Banks say it doesn’t happen, but I have heard from many homeowners that it indeed does.
A homeowner asks a bank asking for a loan modification.
The bank tells the homeowner it can’t help them unless they are behind on their payments – effectively telling them not to pay their mortgage.
The homeowner stops paying to try to get the loan modification. But eventually the loan modification is denied, and the bank forecloses on the home.
This is what Caylin Crawford of St. Paul, Minn., says happened to her. She is suing her lender with this claim in U.S. District Court in Minneapolis. Banks, by the way, are also paying billions to settle allegations that they’ve wrongfully foreclosed on homeowners, including a settlement reached this week.
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