Class of Homebuyers Claims BofA Found a New Dirty Trick
SAN DIEGO (CN) – Bank of America found a new way to illegally extract money from customers, according to a federal class action: deduct taxes and insurance from mortgage payments, even though the homebuyers make those payments themselves, then call the mortgage in default for the unauthorized deductions, and charge late fees and penalties.
Lead plaintiffs Rick and Susan Dolfo say that’s what Bank of America did to them.
“This is yet another tale of Bank of America cheating its customers,” the complaint states. “In 2005, plaintiffs obtained a residential mortgage loan. Bank of America subsequently bought the servicing rights to the loan. From the time the loan was issued, plaintiffs complied with their obligations under the loan agreement. They made their monthly payments, maintained the required homeowner’s insurance coverage and timely paid their property taxes. Nonetheless, in December 2009, plaintiffs noticed on their monthly mortgage statement that Bank of America paid their property taxes and homeowner’s insurance without the plaintiffs’ knowledge or consent, and even though plaintiffs also paid them. To fund the impound account, and without informing the plaintiffs, Bank of America took money from plaintiffs’ monthly mortgage payment, not leaving enough to cover plaintiffs’ monthly mortgage payment, throwing plaintiffs into default. Once in default, Bank of America, as the loan servicer, was able to charge additional fees and penalties. Bank of America also falsely reported to credit agencies that plaintiffs were in default on their mortgage.”
The Dolfos say Bank of America had no authority to set up an impound account because they were already paying their insurance and taxes.
“Plaintiffs were not notified that Bank of America intended to create an impound account or that it created one. Plaintiffs never agreed to it. Bank of America had no authority, contractual or otherwise, to open or fund the impound account. There also was no need for an impound account as plaintiffs were already paying their insurance and taxes.
“Prior to filing this suit, plaintiffs spent months trying to work with Bank of America to solve the problems created by Bank of America: to close the impound account, stop the double payment of homeowner’s insurance and property taxes, stop the improper deduction from the monthly mortgage payments, reverse the improper default and have Bank of America correct the improper credit reporting. But, just like millions of other Americans who have tried to work with Bank of America, plaintiffs made no progress, and were constantly put off by Bank of America, mislead and ignored,” the complaint states.
The Dolfos say Bank of America also hurt their credit rating by false reports. They claim BofA has done this to other customers, and topped it off by “improper commencement of nonjudicial foreclosure on these properties secured by Bank of America loans.”
BAC Home Loans Servicing is also named as a defendant.
The Dolfos seek class damages and punitive damages for breach of contract, unfair competition, violation of the Rosenthal Fair Debt Collection Practices Act, violation of the Consumer Credit Reporting Agencies Act and conversion.
Their lead counsel is Timothy Blood with Blood Hurst & O’Reardon.
Full complaint below…
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4closureFraud.org
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This case was filed in 2011 – what has been the history and/or outcome of it as of today, July 27, 2016?
Our law firm represents the Dolfos in the class action lawsuit against Bank of America. If you have experienced similar problems with Bank of America or other mortgage lenders we’d like to learn more about your experiences. Feel free to contact us through our website, http://www.bholaw.com, or at info@bholaw.com.
This is the exact reason we are in foreclosure. Our servicer did this to us before the 1st payment was due. I thought we had it corrected only to find out that the servicer (EMC) continued to bill us for the insurance. A few weeks after making a payment, I was met in our driveway by a process server. I was, needless to say, surprised.
However, I did get permission from the EMC representative to tape the conversation with him. I tried for more than 2 years to get this rectified. EMC couldn’t seem to figure out what happened (go figure). The rep figured it out in less than 10 minutes……….AFTER we were served.
He stated that he had NO idea why EMC made that payment at the beginning of the loan since they had all documentation on file prior to closing and immediately following closing.
BTW – in case anyone is questioning my comment…….EMC actually faxed me what they had in our file FROM PRIOR TO OUR LOAN. Complete with fax/date stamps and what department the documents were faxed to at EMC. Nice of them to share this bit of information with me.
unbelievable that lenders would stoop to these levels to make a buck.Hope these people hold them to the line.and give them no quarter.
Finally, everyone is starting to catch on to the evil middle man in all of this. Once your file is outsourced – which is usually 90 days late – it’s tunnel vision to foreclosure. Too bad no one bothered to tell all of us fools out here who believed our President when he announced HAMP and believed our lenders when they said we were in final review for a modification. What we have come to learn is our lender is not our lender and that our servicer outsourced us to the monster. Not only were most of us intentionally forced into foreclosure but we have been forced into poverty. Well done, LPS, Fidelity Network, Corelogic or whatever other name you are currently scamming under.
This is not rare I seen these kind of practice from B o A too many times, this is massive fraud
I have the same thing happening. I have been asking here if anyone knows if the banks benefit financially from reporting to the IRS that the taxes are paid but the way it is done it appears from the form they send to the IRS and a copy to the homeowner that the bank is paying this when it is the homeowner that is paying all this. Please let me know how they benefit from this action?
Rotten to the CORE. Wonder who came up with the LOGIC that this practice is acceptable?
If I didn’t know better I’d say there’s some phantom company, like LPS but less well-known, at least so far.
If such a company did exist I’ll bet it was spun-off from a title insurance company, just like LPS.
But rather than a primary focus on foreclosure fraud they’d — ya’ know, if they existed — focus on playing around insurance, taxes, and other items larded onto mortgages, both those current and in default.