Homeowner with Mortgage Insurance Foreclosed Unnecessarily

Laura Coleman Biggs is a former nurse whose husband died in 2003.  After his death, she struggled to make payments on their home for years.  Upon the advice of her attorney, she filed for bankruptcy but didn’t pursue the case to completion.  The filing alone was enough to scare creditors and she lost the ability to use her credit cards.  Foreclosure proceedings were commenced against Biggs on behalf of the lender, a Bank of America subsidiary and by December of 2013, Biggs was on the verge of losing her home just days before Christmas.mortgage insurance
The media caught Biggs story and the Bank of America subsidiary caved to the pressure.  Kind of.  It offered Biggs a loan modification, but the price was an additional $30,000 in fees and charges added on to the mortgage.
In many ways, Biggs’ story sounds like that of many others who faced difficult times and decisions during the recent recession.  The difference is Biggs should not have been facing these difficulties.  When her late husband took out the mortgage loan, at the lender’s insistence, he also took out a $100,000 mortgage insurance policy to help pay off the loan in the event of his death.  At the time of his death, the mortgage inurance would have paid off all but $20,000 of the loan.
Biggs’ attorney discovered this mortgage insurance policy when he asked for additional information on the charges that would result from the loan modification.  Biggs had been wholly unaware of the mortgage insurance and never received any type of notice of the policy, even though the lender continued to collect premiums for the policy from Biggs that were combined with her mortgage payments.
Upon discovering the mortgage insurance policy, the law firm representing Biggs brought it to the attention of the lender, who paid Biggs.  Kind of.  Initially, the Bank of America subsidiary only paid a little over $27,000.  It was only after protests from the firm, that Biggs received payment for the remaining mortgage insurance benefit plus 1% interest.
The payout gives Biggs what she was owed under the mortgage insurance policy but hardly compensates her for the years of financial struggle and emotional turmoil that resulted from the failure to timely notify her of or pay out the policy.  Biggs has filed suit in federal against Bank of America and the servicing company in an attempt to recoup some of her loses.  The claims allege negligence and violations of the duty of good faith and fair dealing that arises in all contractual dealings.  The case is unique and will test the waters in an area of the law that is not crystal clear.
Sometimes errors, like the ones made in Biggs’ case, are inadvertent and other times they’re the result of intentional acts by lenders and other businesses involved in the home lending process.  Oftentimes, the errors don’t come to light until a foreclosure action has begun or been threatened and an attorney is hired by the homeowner.
If you’re facing foreclosure, the Jacksonville, FL foreclosure defense lawyers at Adam Law Group can help evaluate your case and determine whether there has been any undiscovered wrongdoing by those involved in the mortgage lending process.  Such wrongdoing could provide the basis for a defense or independent action for legal recourse.