Pete and Kim’s story reminds me of a joke I heard years ago when the banking/foreclosure crisis was in full swing. It went like this; “What happens when you ignore the fine print in the bank’s documents?” The answer being “fines, penalties, fees, add-ons, charges and costs”. Going on, the next question was; “What happens when your bank ignores important legal documents?” The answer? “Foreclosure!” In Pete and Kim’s case, this joke turned out to be all too real.
BETWEEN THE CRACKS
Their problems began when Pete suffered a judgment against him by a credit card company, who then garnished the bank account from which their mortgage payment was taken every month. That caused them to miss one month’s payment. However, they straightened the situation out, and went into the bank each month to make the payment in person. Several months later, they received a noticed indicating that those payments hadn’t been made. Somehow, they had slipped between the cracks. That notice was followed by a foreclosure complaint.
GETTING THE PAPERWORK IN ORDER
Getting Pete and Kim’s situation straightened out should be relatively simple. All that needs to be done is present proof of each month’s mortgage payment. That will be done in the form of a letter to the bank called a Notice of Error. This vehicle is provided for under federal law which allows homeowners to register their complaints with their bank in writing and requires the banks to remedy the problem within thirty days. If they don’t, they can be liable for all damages. In Pete and Kim’s situation, this will force their bank to get its paperwork in order and dismiss the foreclosure. It’s unfortunate that they had to go through what they did, but at least they should come out whole.
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Kathryn Eyster contributed to this article.