The Real Deal Miami

Foreclosure crisis made worse by false alarms

May 05, 2010 02:36PM

Scores of homeowners have been foreclosed upon by mistake because of disorganization at banks and mortgage servicers, a ProPublica investigation has found. In some cases, the communication structure is so broken that even while one arm of a company is foreclosing on a borrower, another is still offering that same borrower a loan modification. Servicers participating in the Obama administration’s Home Affordable Modification Program are prohibited from auctioning a home while a loan modification decision is pending, but that rule often isn’t enforced. In at least 50 recently-filed lawsuits, homeowners have accused their mortgage servicers of premature foreclosures, ProPublica reported. [ProPublica]