Consumers can be greatly impacted when lenders file foreclosure actions against them. Thus, one would hope that mortgage lenders would do everything they reasonably could to make sure that they only bring such actions against a homeowner when it is proper. Recently, a mistaken foreclosure action led to an interesting role reversal. Specifically, it led to a mortgage lender being threatened with a seizure of assets for failing to pay a debt.
The case involves a couple from Florida. Reportedly, in 2009, the couple purchased a property in Naples. The couple reportedly did not take out a mortgage to purchase this property, but rather bought it with cash.
Thus, it likely came as quite a surprise to the couple when a bank mistakenly filed a foreclosure action against them in connection to this property. The couple contested this action in court. They succeeded in their challenge.
The couple then asked that the bank be ordered to pay them money for attorney fees. The couple's request was granted by a Collier County judge.
However, the bank allegedly failed to pay the couple. The couple then took legal actions to seize property from the bank in connection to this debt. This reportedly resulted in the couple's representative and two police officers arriving at an office of the bank last Friday to perform a property seizure. In response to these actions, the bank paid the couple the money that was owed in connection to the court order.
Thus, this case led to the interesting situation of a homeowner threatening a mortgage lender with foreclosure. One hopes that this case serves as a reminder to lenders to exercise appropriate care when filing foreclosure actions and to comply with court orders. If lenders fail to do these things, it can result in consumers suffering harm.
Source: The Miami Herald, "Fla. couple threatens bank with foreclosure," Tamara Lush, 6 Jun 2011