State of Arizona vs. Countrywide, Bank of America, et al – Office of Attorney General Terry Goddard Charges Bank of America with Mortgage Fraud

Office of Attorney General Terry Goddard

AZ State Seal

Terry Goddard Charges Bank of America with Mortgage Fraud

Complaint Below…

(Phoenix, Ariz – Dec. 17, 2010) Attorney General Terry Goddard announced that his Office today filed a lawsuit against Bank of America Corporation and its affiliated companies (“Bank of America”) alleging violations of the Arizona Consumer Fraud Act and violations of the consent judgment entered in March 2009 between Arizona and the Countrywide companies owned by Bank of America.

The lawsuit, filed in Maricopa County Superior Court, was triggered by hundreds of consumer complaints and follows a year-long investigation into Bank of America’s residential mortgage servicing practices, particularly its loan modification and foreclosure practices.

Goddard stated that Bank of America, the nation’s largest residential mortgage loan servicer, should be leading the way out of the country’s foreclosure crisis. Instead, he said, “Bank of America has been the slowest of all the servicers to ramp up loss mitigation efforts in response to the housing crisis. It has shown callous disregard for the devastating effects its servicing practices have had on individual borrowers and on the economy as a whole.”

The complaint asks the court to hold the defendants in contempt for violating the consent judgment and to order them to pay restitution to eligible consumers and civil penalties, attorneys’ fees, and costs of investigation to the State. It further asks the court to order the defendants to pay up to $25,000 for each violation of the consent judgment and up to $10,000 for each violation of the Arizona Consumer Fraud Act.

Goddard noted that Arizona has been particularly hard hit by the foreclosure crisis, as evidenced by recent reports ranking the state second behind Nevada in foreclosures. Nevada plans to file a similar lawsuit against Bank of America today.

The consent judgment was entered into on March 13, 2009 to resolve the Attorney General’s allegations that Countrywide had engaged in widespread consumer fraud in originating and marketing mortgage loans. In the judgment, Countrywide agreed to develop and implement a loan modification program for certain former Countrywide borrowers in Arizona. Bank of America acquired Countrywide on July 1, 2008 and has assumed responsibility for Countrywide’s compliance with the consent judgment.

The complaint filed today alleges that, since the consent judgment was entered, Bank of America has repeatedly violated the judgment’s provisions related to loan modifications. Instead of providing the relief to which eligible homeowners were entitled, Bank of America has failed to make timely decisions on modification requests and proceeded with foreclosures while modification requests were pending in violation of the agreement.

The complaint also alleges that Bank of America has violated the Consumer Fraud Act by misleading Arizona consumers about its loss mitigation process and programs, including matters such as:

  • Whether homeowners must be delinquent on their mortgage payments to be considered for a loan modification.
  • How much time it would take to receive a decision from Bank of America on a modification request or a short sale request.
  • Whether foreclosure would proceed while a modification or short sale request was pending, or while a homeowner was making trial payments.
  • Whether the homeowner had been approved for a loan modification.
  • Failure to provide valid reasons why the homeowner was declined for a modification.
  • Whether the homeowner would be approved for a permanent modification if the consumer successfully made all trial modification payments.

As a result of Bank of America’s deceptive practices, many homeowners who were already contending with other financial hardships have been led to unnecessarily deplete their dwindling savings in futile attempts to obtain the promised relief and save their homes. Many homeowners who tried to obtain a modification from Bank of America ended up owing more principal on their loans or having less equity (becoming more “underwater”) in their homes. Others gave up their chances to pursue other financial options, such as short sales, while trying to modify their loans with Bank of America. These consumers endured months of frustrating delays, not knowing whether or when they would lose their homes. They called Bank of America and resubmitted their paperwork over and over again in futile efforts to get the help they were promised.

“I am filing this lawsuit today because, after years of delay and broken promises, Arizonans should not have to wait any longer to seek redress,” Goddard stated. “Our homeowners and communities need and deserve relief. Bank of America must be held accountable for its deceptive conduct and failed commitments.”

This case is being handled by Consumer Advocacy Division Chief Susan P. Segal and Assistant Attorney General Carolyn R. Matthews.

Goddard urged all homeowners who are in or are facing foreclosure to seek assistance as soon as possible. Homeowners can speak with a HUD-approved housing counselor by calling the Arizona Foreclosure Prevention Helpline toll-free at 1-877-448-1211. Borrowers who believe they have been the victim of mortgage fraud or other scams should contact the Attorney General’s Office at (602) 542-5763 or by filing a complaint on the Attorney General’s website, at www.azag.gov. Additional foreclosure prevention resources are also available on the Attorney General’s website.

mp3 Terry Goddard on Bank of America Mortgage Fraud.mp3

SOURCE: Arizona Attorney General

See Also:

State of Nevada vs Bank of America – Nevada Attorney General Sues Bank of America for Deceiving Homeowners

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4closureFraud.org

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State of Arizona vs. Countrywide, Bank of America, et al
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2009 Arizona vs Countrywide Consent Judgment
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Arizona Borrower’s Bill of Rights
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FAQ’s regarding the State’s Lawsuit against Bank of America
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Comments
9 Responses to “State of Arizona vs. Countrywide, Bank of America, et al – Office of Attorney General Terry Goddard Charges Bank of America with Mortgage Fraud”
  1. Carolina Bagnarol says:

    Why only Bank of America? Why are they not filing lawsuits at the fraudulent practices of Wells Fargo Bank and all the others?

    I have been involved in a wrongful foreclosure involving Wachovia Bank now owned by Wells Fargo Bank. Fraught with forgeries and fraudulent practices – of which we are just one of millions. foreclosure obtained with forged and fraudulent documents. Evictions sought with the same forged documents. Summary Judgments sought and granted, all with forged and fraudulent documents. The judges of the San Mateo County Supreme court all on board with the banks.

    The attorneys representing Wells Fargo Bank (Jeremy Shulman) has been fore warned of proceeding with the forged documents – only to scoff and proceed. The greed and corruption of the banks and their gatekeepers need to be prosecuted same as you and I if we commit fraud.

    When will the lawsuits by the AG’s be leveled against all banks, for the same fraudulent practices?

    When will any of the players in this fraud ever see the inside of a jail cell, loose their licenses to practice their form of law?

    Too little, too late for too many!

  2. Homeless for the Holidays says:

    want recommendation of great realestate legal firm want to hire a lawyer here in Arizona

  3. Phxhomeowner says:

    Finally! I knew we couldn’t be the only one’s being tortured by this evil entity. Why aren’t the journalist’s on this?

  4. LAWYERS WHO FILE FORECLOSURES SHOULD BE INVESTIGATED http://chn.ge/eU2zAm

    Scores of homeowners do not contest foreclosures because:
    1. They don’t have knowledge of the law in order to recognize which aspects of foreclosure are legally challengeable or even fraudulent.
    2. Even those who identify wrongdoing, lack funds to pay for attorneys to represent them.
    3. Homeowners are told to come to foreclosure auctions with money that they do not have, so they stay away from foreclosure auctions.

    These homeowners are oblivious about sometimes “straw buyers” and sometimes lawyers in charge of foreclosures, obtaining illegal ownership of people’s homes, and pay literally nothing through “credit bids;” and that those recorded deeds from such auctions are Null! For these very reasons, there needs to be a probe of lawyers who file foreclosures.

    Also, the average lay person doesn’t know about legal requirements of “standing” that prevents their homes from being repossessed via non-existent lenders, or via lenders who have no ownership of promissory notes.

    Yet, courts are supposed to enforce “standing” and compliance with established laws! Illegal, defective, fraudulent foreclosure causes useless deeds for property sales; title insurance denials –and more.

    Further, after certain foreclosure auctions (via simulation) result in fraudulent –NOT lender acquisitions, by lawyers or straw buyers, the common scenario becomes property flipping, neighborhood blight, rodents, and so on!

    *Sample of 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
    – 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 a “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, and invites rodents, vagrants
    – Thousands of families made unlawfully homeless from null foreclosure proceedings

    Foreclosure lawyers are officers of the court. Lawyers are required to know applicable laws and civil procedure. This knowledge is not required of mortgage lenders, nor loan servicers.

    *more @ Request for Congressional Foreclosure Panel to Examine Foreclosure Lawyers
    http://www.change.org/petitions/view/request_for_congressional_foreclosure_panel_to_examine_foreclosure_lawyers#

  5. Whippy FLoggman says:

    Lawman…………IGNORANT JUDGES sums it up! But what about Incompetent as well? Glad to see AZ is on this, but the AG should have included DOCUMENT FRAUD AS WELL!

    I wish FLORIDA’s AG was on with this , but BILL MCCULLOM is a PRO-BANKER defender. Lip Service from a Empty suit is all he delivers on this matter.

  6. tyler says:

    wiki leaks will destroy bank of america.

  7. LVLawman says:

    It’s about time. Our clients, and other unrepresented homeowners, have been getting this runaround for years without the ability to get relief from B of A or the courts (in most instances) despite filing legal actions including Motions For Injunctive Relief, Breach of Contract, etc. The only court generally willing to play by the rules in these non-judicial foreclosure states are the Bankruptcy Courts.

    Maybe, the ignorant judges elected by an uniformed public to the states benches will start to “get it” now and fear being held accountable in some future election.

    Hope springs eternal.

    • Haley Shea says:

      Please send me the names of attorneys who will give free advice about the rights of people who’s homes were foreclosed illegally. I am very ill and disabled and my house was foreclosed on June 1st and I am being harassed by many people thet say they bought the house (no one has shown me any deeds). My realtor says it did sell at aution to the peoplwho were trying to put thru a short -sale. I wasn’t informed it wouldn’t go thru until 6PM the night before the sale.

      My bank lied to me about so many things and I have loan m,odification documents they offered me with totally incorrect figures that they refused to go over. They said they didn’t need to prove the figures were correct, even thouhg HUD, a loan mod atty and I a former loan underwrite came up with different difures. We came up with figures close the the loan mod they offered 6 months earlier and then said wasn’t available any long and shouldn’t have been sent. the loan balance, interest rate and tesm of loan were al the same, yet pay,ent amount was hundreds different.

      No one would tell me where my forebearance m,oney went to and they said they didn’t have to. I poke to over 120 people and have document almost everything. They gave me wrong or mis-information over 100 times! And they even flat out lied when they knew they were not telling me the trust. They should learn how to use the “hold” button on their phones.

      What I need is an atty who I can get free advice from ADAP. I am very ill, unable to pay for an atty and can’t get thru to the volunteer atty lines. I ned to know my rihgts about suing B of A, living in the house and eviction, what I can take, suing B of A and contesting the foreclosure.

      I am very ill, please help if you can give me names of honest, authentic attorneys who can take my case of at least give me some adive.

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