NEW YORK (CNNMoney) -
With more than 200,000 households receiving foreclosure notices each month, there are bound to be a few mistakes. But for some unlucky homeowners, these blunders carry some serious consequences.
Maria and Joseph Perez were threatened with foreclosure and abandoned their home after a routine refinancing of their mortgage turned into a four-year (and counting) battle.
The couple had initially purchased their Seguin, Texas home in 2007 with a mortgage that was backed by Bank of America and serviced by a firm called Taylor, Bean & Whitaker. In August 2009, the couple refinanced the loan through Quicken in order to get a better rate.
So Jose was puzzled when, a month after refinancing, he received a notice from Bank of America that said he was behind on his payments on the old loan.
It turned out that Taylor, Bean & Whitaker, the mortgage servicer, had ceased operations the same month they had refinanced. And Bank of America hadn't received the funds from the new loan to pay off the old one, said attorney Barry Brown, who is representing the couple.
Since there is pending litigation, Bank of America wouldn't comment on this specific case. But company spokesman Richard Simon said that when Taylor, Bean & Whitaker went bankrupt, the state government froze its deposits, including monthly payments that customers had made to the servicer and recently processed payoffs on refinanced loans.
Adding an even odder twist was that Quicken had sold the servicing rights to the new loan to Bank of America. So while the couple was sending Bank of America payments on the new loan each month, Bank of America was sending them notices demanding payments for the old loan.