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From NPR News, this is ALL THINGS CONSIDERED. I'm Audie Cornish.

We begin this hour with a story about one family that is losing its home due to foreclosure. It provides a window into a much larger story about whether banks have been improperly foreclosing on thousands of homeowners. Prosecutors are looking into that. The banks say they do not seize people's houses without justification. But this family's case suggests otherwise and it has joined a lawsuit against Wells Fargo.

NPR's Chris Arnold has the story.

CHRIS ARNOLD: At her home outside Boston, Jennifer Ryan-Voltaire is getting ready for Christmas.

Ms. JENNIFER RYAN-VOLTAIRE: Yeah, we've got the tree up. We've decorated the outside of the house. You know, we're trying to get into the spirit of things, despite what's going on.

ARNOLD: Voltaire has three kids. The youngest is six years old, and she hasn't told them that, actually, the family doesn't own this house anymore. Wells Fargo recently foreclosed on her and for now the family's still living here, but the bank owns the house.

Ms. RYAN-VOLTAIRE: You know, 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.

ARNOLD: Voltaire's an office manager at a medical practice. The family bought the house in this middle class neighborhood four years ago. They've always made their mortgage payments. But after Voltaire's husband had his hours cut back at work a year ago, they just couldn't afford their loan anymore. So they applied and got into the Obama administration's loan modification program. That starts out with a trial period.

So, Voltaire started making lower monthly payments while faxing in proof of income and other documents to Wells Fargo. But she says the bank kept losing the paperwork.

Ms. RYAN-VOLTAIRE: We're missing a tax document. Well, no, you're not because I spoke to this person on this day who said that they had everything. Here's the fax cover sheet that I had that says I sent it over to you.

ARNOLD: This dragged on for more than six months. But Voltaire said she always re-sent anything that the bank wanted and so she thought everything was OK -that is, until her cousin, who lives across the street, looked over one day this past July and saw an auctioneer from the bank standing in the front yard, selling the house.

Her cousin, Melissa Mercogliano.

Ms. MELISSA MERCOGLIANO: There was, like, 30 people outside the house. And I'm, like, wait a minute, this house is not up for sale.

ARNOLD: So Mercogliano went running over, waiving her arms and yelling that this house is not for sale.

Ms. MERCOGLIANO: And he's, like, yeah, it is. She doesn't own the property.

Ms. RYAN-VOLTAIRE: So while I'm at work, she called me to tell me, oh my God, there's people in front of your house, like, auctioning off your house. And I'm at work and I'm trying to call Wells Fargo, like, what the hell is going on here?

ARNOLD: Voltaire said she knew Wells Fargo had said that they were missing a tax document again and had scheduled a foreclosure. But she says that she faxed that in and a call center worker had told her that once again they now had all the documents that they needed and they would call off the foreclosure sale.

Ms. RYAN-VOLTAIRE: And now I'm finding out, yes, they did put in a request to postpone the auction, except that nobody responded to their email. I said, well, call the guy and tell him to stop. Oh, well, we have no way of contacting him.

ARNOLD: So this is while the auction's going on in front of your house?

Ms. RYAN-VOLTAIRE: This is while there's 30 people in front of my house auctioning off.

ARNOLD: Voltaire said when the buyers who showed up at the auction saw neighbors running and yelling into cell phones, that apparently scared everybody off. And she says that nobody bid on the house. So the bank ended up foreclosing and taking ownership. Voltaire was shocked, since she'd always made all of her payments and appeared to be qualified for permanent help through this federal program.

Ms. RYAN-VOLTAIRE: What they did is illegal. Like, how do you just take someone's house?

ARNOLD: Wells Fargo maintains that there was nothing improper about this foreclosure. And that might've been it for Voltaire's house, but as she started calling local law firms, casting around asking for help, she got put in touch with one that just happened to be in the process of suing Wells Fargo on behalf of homeowners like her.

Mr. GARY KLEIN (Attorney): I think very clearly the bank made a mistake.

ARNOLD: At the federal district courthouse in Worcester, Massachusetts this week, Gary Klein was on his way through security to a hearing before a federal judge.

Mr. KLEIN: This is something that we see over and over again. People are sending in their documentation and still get denied.

ARNOLD: Klein heads up a team of lawyers seeking class-action status for lawsuits against just about all of the major banks: Wells Fargo, JPMorgan Chase,´┐ŻBank of America´┐Żand others.

Kevin Costello is another attorney on the legal team. He says banks too often fail to fulfill their contractual obligations to homeowners under this federal program.

Mr. KEVIN COSTELLO (Attorney): The documents are continually lost. The modification is not forthcoming. The way that Wells Fargo has behaved constitutes an unfair and deceptive trade practice. Its a violation of Massachusetts consumer protection law.

ARNOLD: In the hearing, 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, too. Wells Fargo's lawyers declined an interview with NPR. But over the phone, a bank spokesman, Tom Goyda, defended the bank's decision to foreclose on Jennifer Voltaire.

Mr. TOM GOYDA (Spokesman, Wells Fargo): Well, Chris, I can tell you that 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. 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 had to go to a foreclosure sale.

ARNOLD: When you say the documentation, you mean this one tax form that she says she sent in a bunch of times but Wells Fargo says that they never got it?

Mr. GOYDA: I can't go into the specifics of the exact documentation.

ARNOLD: The Wells Fargo lawyer, however, at the hearing did state that this one missing tax document appeared to be what derailed the loan modification.

Jennifer Voltaire was at the courthouse and she sat shaking her head as she heard Wells Fargo claim again that they took her house just because of this simple tax form.

Ms. VOLTAIRE: It was frustrating to hear those things. I did everything they asked me to do.

ARNOLD: While the litigation goes forward, Voltaire is now being allowed to stay in the house and to keep making payments.

Through his lawsuits, Gary Klein wants injunctions stopping thousands of other foreclosures across the state until the litigation is resolved.

Chris Arnold, NPR News, Boston.

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