FierceFinance readers know that banks have all too often wrongfully foreclosed on homes, and in the process evicted the wrong people. This is most often a case of the local contractor botching their assignment, and then not owning up to it. The New York Times has dug up some more cases in an article headlined "When Banks Break Into Homes." The mistakes sometimes involve a local contractor entering a house, throwing out all the belongings and changing the locks.

We've noted that this sort of "vendor risk" is not one to be taken lightly. The ripple effects can be profound, as the rising tide of news about this certainly will not help banks' standing in state courts and bankruptcy courts.

Banks and their local contractors insist the number of mistakes "is minuscule given the hundreds of thousands of new foreclosure cases filed each month," notes the Times. "Bank of America, for instance, says it works with third-party contractors to inspect and maintain more than one million properties each month and has enhanced its controls in the last year to prevent mistakes."

Bank of America (NYSE: BAC) would be wise to publicize what these enhanced controls are. The bank would also be wise to recognize that it will make more of these mistakes in the future given the magnitude of the foreclosure proceedings. More wrongful evictions are a given. The bank should consider a clearly articulated course of action for people who have been wronged in this manner, with step-by-step instructions.

For more:
- here's the Times article

Related Articles:
New Jersey judge to suspend foreclosures?
Two states sue Bank of America over foreclosures, modifications
Wrongful evictions, foreclosures still making news
Happy Holidays! No foreclosures by banks, GSEs