Amazing as it may sound, banks have actually foreclosed against people who are not in default. Wrongful foreclosures can arise in a variety of situations, in particular:
- “Dual Tracking” – where foreclosure and mortgage modification go ahead at the same time, so that if the modification is denied, the consumer has no opportunity to avoid foreclosure through other means.
- Encouraged defaults – where the consumer was told by their mortgage servicer that they had to default on the mortgage in order to get a mortgage modification
- Mistaken foreclosure – where the consumer never defaulted on the mortgage or did not have a mortgage at all
- Lack of standing to foreclose
- Violating a Mortgage Modification agreement