In what may be the most flagrant example of wrongful foreclosure yet reported, Bank of America acknowledges it foreclosed on a Fort Lauderdale home it had no legal connection with at all. The homeowner, Jason Grodensky, paid cash when he bought the home on short sale. He had no mortgage, through B of A or any other bank. Nevertheless, on July 15 the property was sold in a foreclosure auction and the title was transferred to Fannie Mae.

How did this happen? We've reported numerous problems in the foreclosure process before -- robo-signing, Florida courts overwhelmed with foreclosures, and others, all part of what has become known as "foreclosure-gate." Notably for this case, the news has been filled with stories where banks failed to stop the foreclosure process after agreeing to short sales or loan modifications.

Chillingly, that appears to be what happened in this case. The prior owner of the home was in foreclosure, but Bank of America agreed to a short sale of the home to Grodensky in December 2009. The money was wired to B of A and the sale was properly recorded with the Broward County Property Appraiser. Grodensky even purchased title insurance.

But B of A's law firm, Florida Default Law Group, continued on with the foreclosure -- through a continuance and a dismissal of the case. Florida Default Law Group actually reopened the case and pushed it through the courts, six months after the short sale should have ended it.

"I feel like I'm hanging in the wind, and I'm scared to death," Grodensky told the press. "How did some attorney put through a foreclosure illegally?"

No Answers From Anyone for Innocent Homeowner After Short Sale Gone Wrong

Florida's courts are swamped with foreclosures, many of which could have serious legal deficiencies. Mistakes in the foreclosure process "happen all the time," says one St. Petersburg foreclosure defense attorney. "It's just not getting reported."

Grodensky says he spent months trying to get answers, but Bank of America and Florida Default Law Group never answered his questions. He has filed a claim with his title insurance company, but that hasn't resulted in any action, either. It wasn't until Grodensky brought the issue to a Sun Sentinel reporter that anything began to happen.

His difficulty getting answers doesn't surprise a Fort Lauderdale foreclosure attorney interviewed by McClatchy-Tribune Information Services. "Unwrapping it is like unwrapping Fort Knox," she said.

B of A has now acknowledged its error, according to spokesperson Jumana Bauwens, and has agreed to go back to court and rescind the foreclosure sale at its own expense.

"It looks like it was a mistake in communication between us and the attorneys handling the foreclosure," Bauwens said.

The problem is that there is so much pressure to simply dispose of the hundreds of thousands of foreclosure cases flooding the courts.

"The evidence doesn't matter. The proof doesn't matter. Due process doesn't matter," says the foreclosure attorney from Fort Lauderdale. "The only thing that matters is that they get rid of these cases."

Source: The Oklahoman, "Foreclosure errors are a result of swamped system," Harriet Johnson Brackey, December 11, 2010