Miscommunication between Banks can lead to "Mistaken" Foreclosures
As millions of American homeowners continue to deal with a struggling economy and a poor housing market, more and more of these individuals and families now have to contend with another problem: a breakdown in communication between banks that service mortgages. Not only does this miscommunication bring frustration, it can also lead to mistaken or even premature foreclosure in spite of a pending mortgage modification application.
This communication breakdown can occur between banks or servicers that are participating in the Obama Administration’s Making Home Affordable Program, despite provisions that prohibit servicers from auctioning a person’s or family’s home while a mortgage modification is pending. The article indicates that the lapses in communication that can lead to premature or mistaken foreclosure continue to occur because they go unpunished for the most part. USA Today indicates that the U.S. Treasury Department is reportedly aware of such problems and is “moving to fix them.”
In a ProPublica news report on the topic, the breakdown in communication between servicers generally occurs due to their organizational structure. The ProPublica article points out that one division normally deals with modifications while a separate unit contends with foreclosures, presumably leading to both internal and external communication problems.
"Basically, you have the right hand at the mortgage company not knowing what the left hand is doing," said Mark Pearce, North Carolina's deputy commissioner of banks. Communication glitches and mistakes are "systemic, more than anecdotal" among mortgage servicers, he said.
Although miscommunication between mortgage servicers does occur, having the assistance of an experienced team of mortgage modification professionals that will aggressively ensure that the servicers communicate properly can help prevent such tragedies from coming to light.
If you are a homeowner in need of assistance with a foreclosure, contact an experienced foreclosure attorney to discuss your situation.
Homes can be lost by mistake when banks miscommunicate – USA Today
Disorganization at Banks Causing Mistaken Foreclosures – ProPublica
Link to the Obama Administration’s Making Home Affordable Program
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