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Mortgage lender's mistake leads to wrongful foreclosure

Florida homeowners who are struggling financially may be at risk of losing their homes even if they miss only one payment. That may sound harsh but, as we've all seen, some lenders have been quick to foreclose in some cases even when they have not met all the legal requirements to do so.

Because of the enormous number of backlogged foreclosures in Florida, the number of mistakes by mortgage service providers is not small. It is a disturbing problem in the aggregate, but it's important to remember that wrongful foreclosures affect real people who will lose their homes when banks make mistakes. And, when mistakes are made, some mortgage lenders are known to be unresponsive and extremely difficult to deal with.

Take the recent case of a Minnesota woman who is currently dealing with a wrongful foreclosure by CitiMortgage, Citibank's mortgage division. CitiMortgage, which currently holds the mortgage, claims that the homeowner missed a single payment of $584 two years ago and is foreclosing based on that missed payment, along with associated fees and penalties. The homeowner denies she has ever missed a payment.

The homeowner has some strong advocates on her side. Her local bank, which originated and services the loan, says that she has made all of her payments on time. The Minnesota Attorney General's Office has evaluated her case and has written a letter to CitiMortgage saying ""this office does not believe that [this] home should be foreclosed upon due to a problem that resulted from one allegedly missed mortgage payment."

Since the home is in the foreclosure process, however, CitiMortgage says she cannot get out of foreclosure unless she pays the entire amount required to bring the loan current, so they have refused to accept her last six payments. She now owes $6,000.

The homeowner has repeatedly tried to work with the bank to the resolve the error, but despite all of the proof that she never missed the payment in question, CitiMortgage has refused to even discuss the matter with her.

"I did nothing wrong. This is very frustrating," the homeowner told a local consumer advocacy reporter.

This story shows just how much disarray the current lending and foreclosure systems are in, both here in Florida and nationwide. Florida homeowners who are facing foreclosure should consider seeking the help of an experienced attorney who can take lenders to task for wrongful foreclosures.

Source: Star Tribune, "Bank forecloses even though experts say homeowner made all payments," Randy Furst, Nov. 14, 2011

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