Earlier this week The New York Times reported that the banks have admitted to hundreds of mistaken foreclosures as part of an analysis required by the government in the $25 billion settlement made last year.
This is our first and possibly only look (the exact numbers will not be publicly released) into how bad the foreclosure crisis really was, and it’s not pretty. More than a year has passed since the settlement was reached, and some of the unfair foreclosures date back as far as 2006. Nearly two dozen homes were wrongfully seized, the banks now admit.
Some of these cases were already known, such as that of Sgt. James B. Hurley, a disabled Iraq War vet whose Michigan home was sold two months before he came back to the country. His court battle dragged out over years. The NYT highlights other cases:
In 2011, JPMorgan settled claims that it inappropriately foreclosed on 18 military service members and overcharged 6,000. Bank of America and Morgan Stanley also struck a pact with the Justice Department to settle claims they foreclosed on 178 military members between 2006 and 2009.
But the analysis shows there were many more. JPMorgan, Wells Fargo and Bank of America each found about 200 additional foreclosure cases, and Citigroup found over 100. This, of course, was illegal – even if the paperwork had been legitimate. The Servicemembers Civil Relief Act demands banks get court approval to foreclose on active-duty members. No word on whether any additional legal action will be taken.
Sign up for our free newsletter
Like this article? Sign up for our newsletter and we'll send you a regular digest of our newest stories, full of money saving tips and advice, free! We'll also email you a PDF of Stacy Johnson's '205 Ways to Save Money' as soon as you've subscribed. It's full of great tips that'll help you save a ton of extra cash. It doesn't cost a dime, so why wait? Click here to sign up now.