Bank Error, Lis Pendens Trigger Foreclosure Rescue Notices To Albany Homeowner Current On Mortgage Payments

In Albany, New York, The Advocate at the Albany Times Union reports:

• [Tina] Grant, 41, returned home last Friday from camping with her kids at Cape Cod to a summons notice on her front door. Her mortgage company, CitiMortgage, had filed a lawsuit against her to correct an error it made, which inadvertently triggered foreclosure alerts. Grant was stumped and felt shamed. "I am humiliated," she said. "I don't want to step outside my house because all my neighbors know about this." CitiMortgage had filed a lis pendens, otherwise known as a pending notice on a property.(1)

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• Signs that something was wrong starting coming in the mail in late May. Grant was mystified by heaps of letters from attorneys and mortgage companies offering to bail her out -- when she didn't need their help.

• Grant bought her house in 2007 and took out a mortgage with ABN Amro. When the company merged with CitiMortgage, Grant's mortgage was to be transferred. But CitiMortgage accidentally filed a "Satisfaction of Mortgage" (which means a mortgage has been paid off) with the county clerk instead of a "Transfer of Mortgage" document. Grant didn't think to do anything about it because monthly mortgage payments were still coming out of her account.

For more, see You’re paying your mortgage. Now you’re being sued (go here for Tina Grant's video explaining her embarassment at receiving foreclosure correspondence).

(1) The story subsequently reveals that the recording of the lis pendens was automatically (and incorrectly) interpreted by foreclosure rescue operators and others as a sign that a foreclosure action was filed against Tina Grant's home, triggering the onslaught of offers for bail-out help that she reportedly received from them. In reality, the lender's lawsuit was intended to do nothing more than to void the inadvertent recording of a satisfaction of mortgage, and allow them to properly record an assignment of mortgage. While the recording of a lis pendens is often associated with the commencement of a foreclosure action, it can be filed in any lawsuit that impacts upon the title to property (ie. Actions for/to specific performance, quiet title, void a conveyance or instrument, declaratory judgment for an equitable mortgage, forfeiture, among others).