong address isn’t at all the same thing as a bank having records showing that such-and-such person at such-and-such address is in default when in fact they don’t even have a relationship with the foreclosing bank.

    The 1987 story is about a family that owned 2 houses, on one of which they were delinquent on the mortgage. The bank simply mixed up the two addresses, but they OWNED the mortgage on both properties and had records to prove it.

    Barry, no need to modify your argument yet.

  83. Tarkus says:

    I think a better question is – are the banks who are foreclosing on these properties legally in possession of the property – able to produce (legally) all documentation the courts require.

    If so, then the foreclosure is fine. If not, and they foreclosed, then that would be “foreclosure error” until the legal documentation was satisfied.

  84. Jojo says:

    This being The Big Picture blog, I think that many seem to be missing TBP.

    Assuming the bank payment records are correct, the people foreclosed on weren’t making their mortgage payments. From the banks perspective, this was a real and valid reason for proceeding with the foreclosure.

    Any missing paperwork was viewed as a minor problem, whether legally correct or not. In fact, the paperwork may have been missing when the loan was originally sold! So robo-signing wasn’t viewed as anything unusual.

    I’m confident that there have been numerous cases in the past where the courts or government overlooked or minimized a faulty paper chain in mortgages. Are the government/courts REALLY going to hold the banks feet to the fire now? I doubt it. I think some way will be found to minimize any impact on the banks and to ensure that this problem gets buried and disappears. Politicians are not going to spit in the face of their big campaign contributors to help a few little people who again, didn’t make their mortgage payments, get free houses.

  85. wisedup says:

    can you comprehend what you read RF? You are approaching troll status.

    repeat after me
    what happened in 1987 was not associated with fraud or the willful destruction/alteration of documentation.

    repeat after me
    This is not a mess, it is criminal fraud on a massive scale and it directly undermines the confidence of public in the economic/social foundations of the country.

  86. Transor Z says:

    I count 45 civil cases in Suffolk County, Massachusetts in which MERS is listed as “Other interested party” and 7 in which MERS is a defendant.

  87. You make a good point JoJo. The foreclosure mess is as much the fault of the court systems that overlooked for many years what they knew was going on. All was swell, so long as the deadbeats got evicted. Now the politics have changed. Deadbeats are now friends and neighbors, and most importantly, voters. So apparently, the interpretation and application of the law is changing to better suit the politics of the court.

    I think it’s called “rationalization”, and it’s a powerful common thing.

  88. @Manny, on a previous thread. Indeed, I was in the biz. Until I had to shut the operation down to tend to my ailing son. He’s better now, but I’m not getting back in it. This is utter insanity.

  89. RadioFlyer says:

    @ Douglas Watts: If you read what I wrote, you would see that I do in fact “understand this” – and I clearly made the point that I have not seen the evidence that this is occurring at “orders of magnitude” greater than in the past. And again, what I am referring to here is the occurrences of “mistaken” or “erroneous” foreclosure/eviction, which is the subject of this post.

    I realize that many here and elsewhere believe that every foreclosure is suspect, based on lots of anecdotal evidence – but I’m not convinced that it’s that bad.

    Also, I never made the defense that since something was (illegally or mistakenly) done in the past, it’s okay to do it now. Where did you get that?

    @Petey Wheatstraw, RE: “Same can be said for any law, or set of laws. To argue that there can be perfection in anything is absurd.”

    I completely agree. That comment was directed at BR and others that claim that nothing less than 100% perfection is the only acceptable standard.

    And sure, a deadbeat may not technically be a deadbeat because of a lost document, or whatever else happens after they sign the note and mortgage – but that doesn’t mean that they aren’t a deadbeat.

  90. Alex says:

    I believe the incidents mentioned above are symptoms, not just problems in themselves.

    I was also very puzzled how these events could occur. How doe the bank EVEN know about any of these homes?

    I believe the answer is fraudulent document manufacture. If the nimrod that is doing this, gets the address wrong, calamity will ensue. They are doing these manufactures so rapidly, it is leading these kinds of problems. So there is the explanation for this “impossible” series of actual occurences.

  91. RadioFlyer says:

    @wisedup, RE: ”You are approaching troll status.”

    Well then I guess I’ll be moderated soon enough for not being on the mutual admiration society bandwagon.

    Re: “This is not a mess, it is criminal fraud on a massive scale and it directly undermines the confidence of public in the economic/social foundations of the country.”

    I skipped law school, but why don’t you read this definition of fraud, and then give me a single example from this “criminal fraud on a massive scale” as you and so many others are calling it. I’m sure there was plenty of fraud on the origination side – not so much the foreclosure side.


    If you have reading comprehension difficulties with respect to “justifiable reliance by the alleged victim” or “injury to the alleged victim”, maybe an attorney can help you out.

  92. Mannwich says:

    @Curm: Glad to hear your son is going better. I agree that this is utter insanity, but the insanity started long before now (as you are well aware). It’s just a continuance (and a result) of everything that’s gone on, proving that nothing has really been truly fixed.

  93. Mannwich says:

    getting better, rather. Good to hear though.

  94. RadioFlyer says:

    @Petey: No, I’m not saying the bank/servicer/whomever should be taken at its word. I am saying that as a borrower, you know darn well whether you have a mortgage or not. Do you ask to see a copy of your mortgage/note every month before you make a payment? Of course not.

    OK, so it comes time to foreclose – again, you know whether you’re in default or not. If the foreclosing entity can’t come up with the proper docs showing ownership of the note, then sure, the foreclosure should be delayed until such documentation can be found – whether it’s the original, or a LEGAL reproduction/substitution for the documentation. I would guess in most cases, there is sufficient paperwork/other evidence of the note and mortgage in “the system” – whether it be documents recorded with the municipality, copies held by the closing attorneys and/or title companies, payment history and other docs held by the servicer, etc, etc.

    Won’t be cheap, and it probably shouldn’t be – but it can/will get done.

    As I said, I’m not an attorney, and maybe the banks did screw themselves on a whole bunch of loans, but if we are counting on the chaos of the past few years (bank failures, mortgage originators folding, etc.) to release people of their obligations, then you’re just asking for the final act of Fight Club – and I don’t want to go there.

  95. “Curmudgeon, is there anything in your existence not consumed by gain?”


    Nah. Nothing. Not the year I just spent nursing my son through his second bone marrow transplant, shutting down my office because of it. Indeed, I did it all because I was consumed by gain.

    Fuck you.

  96. AG Sage says:

    We do want the banks to be able to foreclose on the houses in arrears. Especially because the banks don’t actually want to as part of Extend and Pretend. ;-)

    Seems like the system needs guidance out of this mess from the Feds whether it’s a state level process or not. But every single case circumstance type needs its own repair. Recover right to foreclose out of MERS when bank still can locate original loan agreement on paper, needs a different repair than originating bank no longer exists, needs a different repair from original documents were destroyed, etc.

    Yet again, some people don’t want to hold the banks responsible for screwing around and are happy to wave distractions like,” but but but, they deserved to have fraud committed against them by bank of america” as an excuse to do nothing. Maybe we can move ahead to working out a industry wide solution, so that the deserving debtors stop distracting from the well-deserved, and well-overdue jail time.

  97. RadioFlyer says:

    Looks like Mauck did in fact lose the place a couple months (in what appears to be a vaild foreclosure) after the LV Sun article was written: http://lasvegas.blockshopper.com/property/17604710309/8000_badura_avenue_unit_1157

    Here’s the Clark County foreclosure sale record:
    (Interestingly, there is a Recorders Memo that says “Possible poor record due to quality of original document”. Not sure what that means, but could be interesting.)

    Also, the Clark County Clerk appears to show a Breach Notice to Nilda and John Mauck in April 2009, followed by a Lien filed in August, then a Default filed in October. Which jives with HER statement acknowledging that she was “behind on her mortgage payments”.

    Anyway, I haven’t seen an updated or new news article anywhere mentioning the “ongoing travesty of a mistaken foreclosure” or something similar. Something tells me that the news media would be all over this one if there was an “unjust foreclosure” story there.

  98. [...] The seemingly bottomless pit of greed, corruption, incompetence and criminality that marked the real estate boom of the last decade has now disgorged a fresh set of evils. Just as we learn that banks foreclosed on over 100,000 homes for the first time in September, reports of “robo-signers” pressured to forge signatures, backdate documents, swap Social Security numbers, inflate billings and pass around notary stamps as if they were salt have called the entire foreclosure process into serious question. While banks have gone to great lengths to point out that borrowers subjected to foreclosure were as much as 18 months in arrears, this is a red herring. This is a question of law, and these foreclosure methods, if true, represent clear cut fraud and provide a foreclosed homeowner a ready basis to invalidate the foreclosure and sue for damages. Of course, being current on your payments or owning a house free and clear of a mortgage is apparently no guarantee that you won’t be foreclosed. [...]