The Latest Wave In The Foreclosure Crisis? Another Bank Branch Foreclosed Upon By Borrower

by:  Peter J. Gallagher

Several weeks ago, we brought you the story of a Philadelphia man who foreclosed on his local Wells Fargo branch ("Turning The Tables: Philadelphia Man Forecloses On Wells Fargo Branch") after the bank failed to pay a judgment the man obtained against the bank for violating the Real Estate Settlement Procedures Act.  The bank eventually paid.  Well, now it has happened again. 

In Florida, which should just change its name to the "Foreclosure State" at this point, a couple recently received a foreclosure complaint from Bank of America.  Nothing too strange in this day and age, except that the couple had paid for their home in full and in cash when they purchased it.   As the Naples News reported — in the cleverly titled "Tables Turned, Bank Pays Up In Mistaken Foreclosure Case" — the homeowners were forced to hire a lawyer, who spent weeks on the phone and in court before the case was dismissed, costing the homeowners $2,500 in legal fees.  The court ordered the bank to pay these fees, but after five more months of phone calls, neither the bank nor its local counsel had paid.

This is where the story gets interesting.  The homeowners' lawyer obtained a writ of execution from the local sheriff in connection with the debt and took it with him — along with local media, sheriff's officers, and a moving van — to a local Bank of America branch and demanded payment or the branch would start losing furniture, money in the cash drawers, and any other assets needed to satisfy the debt.  Not surprisingly, the branch manager quickly cut a check to the couple for the outstanding amount.  In a written statement, Bank of America apologized to the homeowners and did the only thing it could do, blame the law firm that had been representing the company, which has since gone out of business, for failing to respond to the homeowners' requests.

New Suits Allege Real Estate Brokers Imposed Illegal Duplicative Charges

by:  Michael L. Rich

The New Jersey Law Journal reports the filing of three putative class actions on March 16, 2011 alleging that real estate brokers defraud buyers and sellers by charging administrative fees for services covered by commissions.   Specifically, the suits allege that Weichert Realtors and Prudential Real Estate Affiliates impose administrative fees of $200 to $275 on real estate transactions, notwithstanding the U.S. Department of Housing and Urban Development declaring last year such fees illegal.  One suit filed in U.S. District Court in Camden, New Jersey alleges violations of the Real Estate Settlement Procedures Act.  The two suits filed in Burlington County Superior Court claim violations of the state’s Consumer Fraud Act and the Truth in Consumer Contract, Warranty and Notice Act.  More details to follow.