Millions of homeowners face losing their homes in the continuing foreclosure crisis, but homeowners often have more than the struggling economy and slumping house prices to worry about: Disorganization within the big banks that service mortgages has made a bad problem worse.
Hill was able to avoid eviction — for now.
Chase reversed the sale by paying the man who'd bought the home an extra $19,500 on top of the $86,000 he'd paid at the auction.
But other homeowners say they lost their homes because the communication breakdown within the banks was so complete that it led to premature or mistaken foreclosures.
"We believe in many cases people are losing their homes when they should not have," said Kevin Stein, associate director of the California Reinvestment Coalition, which counts dozens of non-profits that work with homeowners among its members.
In the worst breakdowns, such as Hill's, banks — and other companies that service loans — actually work at cross-purposes, with one arm of the company foreclosing on the home while the other offers help. Servicers say such mistakes are rare and result from the high volume of defaults and foreclosures.
The problems happen even among servicers participating in the administration's $75 billion foreclosure-prevention program
