Nationwide foreclosure scandal hits home - CBS News 8 - San Diego, CA News Station - KFMB Channel 8

TUESDAY, October 19, 2010

Nationwide foreclosure scandal hits home

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SPRING VALLEY (CBS 8) - Bank of America is one of four top mortgage holding companies in the country that recently called for a foreclosure freeze. Conflicting paperwork and a rush to judgment lead one mortgage company to tell a Spring Valley family they had two weeks to move out of their home, but they fought back.

It was a knock at the door the Kelpin family says it will never forget. It was about a year ago when a real estate agent knocked on the door and told them that their home had just been sold at auction -- foreclosed upon even though they were making the payments.

"I thought it was a mistake at first. I was like, surely there has been a mistake," Tannie Kelpin said.

You might think people who get foreclosed upon are non-paying deadbeats, but Tannie Kelpin kept every piece of paper and could prove she was making her load modification payments on time.

"I was totally shocked when I called them up and they said 'Oh yes, we sold your house on such and such a date' and I was like, what?" Tannie said.

In August 2009, the Kelpins called News 8 and told us about how Aurora Loan Services had made a terrible mistake. The Kelpins showed us their loan modification contract and the payments they made, so we ran the story. They battled back, and one year later they get to keep their home.

"Thank you so much, because we could not have done it without you. We were just another number to them," Tannie said.

Attorneys who represent families like the Kelpins say the banks have built an empire on paper, which means mistakes happen.

Richard Steiner from the Legal Aid Society of San Diego says California state laws create fast-tracked foreclosures that favor banks, not homeowners.

"I have countless clients who didn't even know that their homes were being foreclosed because again the statutes are so unfavorable," Steiner said. "I know a lot of people who just walked away because they can't stand the pressure."

Which is why the Kelpins suggest struggling homeowners keep a paper trail, be patient and not expect the bank to say it's sorry.

"They never apologized but I didn't expect them to, but they did make it right and that's what counts," Tannie said.

Both the attorney we spoke to and the Kelpins agree if you feel your home is being illegally foreclosed upon, whatever you do, don't move out of it. Maintaining possession is an important part of the foreclosure fight.

The Kelpins say it was President Obama's loan modification program that saved their home.

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