Wednesday, December 7, 2011

Improper Bank Foreclosures Create Trail of Victims

Our Oak Park foreclosure defense attorneys know how difficult it is for a homeowner to go through foreclosure proceedings and potentially lose their home.  But what if you bought a house in what you thought was a fair and legal transaction, and kept up with all of your payments, but found out that you will still lose your house?  Not because anything you did, but because the bank previously foreclosed on a house improperly and therefore did not have the title to sell to you.  The bank’s shoddy foreclosure practices not only hurt the homeowners who lost their house but also the innocent third party who bought the house.

This was at issue in a recent judgment by the Massachusetts Supreme Judicial Court in Bevilacqua v. Rodriguez.  Mr. Bevilacqua bought a property in a foreclosure sale by US Bank.  He invested several hundred thousand dollars in the property and turned it into condominiums, a few of which he had reportedly already sold.  However, unbeknownst to him, US Bank had messed up the foreclosure.  The previous foreclosure was void under a 2010 case, U.S. Bank v. Ibanez, which found that if a bank cannot provide proof it owns the mortgage, any foreclosure actions are invalid.  The Bevilacqua case extends that ruling further and finds that the innocent third party who bought the foreclosed property from the bank never had a proper title and therefore cannot own it.  In this case the previous owner, Mr. Rodriguez, was nowhere to be found, but that did not change the fact that Mr. Bevilacqua never owned the property in question.  The only practical remedy to someone like Mr. Bevilacqua who had invested so much money in a property was to go through a re-foreclosure, which could be very costly and have consequences if Mr. Rodriguez showed up as the legal owner or if other parties were interested in bidding on the property.

Massachusetts Attorney General Martha Coakley stated that this is endemic of a wider problem with bad foreclosure practices.  She said that the banks’ reckless behavior in foreclosure proceedings has harmed both homeowners and third party buyers.  Bevilacqua, however, does not address the robo-signing controversy (see previous post here.  That issue is still waiting for judicial consideration in Massachusetts, as in Illinois. 

As Oak Park foreclosure defense lawyers, we certainly know that banks’ actions in foreclosure proceedings are not always above board.  The continuing foreclosure crisis has made these hasty and often slapdash actions to take peoples’ homes even more apparent.  And the more links added to the ineffective title chain from an improper foreclosure makes the situation harmful to more people and potentially more difficult to untangle.  If you believe your house has been improperly foreclosed or the bank is taking inappropriate actions, please contact an experienced foreclosure attorney in your area.  As these Massachusetts cases show, there is legal recourse against banks’ incorrect actions and if the bank does not have proof it holds the mortgage to the house, there are remedies for homeowners.  Additionally, if you are concerned about buying or having previously bought a foreclosed property, a Chicago foreclosure attorney can check out your title and see if there are any issues or potential problems.

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