This problem has to be a homeowner's worst nightmare: After dutifully making payments on a home that he or she can afford, the homeowner discovers that some odd twist of the lending process has gone awry and the bank can now repossess the hard-earned home. In the confusing world of the post-crash housing and lending market, it's become a frightening reality for some unlucky homeowners.
These aren't cases of intentional fraud. In some, such as a case where Lender A sold a loan to Lender B, but the homeowner sent payments to the wrong lender, they could be cases of failure to provide proper notice, or failure of the homeowner to keep track of who owns the mortgage. In other cases, such as a home that went into foreclosure because the owner's ex-husband took out -- and defaulted on -- a home equity loan, the actions border on fraud.
A survey of articles on this topic revealed that there might be widespread problems with sloppy, incomplete or confusing paperwork leading to inappropriate foreclosures. The moral is clear: Homeowners should keep comprehensive records of their mortgages, and they would be smart to develop good relationships with their lenders in order to catch the small errors that could turn into major problems if left unchecked [source: Chittum].