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During this foreclosure crisis, we’ve seen a lot stories about incompetence and missteps by banks and loan servicers. Just this week, the federal government announced that homeowners who may have suffered improper foreclosures could ask to have their cases reviewed.

But it won’t take a review to reveal this error: Bank of America tried to foreclose on a home that doesn’t exist.

Not only that, but the owner also had never missed a payment. Even after Hurricane Ike destroyed the Seabrook, Texas, home in 2008, Brad Gana continued to make all his payments on time.

But apparently he failed to insure his nonexistent home. So Bank of America, as lenders often do in this situation, bought a very expensive insurance policy and raised his monthly payments.

The notices mailed to the nonexistent mailbox at the house that wasn’t there never reached the homeowner, who said he had provided current phone numbers and an email address to the bank.

“I was shocked when they said they were foreclosing on it,” Gana said to Amy Davis of Click 2 News in Houston. “It wasn’t until about 20 calls that someone said, ‘We had a homeowner’s policy on your home that you reside in, and your monthly payments have gone up.’ But they never notified me that my monthly payments had gone up.”

Gana told the TV station that he didn’t learn of the foreclosure until two days before the sale. After he hired a lawyer, the sale was stopped, but the bank has not returned the personal property it took from the site.

Once the story hit the news, Bank of America admitted its error and said it would look again at Gana’s account. It told the TV station by email:

“There were a number of factors that contributed to the issues that resulted in the actions that we took on Mr. Gana’s mortgage and property. We continue to research the incidents. We have contacted Mr. Gana and we will work with him directly to address his concerns.”

It’s hard to say how many errors will be uncovered by the new audit process announced by the comptroller of the currency this week. The 14 largest U.S. mortgage servicers are sending letters to eligible homeowners asking if they would like their foreclosure cases reviewed.

Homeowners have until April 30 to request the reviews, which are available only for primary residences. Those who are found to have suffered financial harm from the actions will be eligible for compensation.

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