Friday
November 21, 2014

Foreclosures Errors Found to Be More Widespread

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Foreclosures Errors Found to Be More Widespread

About 30 percent of more than 3.9 million households whose properties were foreclosed on in 2009 and 2010 nearly lost their homes due to potential bank errors, government regulators said. 

Nearly 1.2 million borrowers faced foreclosure notices even after not having defaulted on their mortgage, being protected under federal laws, or having been in good standing under bank-approved plans to either modify their loan or temporarily delay their payments, according to a report from the Huffington Post. Of those borrowers, more than 244,000 did eventually lose their homes, new government data shows. 

The government breaks out the data more fully of those who faced foreclosure due to errors, including: 

  • Nearly 700 borrowers who faced foreclosure during 2009 and 2010 never defaulted on their loans.
  • More than 28,000 faced foreclosure who were protected under federal bankruptcy laws.
  • About 1,100 who faced foreclosure had been meeting all the requirements of forbearance plans that their lender had agreed to. 
  • About 1,600 borrowers who faced foreclosure were protected by the Servicemembers Civil Relief Act of 2003, which bans foreclosures on active-duty military personnel and their families. 

Payments have started being mailed this week to many of those affected, after about a dozen financial institutions agreed to make $3.6 billion in cash payouts to more than 4 million borrowers who potentially faced wrongful foreclosures from 2009 and 2010. 

Source: “Foreclosure Review Finds Potentially Widespread Errors,” Huffington Post (April 9, 2013)

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