Consumer Law

"Bogus" Foreclosure Claims

By M. Stan Herring

The Sarasota Herald Tribune has posted an article about the rising problem of uncontested, bogus foreclosure claims. "Bulk-rate foreclosure firms" are cutting serious corners and filing "sloppy documents with unverified and false claims." They usually get away with it, too, because for the most part, foreclosure claims aren't contested and the documents are seldom even skimmed.

The article cites an incident in Sarasota where a man's house was almost foreclosed on by out of town foreclosure lawyers. William Berta, the homeowner, was never served with foreclosure papers because the lawyers claimed his house was abandoned and he couldn't be located...a ridiculous claim since he was a local business owner. A judge overturned the case and foreclosure was avoided.

That has led to filings so ridiculous that I thought anti-foreclosure lawyer April Charney was kidding when she e-mailed a recent find from Lee County. It is a template, a fill-in-the-blanks foreclosure document, that foreclosure-mill lawyers filed in court as a real one, with almost nothing filled in. But though law office employees or contractors apparently forgot, or didn't bother, to fill in names of key parties in that foreclosure, some ironic truth was left in there, Charney says. Where there should be names of the investment company that allegedly held the mortgages or transferred it to another company, the court document lists "Bogus Assignee" and "Bad Bene" (beneficiary, it seems).

This has been happening all over the country. After learning of the foreclosures through local ads, local law firms have no problem contacting homeowners who the bulk foreclosure firms couldn't locate.

If you would like more information about foreclosure, please check out our articles The Three Stages Of Foreclosure In Alabama and Wrongful Foreclosures In Alabama.

If you have further questions, feel free to contact us through our website or by calling 205-879-2447.

You can also sign up for our free email newsletter sent out every Thursday morning - we cover topics such as the one in this post. We would love to include you! Just fill out the form below:

Full post as published by Alabama Consumer Blog on February 26, 2010 (boomark / email).