A new lawsuit says Bank of America Corp. misled borrowers trying to hang onto their homes, pushing them into foreclosure while it enriched itself off a federal mortgage-modification program.
The suit, filed this month in federal court in Charlotte, North Carolina, is the latest to allege the Charlotte-based company abused homeowners seeking to reduce their mortgage payments through the Home Affordable Modification Program. The U.S. Treasury Department launched the program in 2009 following the financial crisis to help struggling homeowners avoid foreclosure. Brought by 11 borrowers across the United States, including one in North Carolina’s New Hanover County, the suit was initially filed last month in Mecklenburg County Superior Court before being moved to federal court. The suit says it involves individual borrowers after a federal judge in Massachusetts in 2013 denied a request to grant class-action certification for a case against BofA involving HAMP applicants from across the country. In issuing that rejection, the judge determined that borrowers had been subjected to a “Kafkaesque bureaucracy” and that they had plausibly alleged BofA “utterly failed” to administer modifications in a timely and efficient way. But the judge also said the various claims were too different to justify folding them into a single class-action case. In a court filing addressing the latest suit, BofA made a similar argument, saying the 11 borrowers were improperly filing a single case when their claims were distinct and unrelated. The bank declined to comment beyond the filing. Many allegations in the new case are similar to, or cite, those made in previous lawsuits against BofA over its handling of HAMP applicants. Among claims in the latest suit:
The North Carolina borrower, Chester Taylor, contacted the bank in 2010 to request a modification after experiencing financial hardship in part because of the down economy, the suit says. Taylor stopped making his mortgage payments on the advice of a bank representative, fell into default and BofA foreclosed on his home in 2012. As a result of the foreclosure, a judgment of $117,130 was entered against Taylor, who then filed for bankruptcy. BofA has previously attracted the scrutiny of government authorities for its conduct under HAMP. In 2012, it entered into a settlement with authorities to resolve claims it defrauded the program as part of a landmark $25 billion settlement involving other large banks accused of mortgage and foreclosure abuses. Last year, the special inspector general for the Troubled Asset Relief Program, the federal bailout program for the financial system, issued a report to Congress that said BofA had denied 79 percent of HAMP applicants. That performance required deeper Treasury scrutiny into whether the bank is properly evaluating homeowners, according to the report. The bank has one of the worst track records in HAMP, the report said, adding: “This should be unacceptable given that Bank of America has already received about $2 billion from Treasury for HAMP.” |
e-mail writer: droberts@charlotteobserver.com |
FREE CALCULATORS TO HELP YOU SUCCEED
Tools for Your Next Big Decision.
Amortization Calculator
Affordability Calculator
Mortgage Calculator
Refinance Calculator
FHA Mortgage Calculator
VA Mortgage Calculator
Real Estate Calculator
Tags
Pre-Approval Resources!
Making well educated decions in a matter of minutes and stay up to date on the latest news Mortgage Daily has to offer. Read our latest articles to stay up to date on what’s going on…
Resource Center
Since 1998, Mortgage Daily has helped millions of people such as yourself navigate the complicated hurdles of the mortgage industry. See our popular topics below, search our website. With over 300,000 articles, we are guaranteed to have something for you.
TOP SEARCHED TOPICS
Your mortgages approval starts here.
Add 1-2 sentence here. Add 1-2 sentence here. Add 1-2 sentence here. Add 1-2 sentence here. Add 1-2 sentence here.
Stay Up To Date with Today’s Latest Rates
Mortgage
Today’s rates starting at
Home Refinance
Today’s rates starting at
Home Equity
Today’s rates starting at
HELOC
Today’s rates starting at