The Attorneys General of Arizona and Nevada have sued Bank of America for violating consumer protection laws in the loan modification process. The civil lawsuits allege that BofA’s servicer is defrauding homeowners who try to modify their mortgages, telling them they would get a permanent modification and then rejecting their applications and evicting them. In addition, according the the lawsuits BofA is violating a settlement from a 2009 lawsuit against Countrywide, now owned by BofA, to modify loans of homeowners who were victims of predatory lending.
Hundreds of homeowners kept making their mortgage payments because Bank of America repeatedly assured them that their loans were being modified, (Arizona Attorney General) Goddard said. Instead, many lost their homes anyway.
“Those people could have used that money for something else,” Goddard told The Associated Press. “They were deceived into continuing to make mortgage payments when they had no hope of saving their homes.”
Nevada Attorney General Catherine Cortez Masto told the AP that the Silver State’s lawsuit was a last resort to try to get the bank to change its ways. It was filed after several discussions with bank managers led to assurances but little more.
“Clearly there is a disconnect between what Bank of America tells me at the management level and what’s happening on the front line,” Masto said.
Nevada and Arizona are two of the four states with the biggest foreclosure problem, along with California and Florida. Both are non-judicial foreclosure states, and so these lawsuits on consumer protection grounds are one of the few ways to defend homeowners abused by servicers. The Arizona suit calls for $25,000 for each violation of the Countrywide consent agreement, and up to $10,000 for each violation of the Arizona Consumer Fraud Act. The penalties sought in the Nevada case have not been specified.
A recent paper by Georgetown law professor Adam Levitin and Tara Twomey of the National Consumer Law Center shows that servicer problems are widespread, and boil down to a serious incentive problem on the part of third-party loan servicers, who make money off of foreclosures and lose money on modifying the loan and keeping it performing.
So Bank of America is not the only bad actor here, though certainly they are following the general servicer trend. And this set of lawsuits could have an impact on other big bank servicers. In addition, this puts more pressure on the servicers at a time when all 50 Attorneys General are undergoing an investigation of servicer practices and foreclosure fraud.
Unfortunately, Terry Goddard (D) is leaving the Arizona AG’s office in January, after running unsuccessfully for Governor. His replacement, Republican Tom Horne, may simply withdraw the lawsuit. But Goddard had little choice, after attempting settlement talks with BofA over this issue for eight months. Nevada’s Attorney General, Catherine Cortez Masto (D), was re-elected in November, so that problem does not exist.



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Neither mortgage lenders, nor loan servicers are required to know laws and civil procedures that pertain to filing foreclosure pleadings in civil courts as well as bankruptcy courts.
Foreclosure lawyers are officers of the court. The inadequate, questionable, or fraudulent foreclosure pleadings are filed by foreclosure lawyers, not lenders. http://chn.ge/eU2zAm
Unlawful foreclosures are the cause of useless property deeds for real estate sales; title companies reluctance to insure foreclosed properties; and disputes about which lender is entitled to claims mortgage-default benefits.
*LAWYERS WHO FILE FORECLOSURES SHOULD BE INVESTIGATED. Sample of PROVABLE fraudulent foreclosure acts:
–Deliberately use defunct lenders, lenders without “standing” for false civil and bankruptcy foreclosure proceedings.
– Create and conceal malpractice foreclosure delays and engineer billable litigation.
– Orchestrate sham foreclosure auctions; property never acquired by lenders, but ‘straw buyers’
– Commit actionable wrongs (unfair debt collection, fraud, various torts) that create lawsuits
– Self-dealing foreclosures which certain lawyers themselves obtain foreclosed properties for flipping.
–Foreclosures naming defunct lenders, illegally recorded property deeds, flipping, blighted communities.
– Unconscionably create false deficiency judgments against property owners after straw buyers acquire homes for pennies on the dollar.
– Intentionally false Bankruptcy Court “Motion to Lift” and “Proof of Claim” on behalf of non-existent lenders which conceals fact of “NON-SECURED” mortgage debt.
–Involved in fraudulent collection of property damage insurance, as well as mortgage-default insurance.
–Fraudulent foreclosures abet loss of property taxes to city revenue, rodents, vagrants
– Thousands of families made unlawfully homeless from null foreclosure proceedings.
**Request for Congressional Foreclosure Panel to Examine Foreclosure Lawyers
http://www.change.org/petitions/view/request_for_congressional_foreclosure_panel_to_examine_foreclosure_lawyers#
Gov’t regulator refuses to allow mortgage reductions, despite Obama mandate
LINK.
Can they be given the death penalty?
If even one foreclosure led to a suicide or a death from some other cause among the group of evicted then the entire BOA board should get the lethal injection.
We can’t keep treating white collar murders differently from blue collar murders.
Per the paper, they make money on foreclosure up to a certain month, after which they lose money. Compared to the income they’d make if the loan stayed current, they lose money in the foreclosure process. The problem, the paper notes, is that restructurings are labor intensive, which is fatal when the business model is based on volume and economy of scale.
RICO
Death Penalty….I am glad you are not the Dictator of these United States.
What percentage of people getting these loans knew they were gambling because they knew their income was probably insufficient.
If they left the house they were leaving wouldn’t they have to pay rent anyway?
Why is everyone always the victim? What happened to personal responsibility? Sutdies show that even when loans are renegotiated a high percentage default anyway.
If laws were broken then the guilty should pay….but not with their lives. Imagine our ancestors crossing this continent in the early days, comitting suidice when things got tough. What is happening to this country that we can not deal with hardship and become stronger from it.
Regards
Pffft! Like Timmeh would ever let BofA eat a settlement or judgment. It will be the (middle class) taxpayers that eat it.
First of all, I live in AZ and this was terrific news to me, since I am still in negotiations, presumably within the notorious “trial period” in which I am supposed to prove that, although I had an unblemished record previous to applying for HAMP (my mortgage amount exceeded my income by more than 31%,) with no payments so late they incur a late fee, and never having missed a payment, I can still pay the $107.79 lower payment amount. BofA has been stringing me along since last January when I called and applied over the phone. However, that was just the start of the app process. They sent me a package of information to gather and send back within a month and with a return deadline of Feb. 12. I paid my Feb. payment on the 5th of Feb., electronically. That is well within the grace period for payments due on the 1st (I don’t get my SS check until the 3rd every month, so I always pay between the 3rd and the 8th or 9th.) However, my transaction history shows that BofA tried to charge me a late fee on Feb. 11, the very first ever late fee ever charged to my mortgage acct. They have proceeded to charge late fees for every month since then regardless that I don’t see any of them as valid (it was my understanding that the HAMP program is not supposed to cost the homeowner any extra money, per the group the bank has contracted to implement the modifications.) At the very least, no matter how you look at it, the bank was not entitled to a late fee by any standard known to law or man at any time before July.
Not only have I never been late, when they gave me my “trial period payment amount”, they set up autopays with my bank for April, May and June. However, due to some sort of glitch, whatever they set up triggered an autopay I set up to pay my mortgage. So BofA actually got a double payment that month, one a full regular mortgage payment, and one for the lower “trial pmt” amount. Now, the amount of my mortgage is such that the regular mortgage amount could pay that $107.79 difference every month for 6.33 months. The bank claims the basis of the late fees is that the regular mortgage is short by $107.79; ergo, they are entitled to a $59 late fee. I’m also thinking that they are charging late fees on top of late fees, but who know. All I know is that the bank is now claiming I owe them over $1,300 and that I’m several payments behind. Needless to say, I see red and feel my blood pressure rising each time a bank rep tells me this crap. At this point, I feel this case lends credence to my claims and gives me a cudgel to use in defense of their bullying actions and attempts at intimidation. Of course, I still don’t know where to take my rage, but at least I may come out financially still whole.
I agree with you totally. IMO, Timmy (et al, including Ben)is the biggest obstacle to economic recovery today. I don’t think they’ll ever learn to work for the people instead of the Financial MOTU.
Timothy Geitner said a few months back that 40% of the houses in foreclosure remain unoccupied and that that is having a disastrous effect on neighborhoods and causing stress on municipal services .
In European cities , in Germany for instance or the case of Christiana in Denmark , alternatives expressed themselves by squattering vacant buildings, houses and in the aforementioned case of Christiana, an abandoned military base.
Why not stand with those who have lost their homes by putting them back in them through methods such as these ? Seems like a good way to bring attention to the issue, get some free press and provide housing to the homeless and dispossessed in a nation whose people are facing record poverty because of the banks and big business !
Our laws were created for the good of the citizens , the citizens were not created for the good of the laws !
Lets stop commenting on the news and start making some !
http://www.youtube.com/watch?v=7Z5Uvfxd8A0&feature=related
Christiania
5th amendment doesn’t permit transferring private property from an owner to another w/o compensation.
One of the reasons I voted in the midterms was to, hopefully retain our D attorney general. He won. but we’ve got a really BAD Republican governor now, who promised not to cut Medicaid and now say she;s going to.
I just hope she’s not as bad a Brewer in AZ. Nonetheless, Medicaid is on life support here anyway with it being privatized and all.60% of the $$ goes to the HMOs and the hospital chains. The doctors don’t even know, and they take it out on the patients….esp the conservative doctors who think we’re getting something for nothing…while we’re getting nothing for something.
I really fear people are going to start dying from the bad care one gets on Medicaid.
Oh, ( back on topic) we don’t have as bad a foreclosure problem here cause everybody’s poor anyway and if they aren’t renting have already paid their homes off years ago.
I hope everybody remembers that push for “tort reform” ’cause THIS is what it was all about, not medical malpractice; so people couldn’t sue the corporations like this.
It’s practically impossible to sure a doctor now anyway.
As an old White Russian, “When government comes before law, tyranny is not far behind.”
Sounds about right for HAMP.
Another one of Obama’s really great programs that wound up hurting then people it was supposed to help.
Good luck!
Space Invaders – Squat Documentary Part 1
Well reading the first amendment aloud in public shouldn’t have landed Eugene Debs a 10year prison sentence either.
Apparently the laws only apply to 98% of the population but killing millions in an illegal war based on transparent lies, torturing , spying on the american public en masse without a warrant and defrauding millions in the stock market, etc is alright if you have the right connections.
The rule of law is what keeps society civil . Perhaps the elite should consider this before violating them openly.
So you’ve recognized that ongoing pattern of his? If Obama is a Democrat, any more than Clinton was, than I’m a fascist. Peace
Relying on the political partisans in state government to file suits against megabanks is ridiculous. States have neither the money nor the manpower to handle in suits that will take years and involve sifting through truckloads of bank documents. Not only that, but homeowners in the states whose AG’s do not file suits have no chance of obtaining justice.
The Department of Justice should be filing charges against all banks, other lenders and mortgage companies involved in fraudulent activities. It could be done under both the commerce clause and standing criminal law.
While I’m sure the banks are involved in fraud and a lot of other crimes under federal statutes generally reserved to the criminal element, what we’ve already seen of Barack Obama’s administration is a Justice Department who is seeking to find ways around state laws. They have already attempted to make legal the robo-signing of affidavits verifying the validity of the foreclosure documents, including proving that the filer has standing in the court. They want to accept MERS, which is a private company created and financed by a coalition of the banks and some title companies promulgated for the specific stated purpose of avoiding recording fees, which means they are complicit with the banks at skirting state laws. You might even say they are doing the banks’ bidding.
I’ve been involved with the real estate industry since 1987 when I first got my real estate license. I’ve worked for developers, MAI appraisers, and a commercial real estate company who did analysis for brokers, bankers and appraisers. I can tell you that the way these foreclosures are going, and the circumstances under which the original sale took place certainly seems to have put a cloud over titles. In many cases, if buyers cannot get title insurance without exceptions for the actions producing the cloud, likely a buyer that still wants the property will have to file a suit to quiet title or require the seller to take whatever other steps are necessary to make sure any gap in ownership interests in the property are whole again.
One thing is certain: as long as the Obama administration allows these banks to go around like a pack of wild dogs, looting and ravaging their clients with impunity, they will continue their greedy rampage. When the people in charge refuse to reel in offenders, and yes, I mean break up the TBTF banks,it’s time to get new people in charge. I’d blame Timmy and Larry and Ben (oh, my!), but it seems that these are Obama’s men. He’s in love so until we get a better President, we’re probably going to have to rely on the States, whose laws are also being badly infringed, as well as their tax base shrunk due to the actions taken by the banks and the inaction taken by the Federal gov’t, inexcusable though it may be. And if all else fails, we may need to take action ourselves, like hiring a lawyer who will sue the hell out of them and maybe get them to pay our legal fees and perhaps even some punitive compensation for the mental anguish they put us and our society through.