This case (In re Perra, from May 22, 2013) seemingly has it all: a homeowner who bought in the early 2000′s and financed with a main-line bank (Fleet, now Bank of America), falling behind in payments during the recession, then trying to get a modification (with all the usual paperwork screw-ups, even though they were working through an attorney).
Then the loan appears to have been mysteriously sold, and the servicing moved to a new firm (Green Tree). Gotta restart the modification process from scratch. Oh, and buy the way, someone started the foreclosure process (aka the dreaded “dual tracking,” where modification and foreclosure compete in a race to see which gets done first).
Frantic phone calls ensued, in which Green Tree apparently assured the homeowners over the phone that the foreclosure sale would be postponed, but Bank of America went ahead and held the sale anyway.
Several months later, the homeowners filed a bankruptcy case trying to get the house back, as well as a lawsuit accusing both Bank of America and Green Tree of many bad things.
While this opinion is must reading for any Massachusetts lawyer wondering what’s actually going on on the ground in this area at the present stage of the mortgage mess, it also highlights a basic truism: debtors are many times better off heading to bankruptcy court sooner rather than later, and certainly before the house is actually lost to foreclosure.