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'Whoops We Sold Your House' -- Wells Fargo Owns Mistake, Investment Firm Owns Home

By Eric Lipman

On the California Bankruptcy Attorney Blog yesterday, the lawyers at Howard Nassiri summarized and linked out to a column in the Los Angeles Times about an unfortunate couple who had their Long Beach, Cal. house sold out from under them by their mortgage lender. Mike and Ellen Kahara arguably bought too much house back in 2004, financing it with an interest-only loan. When the economy hit the fan, they were unable to make some of their mortgage payments. This was no case of strategic default; the Kaharas were struggling (and presumably don't have several other homes and "all the cars" to move into). Enter Wells Fargo. The bank declared the Kaharas in default in August 2009, and advised them to apply for relief under the Making Home Affordable program. In December, WF notified the Kaharas that they were eligible for a trial modification program that would reduce their monthly payments to $1,400. They made those payments, in full, as the bank continued to assess their eligibility for permanent modification. At least one blogger suspects foul play in the indefinite extension of the trial program. On August 11, the Kaharas received a letter informing them that their application for a permanent...

Full post as published by Legal Blog Watch on September 15, 2010 (boomark / email).