W. Virginia Woman’s Life Vanishes With Mistaken Foreclosure And Seizure Of Possessions

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What if you paid off your mortgage and twenty-five years later, a bank foreclosed on it and emptied your house of all your stuff? You’d be outraged, right? And out for justice, or at least just compensation. Well, what if you couldn’t find out which bank did it?

That’s what happened to Nikki Bailey of Logan, West Virginia. She came home from visiting a friend in the hospital one day to find a big red truck loading up the last items from her now-empty house. The driver told her she had been ‘foreclosed on,’ which she knew was not possible. The house had been paid for since 1988. Of course, Bailey called 911.

When the police arrived and examined the papers the truck drivers had, they discovered that the company had the right street address — in the wrong city. The address the repo company was supposed to go to was 10 miles away. So the truckers unloaded the truck and gave the stuff back to Bailey — one dresser, one chest of drawers, and one mirror. Everything else in her home had been hauled away earlier, supposedly to the ‘dump’ as the company supposedly decided it was all ‘junk.’

This is a woman who has fought hard to stay in her home. She moved there 25 years ago to be near the school where she taught. In recent years, however, she’s had to be away for extended periods to care for her mother. Twice, her home was vandalized. Twice, she repaired it and continued on, but her insurance company cancelled her coverage. The home is currently uninsured. Then, on August 6th, this happened.

Bailey has a lawyer, Tim DiPiero, and she’s doing her best to put together a list of everything she accumulated in her home over the last 25 years. But the lawyer hasn’t been able to find out which bank ordered the foreclosure, so he doesn’t know if the bank or the repo company was responsible for the error. In any case, criminal charges probably won’t be filed and civil action will have to be undertaken in order to get compensation.

Bailey’s story is not a fluke. Mistaken foreclosures across the country have soared right along with so-called justified foreclosures — and justice is rare. In April, The Nation published a report on the mushrooming and heartbreaking problem of wrongful foreclosures. In it, they examined the performance of the Independent Foreclosure Review, set up by the government to investigate whether mortgage servicers owned by the big banks — like Bank of America, Wells Fargo, and JPMorgan Chase — were engaged in fraudulent foreclosures. The problem is, the banks were allowed to hire their own investigators.

Unsurprisingly, the results were less than stellar and full of deceptions that protected the banks. Just before The Nation published its story, the U.S. General Accounting Office (GAO) issued a report noting the failings of the investigation and the government agency behind it, the Office of the Comptroller for the Currency (OCC). First of all, the rate of wrongful foreclosures was vastly understated. Because of the inconsistency in methods allowed the ‘investigators’ by the OCC, they couldn’t possibly have arrived at a meaningful statistic. Nevertheless, the OCC announced that the rate of mistaken foreclosures was ‘only’ 4.2 percent. An independent study by The Wall Street Journal concluded that the error rate of Wells Fargo alone had to be about 11 percent.

Secondly, there was a lack of transparency in the process. Members of Congress who were concerned about the integrity of the investigation tried to get information about it from the OCC. Representative Maxine Waters, Representative Elijah Cummings, and Senator Elizabeth Warren all asked for documents at the end of 2012 and early 2013 that had not been provided months later. The Nation‘s full coverage of the problems can be seen here.

Even as fraudulent practices have been exposed, protection and justice for homeowners has been slow to catch up. Last year, California passed an extensive ‘Homeowner Bill of Rights’ that took effect in January, providing homeowners with new avenues of both protection and redress of harm.  Last spring, the U.S. Department of Justice got involved on behalf of a group of service members who were wrongly foreclosed upon and forced a settlement from the Bank of America and Morgan Stanley, based on violations of the ‘Servicemembers Civil Relief Act.’

But the vast majority of Americans are neither residents of California nor members of the military. They deserve more than a patchwork of unreliable measures cobbled together by local governments. If ever there were proof of how badly this country needs the Bureau of Consumer Protection to stave off fraudulent practices and abuses, the heartbreaking case of Nikki Bailey is it. Her story is happening over and over again, across the country, and each case is just as emotionally devastating.

More than three weeks after her home was emptied out, Bailey is still waiting — for answers, for the names of the culpable, for justice to be done.