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One Day Late With Mortgage Payment and Facing Foreclosure
by Robert Franco | 2011/08/04 |

Sometimes you just have to wonder if there is any common sense left in the financial industry.  After a Florida gas station owner was one day late with his payment, the bank started refusing to accept payments.  Now ten months behind, with a foreclosure case pending, he offered to pay the $50,000 delinquency but the bank refused to accept it.  Here is a man who has the money to make his payments, he wants to make his payments, and he is dealing with a bank who would rather foreclose than get paid.   

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According to an article in the St. Petersburg Times, Saji Mathew missed a payment due on October 12.  He took the money to the bank on October 13.  On October 25 he received a late notice and he visited the bank where a representative told him that "the payment would be reprocessed."

Eleven days later, Mathew received a notice demanding $5,243 for the October payment, which included a penalty.  He ignored it because the representative told him the payment would be reprocessed.  On November 20, an attorney for the bank sent a demand letter for the total amount due on the loan - $473,000.

After getting the run-around from the bank and their attorney, Mathew made the November and December payments, but the bank returned them and filed for foreclosure on December 20.

In court this week, Ronald Bruckmann, a Miami lawyer representing BB&T, insisted that the bank had the right to demand repayment of the entire loan amount once Mathew missed a payment.

"They won't take my money,'' said Mathew. "I want them to take it. I was one day behind paying the mortgage."

BB&T's stance flabbergasted the judge in the case.

"All the people that understand anything about mortgage foreclosures need to know this stuff," Circuit Judge Amy Williams said in court. "This is the idiocrasy of this stuff. This is why we're in a worldwide financial crisis because there's no business sense any more in the foreclosure industry, none. And it blows my mind. Totally blows my mind.''

So... why would the bank want to foreclose when the borrower is ready, willing and able to pay the entire delinquency and continue to make his regular payments?  It's not like Mathews planned a strategic default, or was seeking a modification, as many have done in the past... he was one day late and just wants to reinstate his loan and move on.

Mathew's attorney seems to have his own suspicions.  "There's got to be some financial incentive for them to not work with my client. This is disturbing, especially in this economy. It is really wrong."

Judge Williams ordered BB&T to place the $50,000 in a trust account or into the Clerk of Courts' registry account until the case is settled.

Maybe the fact that this is commercial real estate has something to do with it.  Perhaps the bank knows if it takes this property back, it can make a quick sale and a tidy profit.  After taking significant losses on residential foreclosures, maybe the bank sees a way to finally make money with foreclosures.  But, that is only speculation.

It could be some bad blood between Mathews and the bank.  Apparently, the bank had refused to deal with him because he is involved in another company in an unrelated foreclosure with the same bank.  Could the bank's motive be spite, or revenge?  Again, its only speculation.

It really makes you scratch your head, though.  What kind of bank doesn't want its customers to make their mortgage payments?  With so many borrower's struggling, you would certainly think that this mess could be cleared up with ease... this guy actually has all the money needed to pay the delinquency and he is trying his best to give it to the bank!

I'd hate to be the banks lawyer, trying to explain to the court why his client won't accept the payments... when this whole thing started with a payment one day late!


Categories: Foreclosures

951 words | 5541 views | 3 comments | log in or register to post a comment


The above post is a perfect example of the craziness that has taken over the financial institutions in the US.

I remember when banks use to work to help their clients and benefited when their clients did well. It was a time when service was the most important factor. With the real estate crash and resultant recession banks have changed their operating basis.

Obviously there was a financial gain, at the detriment of the individual, for the bank.

Sometimes I think that the different financial institutions that get involved in things like this forget that each loan represents a person - a real human being with families, friends and people they support.

I sure hope this gets sorted out and the property owner keeps his property and the bank involved comes to realize that they are there to help their clients prosper and not there to prosper when their clients fail.


by Kristine Bjorge | 2011/08/04 | log in or register to post a reply

Alpheus Branch would be rolling over in his grave if he knew.

Just a small point to keep you on your toes, Robert.  You say, "He took the money to the bank on October 13." That would be the day after the payment was due. 

But, the story you linked to suggests that the payments were withdrawn automatically, and that Mathew deposited the funds in his account a day after the payment was due.  He didn't go in to make the mortgage payment.   Mathew was not so concerned, the story says, because the payment sometimes was not withdrawn until the 14th. 

I would suspect that that would be due to an intervening weekend, which would not have occured in this case.  Either way, it doesn't seem to me that Mathews made the payment the next day.

All the same, without knowing any further facts (other than googling to find out what BB&T is), I'm inclined to agree with your opinion.  Mathews seems to be able and willing and trying really hard to make it right.  It really seems odd that the bank would want to foreclose.

by Patrick Scott | 2011/08/09 | log in or register to post a reply

He did go into the bank with the money...

If I read the story correctly, the bank tried to take the money from his account, as was usual, on the 12th.  Since there was not enough money, he went into the bank on the 13th to try to make the payment.  According to the story:

Saji Mathew missed the Oct. 12 mortgage payment on the Mobil gas station he co-owns.  On Oct. 13, he took the money to the bank, thinking that would make things right.

So, I think he deposited the money to make the payment in the account from which it was to be drawn, but it was a day too late.

On Oct. 25, he received a late notice. Mathew said he visited the bank, where a representative told him the payment would be reprocessed.

But, the bank didn't process the payment as they told him they would.  For whatever reason, they opted to foreclose.  What happened to the "grace period?"  Isn't there normally a grace period in which payments can be made?  I know I have sent my mortgage payment in a day or two late and I have never even been assessed a penalty, let alone placed in foreclosure.  Perhaps I should be more careful.

by Robert Franco | 2011/08/09 | log in or register to post a reply
Source of Title Blog

Robert A. FrancoThe focus of this blog will be on sharing my thoughts and concerns related to the small title agents and abstractors. The industry has changed dramatically over the past ten years and I believe that we are just seeing the beginning. As the evolution continues, what will become of the many small independent title professionals who have long been the cornerstone of the industry?

Robert A. Franco



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