Bank of America Slammed with Another Class Action for Refusing to Participate in Foreclosure Prevention Programs

Bank Slammed With Another Class Action

By JOE HARRIS

ST. LOUIS (CN) – The seemingly endless string of class actions against Bank of America’s foreclosure policies continued here in Federal Court. The class claims that BofA and BAC Home Loans Servicing refuse to participate in foreclosure prevention programs despite taking $25 billion in Troubled Asset Relief Program money.

Lead plaintiff Susan Fraser says Bank of America, by accepting the TARP money, agreed to participate in at least one TARP-authorized program to minimize foreclosures. The complaint echoes similar complaints filed last week by the attorneys general of Arizona and Nevada. BAC Home Loans Servicing is also named as a defendant in the St. Louis complaint.
Bank of America signed a contract with the U.S. Treasury on April 17, 2009 agreeing to comply with the Home Affordable Modification Program (HAMP) to perform loan modifications and other foreclosure prevention services, the St. Louis complaint states.

The class claims the HAMP program requires Bank of America to identify loans that are subject to modification; collect financial and other personal information from the homeowners to evaluate whether the homeowner is eligible for modification; institute a modified loan with a reduced payment amount as per a mandated formula that is effective for a three-month trial period; and provide a permanently modified loan to those homeowners who comply with the requirements during the trial period.

“Though Bank of America accepted $25 billion in TARP funds and entered into a contract obligating itself to comply with the HAMP directives and to extend loan modifications for the benefit of distressed homeowners, Bank of America has systematically failed to comply with the terms of the HAMP directives and has regularly and repeatedly violated several of its prohibitions,” the complaint states.

“Under HAMP, the federal government incentivizes participating servicers to make adjustments to existing mortgage obligations in order to make the monthly payments more affordable. Servicers receive $1,000 for each HAMP modification. However, this incentive is countered by a number of financial factors that make it more profitable for a mortgage for a mortgage servicer such as Bank of America to avoid modification and to continue to keep a mortgage in a state of default or distress and to push loans towards foreclosure. This is especially true in cases where the mortgage is owned by a third-party investor and is merely serviced by the servicer such as Bank of America. On information and belief, Bank of America does not own a significant majority of the loans on which it functions as a servicer.”

Fraser says the financial factors that discourage Bank of America from fully participating in HAMP include having to repurchase loans to modify the loan and its collection of default fees.

“Rather than allocating adequate resources and working diligently to reduce the number of loans in danger of default by establishing permanent modifications, Bank of America has serially strung out, delayed, and otherwise hindered the modification processes that it contractually undertook to facilitate when it accepted billions of dollars from the United States,” the complaint states. “Bank of America’s delay and obstruction tactics have taken various forms with the common result that homeowners with loans serviced by Bank of America, who are eligible for permanent loan modifications, and who have met the requirements for participation in the HAMP program, have not received permanent loan modifications to which they are entitled.”

The class consists of all eligible homeowners who have been serviced by one or both defendants who have not received a permanent modified loan. The class seeks an injunction and damages. It is represented by Michael Flannery with Carey Danis & Lowe.

Complaint Below…

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4closureFraud.org

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Susan Fraser, Plaintiff, v. Bank of America, N.A. and BAC

Comments
7 Responses to “Bank of America Slammed with Another Class Action for Refusing to Participate in Foreclosure Prevention Programs”
  1. Flex says:

    Isn’t that Amazing we don’t hear much about City Bank, Chase, Wells Fargo, and many others like HSBC and US Bank in all this ordeal? However, all the banks that took TARP money signed the same agreement, and yet in the last year and eleven months so far, not even a 3% or 4% of loan modifications were done by these financial institutions. They claim they don’t hold the portfolio of the investors and yet they are the ones servicing the loans. As we all know now, the servicers don’t have any intentions of modifying any loans, since there is not incentive for them to do so. They make more money by charging all the abusive and inventive fees they can create when they foreclose people’s homes.
    At foreclosure, the servicers get paid 20 or 30 thousands dollars per home and sometimes they may even keep the money, because many investors or lenders that were the holder of the notes are gone and out of business.
    Remember since 2007, we had more than 130 banks gone out of business each year.
    We don’t know what is going on behind the scenes with the FDIC after they take these banks and close them down. I heard that many of the big banks who took the TARP money are the ones who are buying all these little banks who got out of business, just like the case of Indymac Bank now owned by One West Bank, FSB.
    The FDIC is making many deals with many banks out there. Who knows if the European Banks are also part of this scheme. We don’t hear the real truth behind Deutsche Bank, Credit Swiss, or NY Mellon Bank.
    As we know, Deutsche Bank is suing BofA for $47 Billion Dollars. It only takes one bank to win a case to put BofA out of business. Rumors has it that BofA will be out business on 2011 by all the secrets that will come out from weekileaks. But, if we want BofA out of business now, why don’t we all just walk in every BofA in the country and withdraw our money and put it in a local credit union?
    This is why we continue paying the price from all the banks in the U.S. We are so lazy by nature and we can not get out of our comfort zone and withdraw our accounts. We love our banks and we love our free checking and savings accounts that only pays us 2.5% to 3.0% annually.
    America, Do you want to stop the pain? Withdraw all your money from all the too big to fail banks and the foreclosure will stop immediately. If the banks don’t have any deposits, they can not borrow and they can not lend money to anyone. It virtually puts them out of business overnight.
    The treasury is not going to give another bail out of billions of dollars this time. The public will not stand for it, after what they know what the banks did with the first bail out of more than $700 billion dollars.
    Also, next two years are campaign rally all over again for the next election in 2012. Do you really think Obama will make that mistake again? Unless, he is done with the Presidency and will not care what happens next.
    This may be the case if the Tea Party gets momentum and the majority of the people register and vote for them. For what I heard, the Tea Party is coming out with some amazing proposals and ideas that will blow your mind from education to health care to unemployment benefits. The Tea Party will put everyone to work and earn a day worth of living for everyone. This will change the face of America for ever and will teach the world what the real America is all about. Look out for millions of University Students ready to vote. Remember like our parents said, the youth is the future of America.

  2. Kathy W.http://4closurefraud.org/message-board/#comments says:

    All I wanted was to sell my home. With the housing market having slowed to the point homes weren’t selling and although I had a buyer to do a short sale, B of A interfered with the process. The buyer walked away and I am left with a house in trouble. Thought B of A was my legit lender since they bought out Countrywide. However, my Deed of Trust says another mortgage lender, Ace Mortgage who doesn’t exist anymore, is on the lien. No new assignments since I refinanced with Ace Mortgage, February 2008. I have a clouded title! Can’t sell my home. Still getting bills every month. Not paying another dime until I am shown legal proof of who owns my note…. B of A saying, according to MERS that they have been my lender since FEBRUARY 2008…. UH, NO YOU HAVEN’T!!!!

  3. Jerry Rage says:

    It isn’t only BOA, it’s every bank who took the TARP and subsequent handouts, my favorite being Capital One Bank NA. Nothing the Goverment has added to this mess has any teeth that requires the servicers to do anything other then do what’s best for their business. Aside from grifting the taxpayers dollars, they could at least work with people rather then ejecting them onto the street. This is an OUTRAGE!

  4. housemanrob says:

    The wealthy or wealthy enough are sedated with holidays, turkey,nostalgia and sentimentality. Until they wake up, nothing will change and it may take that last catastrophic financial disaster to make them see that the light at the end of their tunnel is a freight train headed their way……for until the cobwebs clear we will not have the support of all of us as one…….and we must all be as one to beat this monster……..we created?

  5. Officer of the Law says:

    Since Bank of America doesn’t want to participate in loan modifications under HAMP and since home values have tanked, BoA must have some other incentive for foreclosing as often as possible. I wonder if BoA got a deal with their minions in DC that gives them tax money to foreclose like the crooked connnected banksters who took over IndyMac did. For more on that deal which pays more to foreclose than to modify home loans, see this report at http://www.thinkbigworksmall.com/mypage/archive/1/29027

    The folks in DC tell us that they are trying to help homeowners, but then they give banksters our tax money to foreclose.

    Prosecutors tell us that bribery, fraud and theft are crimes, but they will not prosecute the banksters or their minions in government.

    Perhaps if some concerned citizens on a grand jury get their hands on information about these crimes and information about their power to indict even if the prosecutors don’t want them to, we might see law and order restored. If not, we will continue down the path to life in a third world country.

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