Class Action – Bank of America Sued by Homeowners for Withholding Federal Bailout Funds
Bank of America Home Loans
- Date Filed: March 22, 2010
- Court: U.S. District Court
- Location: Seattle
- Ticker Symbol: BAC
Washington homeowners sued Bank of America claiming the lending giant is intentionally withholding government funds intended to save homeowners from foreclosure. Hagens Berman represents plaintiffs in the class-action lawsuit. Attorneys are interested to speak with other eligible home owners who were intentionally deferred or wrongfully declined a permanent mortgage adjustment per the Home Assistance Modification Program (HAMP).
The case, filed in U.S. District Court, claims that Bank of America systematically slows or thwarts Washington homeowners’ access to Troubled Asset Relief Program (TARP) funds by ignoring homeowners’ requests to make reasonable mortgage adjustments or other alternative solutions that would prevent homes from being foreclosed.
Bank of America accepted more than $25 billion in government bailout money financed by taxpayer dollars earmarked to help struggling homeowners avoid foreclosure. One in eight mortgages in the United State is currently in foreclosure or default.
Bank of America, like other TARP-funded financial institutions, is obligated to offer alternatives to foreclosure and permanently reduce mortgage payments for eligible borrowers struck by financial hardship but, according to the lawsuit, hasn’t lived up to its obligation.
Bank of America services more than 1 million mortgages that qualify for financial relief, but have granted only 12,761 of them permanent modification, reported the U.S. Treasury Department.
According to the TARP regulations, banks must gather information from the homeowner, and offer a revised three-month payment plan for the borrower. If the homeowner makes all three payments under the trial plan, and provides the necessary documentation, the lender must offer a permanent modification.
Bank of America continues to ignore TARP regulations and instead creates more financial pressure on homeowners, the court filing states.
The lawsuit charges that Bank of America intentionally postpones homeowners’ requests to modify mortgages, depriving borrowers of federal bailout funds that could save them from foreclosure. The bank ends up reaping the financial benefits provided by taxpayer dollars financing TARP-funds and also collects higher fees and interest rates associated with stressed home loans.
If you received an inadequate response from Bank of America for a home loan modification request after April 13, 2009, you are encouraged to join the suit.
Please visit: www.hbsslaw.com for more info.
About Hagens Berman
Hagens Berman Sobol Shapiro LLP is a consumer-rights class-action law firm with offices in San Francisco, Seattle, Chicago, Boston, Los Angeles, and Phoenix. Since 1993, HBSS continues to successfully fight for consumer rights in large, complex litigation. More about the law firm and its successes can be found at www.hbsslaw.com.