HUGE bank error in my favor...trying to correct

[delana0608]

What is the name of your state? LA (now living in NC)

This is quite a convoluted situation, so I'm sorry in advance for the long post.

My husband & I bought our home in Abita Springs, LA 3 weeks before Katrina hit. After the storm our local bank (Hibernia) deferred all mortgage payments until January. My husband and I attempted to make payments before January, but were told they were not accepting any payments. The loan was given to another company (Dovenmule - I'm spelling that wrong) for "Loss Mitigation." In Janaury we were told that our loan was in default and if they weren't so behind on their paperwork, we'd have been foreclosed on already. They also reported that info to the VA (we had a VA home loan). Obviously this was a problem, and after speaking with a TON of people my husband found someone with enough authority to give us some options. We were told that we could pay roughly $5K to bring our payments current, refinance for roughly $5K more than we originally borrowed, or they would foreclose. We didn't have the money to make the big payment they wanted, and we were afraid of the process of fighting foreclosure so we did the re-fi. A bad deal, by far...but we felt like it was our only choice.

Now this is where things get weird. We made payments to Dovenmule, until we received notification that they were sending the paper back to Hibernia, which had since been bought out by Capital One. So, for a few months we make payments to Capital One. Then we get notification that Chase is now servicing the loan. So, we make a few payments to Chase......THEN the insanity occurs. They process our checks, put them in our escrow account, then send us an escrow refund check. In a seperate envelope we received a lien release and a letter stating that our home loan was paid in full (and offering us a home equity line of credit). Obviously, this isn't right.

So, my husband calls Chase and tells them this is an error and they need to research it. They reply that it's not a mistake and continue to try to sell us on a home equity line of credit. We decide to give it time, knowing they'll find and correct the error.

THEN we get transferred to North Carolina. The house goes on the market and we went to closing on November 30th. We just KNOW that this bank stuff will work itself out....but it didn't. We got a HUGE bank wire when closing was done and now we have all this money that isn't ours.

Knowing that we need to do the right thing my husband calls Capital One and explains the error. Instead of apologizing and thanking him for his honesty, they put their in-house debt collectors on the case. They start calling my husband AT WORK and calling him a liar and harrassing him. We asked for a payoff amount so we can wire them what's rightfully theirs, and they want tons of interest and penalites for the months that we made the payments to Chase, that Chase rejected. We flat out REFUSE to pay those fees. We DID make the payments, it was the bank they hired to service the loan that messed up, not us. Not to mention the fact that we went to them with this. We didn't pocket their money and hope they didn't catch it. I swear that saying "No good deed goes unpunished" is more true than I ever knew.

I need to know what our rights are. I feel like we're going above and beyond to correct THEIR mistake and of course, I think we're being reasonable but I need an outside expert opinion. We are offering them exactly what we originally borrowed ($171K), not taking into account the payments we made, the full amount we borrowed to settle this in full. (The re-fi brought the principle balance up to $176K and now they want $181K.) We also asked that they report correctly to our credit breaus that we've paid satisfactorily and this loan is paid in full.

We initiated the first call to Capital One last Friday when the wire hit our account. And we've told them the same thing from day one.....we want to do the right thing and give you this money. But we're not paying these fees. They stalled and stalled and had their collectors call us, then today we get an e-mail saying that they will take $176K as payment in full, if we sign a form saying we release them from all liability they have related to this account and the offer is only good until end of business tomorrow. That's NOT what we're offering. That's not what we owe. We'll give them the full original principle balance and that's it.

I'm angry, frustrated, confused, etc. What are our rights? Part of me wants to tell them to pound sand. I'll just have my day in court when they sue us. I sue debtors for a living and no judge is going to award them fees and interest when we've offered full principle. Like I've said, we aren't trying to stick it to them. We aren't trying to run with their money.

Can anyone give us some insight on how to deal with these people?

[moburkes]

You need an attorney NOW. This is the wrong place for your complex situation.

[LindaP777]

Unbelievable . . .

[lcannister]

You would be most unwise to ignore this without resolution. It WILL come back to haunt you and by then you could have incurred a myriad of expenses.

Get an Atty versed in real estate matters as you are likely not the only person this has ever happened to.

[delana0608]

Thank you for the responses. We set up an appointment with a real estate attorney today and told the Capital One that we will get back to them after meeting with him. This waiting stuff is killing me, but it is what it is.

[acmb05]

So the mortgage company sent you a lien release, signed off on the sale of the home, refunded your "overpayments" back to you and gave you all the money from the sale of the home because according to them loan was paid in full?

They are trying to strong arm you into paying for thier mistake. With a good attorney you should come out of this with more than you think.

[LindaP777]

Please post back with the results. I'm very curious as to how/where all the chips will fall!

[delana0608]

Originally Posted by acmb05

So the mortgage company sent you a lien release, signed off on the sale of the home, refunded your "overpayments" back to you and gave you all the money from the sale of the home because according to them loan was paid in full?

They are trying to strong arm you into paying for thier mistake. With a good attorney you should come out of this with more than you think.

Yes, you've got it. Capital One refused to take the principle balance only, so we STILL have the money in a CD just waiting for them to come to their senses. Unreal.

[LindaP777]

Still really curious how it all will pan out. Please keep updating us!

[PeterN]

this is one hell-of-a-mess they made
i am also curious of how things will work out

[FlyingRon]

I was refinancing once through Chase and for stupid reasons on their part the loan never closed. Even though it didn't I got a nice letter saying thanks for paying off your mortgage and the escrow balance and the lien was released.

They refused payments on either the existing or the "unclosed' refi.

I sent them a letter but it eventually took a lot of beating on the to wake them up (I was content to sit back and see how long they took to find out they'd made such an error). Finally they woke up and wanted the escrow money plus the missing payments. I told them to take a hike because I had an HE loan standing by on another property ready to pay it off.

Chase is a bunch of idiots. I wonder how many loans they lose because they decide they're paid off prematurely.

[delana0608]

We settled with them for $150K.

[CourtClerk]

Very good. Congratulations... now what are we doing with the extra money??? Oh, and did they pay the attorney's fees?

With all you've been through, you and your hubby need a vacation.

[LindaP777]

That is good news! Thanks for posting! But a whole year!!!
Did you hire an attorney, or will they willing to talk?