BofA At Center Of Another Servicer Screw-Up; Buyer Who Paid Cash Barely Dodges Foreclosure On Recently-Bought Home Once Owned By Delinquent Borrower

In Sacramento, California, The Sacramento Bee reports:

• Kamal Sharma almost lost his house in a foreclosure auction the other day. The funny thing is: He doesn't even owe any money on it. Sharma's story – an extreme case even in Sacramento's chaotic real estate market – shows that lenders continue to make foreclosure mistakes despite extensive publicity and promises to fix problems, which include sloppy paperwork and communication breakdowns.

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• Sharma's troubles started last month when he arrived at his West Sacramento house one day to find a foreclosure notice from the servicing arm of Bank of America taped to the front door. Sharma, 34, had paid $85,000 in cash for the three-bedroom home in March, using money from a settlement he received from a workplace accident in which he lost half of his left foot. He planned to rent the house out for income.



• After the foreclosure notice arrived, other curious things happened. A potential buyer came snooping around the neighborhood, and then a property management firm refused to list the house as a rental due to the foreclosure notice.



• Unable to reach BofA for answers, Sharma headed to West Sacramento City Hall on June 22, the day his house was scheduled for auction. That's when the bank abruptly called off the sale just as buyers were lining up. Sharma still hasn't heard anything directly from BofA. But in response to a Bee inquiry, the bank apologized and attributed the problem to a "data entry error" that restarted an old foreclosure action against the home's previous owner.

For more, see Wrongful home foreclosures rare – but devastating.