In the bankruptcy case of Viet Quoc Nguyen here in the Southern District of Texas, the debtor had sent Wells Fargo the full amount of money to bring his home loan current before a scheduled foreclosure sale. So what's the problem? He sent a personal check, which Wells Fargo would not accept as payment to stop a foreclosure. So they foreclosed anyway, and apparently bid a credit at the foreclosure sale against what Mr. Nguyen owed them, and obtained title to the house.
Mr. Nguyen then filed chapter 7 bankruptcy, and filed an adversary proceeding or lawsuit in bankruptcy court, alleging that the foreclosure was an "avoidable preference" under Sections 522(h) and 547 of the Bankruptcy Code. Wells Fargo file a "motion for summary judgment," asking the Court to throw out the lawsuit.
Judge Marvin Isgur denied the motion on April 9, 2013, saying in his opinion that the debtor has "standing" to bring the lawsuit, as "Section 522(h) allows a debtor to avoid a transfer of exempt property if the trustee could have avoided the transfer under § 547 ..and the trustee does not do so."
While it's not clear if Mr. Nguyen will prevail on his case yet, it's a good start. We get calls every month from people that have been foreclosed on, and want to file bankruptcy to seek to reverse it. Hopefully Wells Fargo will do the right thing, and just rescind Mr. Nguyen's foreclosure sale.
p.s. I'll post the opinion on another page of this website, to find it go to the Google search box on the home page, and type: Viet Quoc Nguyen .