A couple of factual problems with this.
1 Even the much despised Washington Mutual includes as boilerplate in their pre-foreclosure collection letters and their acceleration letters an invitation to let them know if you are on active duty. I cannot believe there is a bank or mortgage lender in the country that isn't aware of this, or that doesn't include as a routine matter the disclosure. I wonder how effective his notice to them was.
2 The home and any fixtures attached to the property were taken as security for the mortgage - but not the furnishings. No lender would make a claim to the contents - the movable personal property inside the house.
Is this a case (typical) of an automatic bank system/procedure kicking in? Usually when such things occur it is VERY difficult to find someone willing or able to intervene as employees HATE sticking their necks out