BOA Forecloses on Paid Off Florida Loan

We reported months ago here that BOA and other lenders were foreclosing on paid off loans.  Well, WINK News out of Florida reported tonight that Bank of America filed a foreclosure lawsuit against a Cape Coral, Florida  couple after they sold their home in a short sale that had been approved by Bank of America.  

Banks cannot foreclose on a home you no longer own which you sold in a short sale with the bank's approval.  This is the second case this week that we have heard of Bank of America filing a foreclosure lawsuit where the house had already been sold at a short sale.  The other case occured in Indiana.

This is familiar territory for both Bank of America and Wells Fargo.  An Arizona couple was pursued for months by BAC, Bank of America's loan servicing subsidiary, despite having paid off the loan which BAC kept trying to collect as delinquent.  BAC stopped the auction after our involvement but continues to send collection letters to the Arizona homeowners on a non-existent loan.

We also reported here that Wells Fargo pursued foreclosure on a Georgia family whose purchase proceeds paid off a Wells Fargo loan held by the seller.  Despite receiving the requested pay-off figure at the loan closing (and the additional facts that the new homeowners had no loan with Wells Fargo and had already moved in), Wells Fargo still proceeded to foreclose.

Homeowners who pay off loans need to make sure that they receive verification of the loan pay-off and that the necessary release, discharge or satisfaction is recorded at their local registry of deeds.   You can no longer rely on the lender or servicer to file these documents.