Bank Apologizes for Wrongful Foreclosure, Hesitates to Pay Damages After Repossession

Is it fair for a lender to just assume a house is vacant and due for foreclosure because it is in disrepair? One lender appears to believe so.

When First National Bank of Wellston, a lender in Ohio, repossessed a Vinton County home, the process went fairly smoothly – at first. The lender entered the home, emptied it of belongings, and changed the locks. Problems developed, however, when it turned out that the wrong home had been repossessed and the homeowner had to break into her home through a window upon returning from a two-week vacation. The bank is not disputing that it made a mistake and has said publicly that it wishes to “compensate [the homeowner] fairly and equitably for inconvenience and loss.” However, they will not compensate the homeowner for any items that were thrown away unless she can provide receipts for those items, making it highly unlikely that she’ll get much of any compensation whatsoever for the clothes, patio furniture, pool supplies, and other home items that were tossed during the repossession process[1].

The homeowner is asking for $18,000 to replace basically everything she owns, but the lender is, so far, refusing to pay up. “[First National] demanded that I had receipts for all my stuff that they threw away,” said the homeowner. Adding that “first of all, I don’t have receipts for all of my stuff [because] I wasn’t expecting a bank to come and accidentally repossess my house…and second, if I did, [they would be] in my house with all my belongings.” The lender says that they assumed the home was uninhabited because the door was unlocked and the utilities were turned off. First National meant to repossess the home across the street[2].

Thank you for reading the Bryan Ellis Investing Letter!

Your comments and questions are welcomed below.


[1] http://www.10tv.com/content/stories/2013/07/26/wellston-bank-issues-statement-about-home-it-wrongfully-foreclosed-upon-balks-at-paying-up.html

[2] http://investorplace.com/2013/07/ohio-bank-repossess-house-sells-contents-of-wrong-house/

Comments (9)

Trackback URL | Comments RSS Feed

  1. Pearl Bozzay says:

    All they need an attorney to send the bank a letter to pay up or sue them and for the attorney fee would be higher than the money they owe. NO QUESTION ABOUT IT! WHAT JUDGE IN THEY RIGHT MINED WOULD NOT SEE WHO MADE THE MISTAKE…IT IS A CRIME…I can’t believe the bank is not smart enough to make it RIGHT!

  2. I am not an Attorney, although i do know a few very good attorneys.
    I would sue this bank for !). Trespassing, 2). Breaking and entering, 3). Unlawful destruction of property and invasion of privacy 4) unlawful attempt of foreclosure- Banks intent unknown- entering the wrong house does not get it – how did they get in the house BREAKING AND ENTERING? That just the beginning, and I would sue for 5x’s the amount of the house plus damages, expenses: hotels, meals etc. OOOHHH the big one, and in this case after the bank wants receipts they threw out… MENTAL DISTRESS- WE ARE TALKING A FEW MILLIONS.

    JUST DO IT THE BANKS ARE TOO BIG TO FAIL WHAT CRAP. DO IT!!!

  3. wt says:

    This bank is stupid! Obviously, the preservation company and maybe even the listing agent to be had stolen everything in the home and then reported that the home was vacant. What homeowner would leave their door unlocked and with all their items in it. And yes, people do turn their utilities off when the go on long vacations. These workers were just a bunch of unethical thieves. The bank needs to go back to the workers and question their ethics and make them pay to the bank what the bank needs to pay back to the homeowner. This was definitely an inside job!!

  4. larry athay says:

    There has got to be some criminal liability here…Breaking and entering, grand larceny, etc at a minimum…And there should be civil liability too….I’m surprised some enterprising lawyer isn’t all over this one…Is there something missing from the story?

    • Criminal liability is iffy because the banksters will argue that they had no criminal intent – they thought they were seizing an asset that was mortgaged to them. Civil liability is another story. They have publicly admitted their error, but are refusing the make the aggrieved homeowner whole again. BIG mistake.

  5. Shannon says:

    This is not the first time I have heard of this happening. And, its not the same people. Different story, basically same situation. I bet the homeowner could find some of her stuff on ebay and craigslist – lol!

    That bank should pay handsomely.

  6. This is grist for any contingent-fee lawyer’s mill! That bank had better pony up the 18 grand if they know what’s good for them, or they will be paying consequent and salutory damages and attorney’s fees and court costs and God-knows-what else. The idiocy of these banksters is really shocking, especially when you think of the enormous sums and valuable capital assets entrusted to them. Not only are they begging to be taken to the cleaners by a civil jury, but their refusal to compensate is keeping this story alive in the Press, which will harm their business for years to come. Time for a little Board action, wouldn’t you say?

  7. Eric Benson says:

    If I had been this bank president, the first thing I would have done upon discovering this “mistake” would have been to buy a new television and maybe a couple new bikes for the kids. I would have presented these items to the family and said that this was above and beyond whatever settlement is eventually reached, just a gesture to apologize and show both good will and remorse.

    Really, how much would that have cost? $500? Could they do something like that? No. Instead they had to dig in their heels and start swinging back. It just goes to show that a bank like this cares nothing about the people; it only cares about its bottom line.

Leave a Reply

Category: Real Estate