Mortgages Blog

Finance Blogs » Mortgages » Foreclosing on a bank

Foreclosing on a bank

By Holden Lewis · Bankrate.com
Tuesday, June 7, 2011
Posted: 12 pm ET

How dare Warren and Maureen Nyerges foreclose on their bank branch?

You've probably read or seen the story by now: The Nyergeses paid cash in 2009 for a foreclosed house in Naples, Fla. They owned it free and clear. Four months after they bought the house, they received a foreclosure notice. Just a mistake by some well-meaning people in a cubicle farm somewhere.

Sure, it was upsetting to receive an erroneous foreclosure notice on a house without a loan on it. And, yes, the Nyergeses endured a Kafkaesque 18 months of phone calls and court hearings. But the bottom line is that the system worked. After countless hours, and only $2,500 in attorney costs, they finally convinced a court that they owned the home and that the foreclosure was invalid. A judge ordered Bank of America to reimburse them their attorney costs.

Instead of being satisfied with that judgment, the Nyergeses became even more litigious, contributing to the overloaded dockets of America's beleaguered court system. They expected the bank to obey the judge and pay the attorney fees, and they were willing to use the overburdened court system to exert their will.

In other words, it wasn't the principal of the thing. It was about the money. They naively believed that the rules apply to big banks and not just to borrowers.

The homeowners' attorney, Todd Allen, sweet-talked the judge into issuing a foreclosure order against a local B of A branch for failure to pay his fees. Allen called the local news media to accompany him and some sheriff's deputies to the branch. The deputies got ready to seize the desks and furniture of the poor bank employees who had done nothing wrong. Those branch employees hadn't messed up the paperwork; they hadn't gone to court unprepared. Yet they were expected to the bear the brunt of others' mistakes. Just like the Nyergeses had been expected to bear the brunt of others' mistakes.

Well, two wrongs don't make a right.

According to the Associated Press, the branch's manager gave the Nyergeses a check on the spot for $5,772.88 to cover the attorney fees, plus late charges. Don't you think $3,200 in late fees is excessive?

The next time you hear someone complaining about frivolous lawsuits, tell them that they're talking about cases like this.

«
»
Bankrate wants to hear from you and encourages comments. We ask that you stay on topic, respect other people's opinions, and avoid profanity, offensive statements, and illegal content. Please keep in mind that we reserve the right to (but are not obligated to) edit or delete your comments. Please avoid posting private or confidential information, and also keep in mind that anything you post may be disclosed, published, transmitted or reused.

By submitting a post, you agree to be bound by Bankrate's terms of use. Please refer to Bankrate's privacy policy for more information regarding Bankrate's privacy practices.
7 Comments
Darla aka Alrady
June 09, 2011 at 8:43 am

I blog on this foreclosure stuff regularly. we are personally fighting forecosure and that is how I started blogging about almost everything to do with foreclosures (zingervotes.blogspot.com) AT any rate this is horrid and I love your sarcasm in the write up.
The corruption in the banking industry is amazing. We were evicted two days before the OCC demanded that banks stop all processes from 2010 foreclosures. The courts would not hear that we were litigating and wanted to stay the order. The banks do not know their left from right. They do not follow rules, laws and in are wanting courts to MAKE UP LAWS.. (watch this week for newest criminal actions)

Alan Wild
June 08, 2011 at 11:19 am

I'll agree that this was an unncessary case and it's a shame it had to happen, but BofA (1) shouldn't have put them in the position in the first place and (2) they _REALLY_ should have had the decency to honor the original judgement after the PR nightmare they created for themselves.

That said, I don't know all of the details and what steps the Nyerges' took before going to the courts. I would like to think they tried reasonably things before trying to foreclose, but I'll acknowledge that's possibly they didn't do their due dilegence before going to the courts.

However, assuming they did... it was a far better thing then letting BofA postpone their settlement payment indefinately.

Holden Lewis
June 08, 2011 at 8:34 am

As I said, the next time you hear someone complaining about frivolous lawsuits, tell them that they're talking about cases like this.

I call it "the crazy right-wing father-in-law talking point for Thanksgiving dinner."

jim parcel
June 08, 2011 at 6:07 am

Frivolous??? Surely you jest? These folks had every right to expect their attorney fees to be paid, If folks don't take a stand and hold "well meaning" people's feet to the fire, then all of us tend to be overrun. I for one, applaud them.

darlene
June 08, 2011 at 4:14 am

I think what these home owners did is great , I think its about time the big wigs owe up to their mistakes !

bumrocky
June 07, 2011 at 2:49 pm

Hey Holden. You forgot to mention that this happened 5 months after the judgement against Bank of America, and they still hadn't gotten paid yet. So they did what B of A would have done. It shows that yes, the system is broken, and it shouldn't have even gone to the courts to begin with. B of A should have just admitted they were wrong, and no legal fees would have been needed.