Just two days ago, I blogged about how title insurance may play a big role if foreclosed homeowners should come back to haunt the banks by trying to reclaim ownership. This issue particularly strikes a cord with me, as I became a homeowner recently – purchasing a property a bank had foreclosed on.

Well, what I imagined could happen had already happened last Saturday. Down in Simi Valley, a suburb of LA, a family broke back into the house that the bank had taken away from them. With the local ABC news film crew invited to the move/ break-in, the family of 11 reclaimed the house they say they were illegally evicted from. The scary part is that the vacant home had already been sold to new owners.

A family claims they were illegally evicted, and Saturday, they broke the locks and started moving back in even though the home has already been sold. Jim and Danielle Earl, along with their nine children ranging in age from 3 to 23, returned to their house of nine years on Mustang Drive.

Like many foreclosure scenarios, the family had fallen behind on their mortgage payments when the economy tanked. And like many homeowners, they had used their house as a piggy bank during the hey day. As reported on HousingWatch.com:

The Earls originally purchased the house for $500,000 in March 2001. Due to some refinances to take out equity, they owed at least $880,000 on a no-interest mortgage loan by the time of foreclosure.

With the backing of a lawyer, the family decided to break back into their house before the new owners moved in. The family and lawyer are claiming that the bank had committed fraud in their foreclosure process.

But the bigger issues, says their attorney, Michael Pines, is that the lender fraudulently foreclosed upon their six-bedroom, five-bath home. “When I felt comfortable from a legal standpoint that they had a basis for moving back in, they did so on my recommendation,” says Pines. “The bank used the usual fabricated and forged documents to foreclose,” the Earls wrote in their court petition, in which they describe signatures by bank personnel that do not match, from document to document — an indication to them that documents were not properly reviewed and were fabricated.

As the banks are still continuing their review and pausing the homes on their foreclosure dockets, it seems no one is sure what to make of this, not even the police.

Police arrived at the home Saturday but did not take action to make the family leave.

Since law enforcement is allowing this for now, it might prompt other foreclosed homeowners to try this tactic. Will this be first of many “break back ins” to come?