Foreclosuregate Update: BofA forecloses on homeowner who never missed a payment

Posted by AzBlueMeanie:

Bank of America is threatening to throw a West Hartford, CT family out of their home even though the couple never missed a mortgage payment. Bank Of America’s Christmas present: Foreclose Even Though Not A Payment Missed | Connecticut Watchdog:

The largest bank in the United States earlier this month notified Shock Baitch and his wife Lisa (Friedman) Baitch that foreclosure action will start today – Christmas eve – unless the couple agrees to put their home up for a forced sale.

Why?

Because another unit of Bank of America erroneously reported to credit agencies that the family was seeking a loan modification, ruining their credit rating and as the result putting their mortgage into default.

All this is happening even though the bank – after admitting it erred and sent a letter of apology in September – handed this case to a special unit at Bank of America that is charged with dealing with severe customer issues. It promised  to notify the credit reporting agencies that the couple were not deadbeats, but were good credit risks.

“I have never seen a case like this,” said Manchester attorney Wendell Davis, whose office handles many foreclosures.

Davis said he thoroughly checked Baitch’s records and found that all his and his wife’s allegations were accurate.

“They have never even been late on a mortgage payment,” said Davis this morning in an interview.

Davis, a member of the CT Bar Association’s foreclosure committee, said he is preparing a lawsuit to protect his clients because it’s the only way to hold Bank Of America accountable for its actions.

Bank of America representatives have yet to respond to the last issue.

* * *

Baitch’s story began about a year ago when he and his wife wanted to refinance their home in order to pay for improvements and to consolidate their debts. Baitch is a firefighter.

They spoke to a BofA loan specialist and asked for the cheapest refinance option. The loan specialist tentatively put them into the “Making Home Affordable program,” which unbeknownst to the couple would signal to the credit world that they were in financial straits.

When the couple received a package of papers to sign, they decided to go with a conventional mortgage because they did not want to have to add escrow costs and home insurance to their mortgage payments, not because they were aware of the ramifications on the loan program.

But it was too late. Shortly after that, in April, Baitch’s wife (whose name is on the mortgage) received a letter from BofA telling her that the credit limit on one of her credit cards was reduced to $18,800 from $30,000. The two weren’t worried because they had plenty of credit available on other credit cards. Baitch said he just figured that the bank was tightening everyone’s credit.

It was only after his wife started receiving notifications from other creditors that several of her other accounts were being closed that the couple discovered what had happened.

Their bank, Bank of America, had reported to credit bureaus that they were in a loan modification program. That was a red flag to many creditors, which either cut their lines of credit or placed their debts in the highest interest rate category – the Universal Default rate.

Baitch met several times with Bank of America managers who promised to correct the erroneous credit report, but were told it was too late to refinance her mortgage because their credit scores had been damaged.

“I begged them that they can’t do that in this case since they destroyed our credit scores,” Baitch told me. “Although they admitted to making the mistake, I was told they cannot change the underwriting rules. So, in a nutshell, the other creditors will not reinstate the old credit limits because they use the current credit reports, BofA will not help because they use the current credit reports, and my monthly minimum payments have more than doubled because of the Universal Default rate.”

“Bank of America lied and submitted fraudulent information to the credit bureaus and now I am literally and financially paying for it,” Baitch said. “I looked into help with a consumer counseling service, but we can’t participate because our income is too low to meet the payment requirement. I looked into bankruptcy, but we have too much equity in the house. I cannot meet the minimum payments now on the credit cards and may have to default. I am in a situation that I should have never been in since [the bank] destroyed our credit and ability to refinance. All our debt should have been consolidated and I should have positive cash flow monthly not negative.”

Bank of American spokesman T.J. Crawford confirmed Baitch’s story last fall when I wrote about it.

Once the call was made about the Home Affordable modification, “her account was coded as being in current status on payments but in a trial modification making partial payments,” he wrote.

“Bank of America apologizes for any inconvenience this has caused,” Crawford said, adding that the bank is working on restoring the credit limits on her Bank of America accounts and that the couple can later ask to have their credit limits reviewed by other credit card companies.

That is not enough for Baitch, who calculates that the false report has cost them $150,000 in lost credit. Earlier this week he tried to find out how he could avoid foreclosure[.]

Mr. Baitch describes getting the proverbial run-around from several departments at BofA and conludes:

“So, in summary, BOA is threatening to proceed with foreclosure on a house that was NEVER late or in risk of default. No one at BOA can find where this letter came from, but admits, that somewhere in there system, some department at BOA thinks we are to be foreclosed on. This is just proof that BofA is far too large to be of any benefit to themselves or the consumer.”

If you have experienced a similar problem, be sure to contact the Arizona Attorney General.