In Florida, a couple that paid cash for their home, and never had a mortgage was foreclosed on by Bank of America. It took 18 months to straighten out and Bank of America agreed to pay the legal expenses of the homeowners.
When the bank did not pay the couple, they foreclosed on Bank of America. A Judge authorized a deputy to seize desks, copiers, and computers that could be sold to pay the expenses.
The foreclosure nightmare started when Warren and Maureen Nyerges paid cash for a home owned by Bank of American in the Golden Gate Estates. They never had a mortgage whatsoever. But, the bank fouled it up and wound up issuing a foreclosure through their attorney.
The couple took their case to court and after a year and a half nightmare the foreclosure was dropped. A Collier County judge said Bank of America has to pay the couple’s $2,534 legal fees for the error. After more than five months the bank still hadn’t paid up. So, the homeowners’ attorney did just what the bank would do to get their money, legally seize their assets.
“I instructed the deputy to go in and take desks, computers, copiers, filing cabinets, including cash in the drawers,” Attorney Todd Allen told WINK News.
Outside the Bank of America on Davis Boulevard, several deputies stood by with movers ready to start hauling out the bank’s office supplies and furniture.
Inside, the homeowners’ attorney was locked out of the bank manager’s office by deputies while the bank manger tried to figure out what to do.
After about an hour the bank finally cut a check to satisfy the debt, and no furniture was taken. A representative for Bank of America issued a statement saying they are sorry for the delay in issuing funds. They claim the original request went to an outside attorney who is no longer in business.
Sensational cases like this make all the headlines, but are statistically meaningless, with a bordering on zero percentage.
That said, I side with the couple. Indeed I think suing for expenses only is a travesty of justice. Something like $100,000 would be more appropriate.
It is preposterous that it would take 18 months to determine there was never a mortgage. Unfortunately, that is how fooked the system is. Alternatively, that is how fooked Bank of America is. Most likely, it’s both.
That said, two wrongs do not make a right. Letting people live in houses for years without payment is simply wrong. Either MERS is valid or not. Adding to the confusion, differing courts in differing states have ruled differing ways.
Fixing the Structural Problems
Sadly, I see little effort by anyone in proposing a solution to the mess. States Attorneys General want $17 billion in fines, but how do fines resolve the basic issues at hand? Are big fines justified? Why? How much?
I discussed some of the key issues in Foreclosure-Gate Screw Tightens: Banks Face $17 Billion in Suits Over Foreclosures; Common Sense Says $5 Billion is Very Generous
I failed to discuss one key issue: recording fees. Cities and counties may be entitled to back fees. I will leave that to the negotiators to decide.
To arrive at $17 billion, one would have to do something like charge a $5,000 to $10,000 fine for every missed recording fee. If that math is correct, I find that proposal preposterous. Note: I did not do the math, I read the number in a couple places.
I really do not care what the math is, I just want to see it.
Once again, I do not object to huge fines for complete blatant stupidity as depicted by Bank of America in the above article. If there are more cases than I think, so be it.
The Way Forward
First we need to start with a realistic assessment of errors and a breakdown of how serious those errors are. In the above instance, it is clear there was a severe error, and an errors that should have been rectified in 2 days, not 18 months. I do not object to punitive fines in such instances.
Second, we need to see a proposal as to what to do about MERS. Instead, I see cases like the above trumped up as if they are common, and I see people clamoring to give homes to people free and clear because of a messed up MERS and “show me the note” objections.
The current focus is not on justice, but rather maximum punishment.
Those who want the courts to conclude that MERS has clouded every title, better be careful of what they wish. Should that be the ultimate ruling, no one who owns a home that went through the MERS system will currently have a valid title.
Want to sell your home? Sorry you can’t. Want to buy a home? Sorry, you better not because the title will be clouded. This is serious stuff. If the MERS opponents get their way, Housing in the US would literally shut down.
In their desire to punish banks and let people live in their houses for free, few have bothered to figure out the severe consequences on innocent parties who simply want to sell or buy a home.
Punishing the banks to the maximum extent possible to slay the evil MERS dragon, consequences be damned, should not be the focus. Instead, we need to determine actual damages before sensible fines can be levied. Meanwhile, and far more importantly, we need to determine what we need to do to fix this mess, determine how to fix or scrap MERS, and do everything we can to get the foreclosure backlog behind us.
Mike “Mish” Shedlock
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