Like many Americans, Jennifer Ryan-Voltaire is trying to get ready for Christmas in her home outside Boston.
She and her family have their tree on display. "We've decorated the outside of the house," she says. "We're trying to get into the spirit of things, despite what's going on."
Wells Fargo recently foreclosed on the family's home and owns the property.
"We're trying to make it as fun for the kids as possible without them knowing or having to worry about what we're going through," says Voltaire, an office manager at a medical practice.
She hasn't told her three kids that they don't own their house anymore.
Across the U.S., state prosecutors are investigating whether the nation's largest banks have been improperly foreclosing on thousands of homeowners. The banks say they do not seize people's houses without justification.
The Voltaire family bought the house, situated in a middle-class neighborhood, four years ago. They've always made their payments. But after Voltaire's husband had his hours cut back at work a year ago, they couldn't afford their loan anymore.
So they applied for and got into the Obama administration's loan modification program, which starts out with a trial period. Voltaire made lower monthly payments while faxing in proof of income and other documents to Wells Fargo. But she says the bank kept losing the paperwork.
A paperwork debate dragged on for more than six months. But Voltaire says she always re-sent anything the bank wanted and she thought everything was in order.
An Auctioneer In The Front Yard
But one day this past July, Melissa Mercogliano — Voltaire's cousin who lives across the street — saw an auctioneer from the bank standing in the front yard, selling the house in front of a crowd of about 30 people.
Mercogliano ran over, waiving her arms and shouting that the house was not for sale. But the auctioneer told her that Voltaire no longer owned the property.
Voltaire tried calling Wells Fargo. She says she knew Wells Fargo had said it was missing a tax document again and had scheduled a foreclosure. But she says she faxed the document to the bank and a call center worker confirmed that Wells Fargo now had all the documents it needed and that it would call off the foreclosure sale.
Meanwhile, when buyers at the auction saw Voltaire's neighbors running and yelling into cell phones, it scared them off. No one bid on the house. The bank ended up foreclosing and taking ownership.
Voltaire was shocked, since she'd always made all her payments and appeared to be qualified for permanent help through this federal program.
"What they did was illegal," she says. "I mean, how do you just take somebody's house?"
Taking Legal Action
Wells Fargo maintains that there was nothing improper about this foreclosure.
But Voltaire called local law firms in search of assistance and stumbled upon one that just happened to be in the process of suing Wells Fargo on behalf of homeowners like her.
"I think very clearly the bank made a mistake," says Gary Klein, who heads a team of lawyers seeking class-action status for lawsuits against Wells Fargo and other major banks, including JPMorgan Chase, Bank of America and others. "This is something that we see over and over again — people are sending in their documentation and still get denied."
Kevin Costello, another attorney on the legal team, says banks too often fail to fulfill their contractual obligations to homeowners. "The documents are continually lost," he says. "The modification is not forthcoming. The way that Wells Fargo has behaved constitutes an unfair and deceptive trade practice."
During a recent hearing at the United States District Court in Worcester, Mass., a lawyer for Wells Fargo denied that. The bank is trying to get the case dismissed.
Meanwhile, similar cases are now being brought against the major banks in other states.
Wells Fargo's Response — A Missing Document
Wells Fargo's lawyers declined to be interviewed for this story. But a bank spokesman, Tom Goyda, defended the bank's decision to foreclose on the Voltaire family.
"We worked with the Voltaires for more than a year in an effort to find an option that would allow them to stay in their home," Goyda says. "That's our ultimate goal in these situations. But we were never able to obtain all the documentation required and as a result, unfortunately, we needed to do a foreclosure sale."
At the hearing, the Wells Fargo attorney said the one missing tax document appeared to be what derailed the loan modification.
Voltaire was at the courthouse. She sat shaking her head as she heard Wells Fargo claim again that it took her house because of this simple tax form.
"It was frustrating to hear those things," she says. "I did everything they asked me to do."
While the litigation goes forward, Wells Fargo is allowing Voltaire to stay in the house while she keeps making payments.
Klein, Voltaire's attorney, is seeking injunctions to stop thousands of foreclosures across the state until the case is resolved.