In Brisbane, California, the San Francisco Chronicle
- While Mark and Jenny Gin were making dozens of calls and submitting reams of paperwork to get a loan modification from OneWest Bank, another department of the bank proceeded to foreclose on their Brisbane home.
That's not unusual. Thousands of homeowners have complained about such "dual tracking" - so many, in fact, that California will ban the practice starting Jan. 1, when the state Homeowners Bill of Rights takes effect.
What distinguishes the Gin family is that they sued - and won. A San Mateo Superior Court jury last month found that OneWest acted fraudulently. Legal experts said it may be the first instance of a California jury finding that a bank committed wrongful foreclosure by dual tracking.
However, the jury awarded the Gins just $13,500, which didn't even cover their legal expenses. To get the house back, they'd have to pony up the full amount they owe on the mortgage, which they can't do.
A cautionary tale
Their story is a cautionary tale that illuminates California's legal landscape for the many homeowners who feel they were wrongfully foreclosed upon. Even in the rare instances where borrowers prevail against banks in court, the rewards may not be worth their trouble.
- His attorney, Steven Finley of San Francisco's Hennefer, Finley & Wood, explained the reasoning. The jury "found that the foreclosure was wrongful and fraudulent, but because the property was underwater, (the Gins) received no damages," he said. "Under wrongful foreclosure actions, you only get lost equity."
California offers just two remedies for wrongful foreclosure, Finley said. One is damages, but they are limited to lost equity. The other is to get the house back, but that requires tendering all the money owed on the mortgage.
"California really screws the borrower. If your house was wrongfully foreclosed and you want it back, you have to offer the whole amount," Finley said.
The jury declined to award punitive damages. "Jurors said, 'We feel your client has been defrauded but it wasn't directed maliciously against him,' " Finley said.
The $13,500 awarded to the Gins was to pay them back for a remodeling project they had started. With their first child on the way, they borrowed money from relatives to make the house more child-friendly after being assured by OneWest that they would receive a loan modification, Gin said.