BofA Sued for Alleged Contract Breach in Loan Modification

Bank of America NA and its subsidiary BAC Home Loans Servicing LP are being sued due to alleged breach of contract in mortgage loan modifications. Two borrowers involved in the loan modifications are being named as plaintiffs in the proposed class-action lawsuit, according to The Associated Press.

Loan Modifications Gone Wrong

Maria Campusano and another plaintiff are one of two so far who have come together to file a class-action lawsuit against Bank of America after having significant loan modification issues with the bank. Campusano told her story to The Associated Press, explaining that after having financial problems and falling behind on her mortgage, she was able to modify her loan with BofA.

She said initially, the bank cut her monthly payments by hundreds of dollars, but after just a few weeks under her new loan, she started receiving past-due notices, documents showing inaccurate loan balances and letters that threatened foreclosure.

Fearing the loss of her home, she filed a lawsuit in Los Angeles federal court (because BAC is located near Calabasas) along with another unnamed plaintiff who also alleges that the bank is disregarding agreements to reduce the monthly mortgage payments of troubled borrowers through the Home Affordable Modification Program (HAMP).

This is not the first lawsuit a bank has faced that alleged it did not honor loan modification agreements, which is why the government has stepped in to enforce better modification practices. This is also not the first issue a borrower has had with Bank of America and improper foreclosures.

Bank of America Almost Foreclosed by Florida Couple

In June, a Florida couple made news when it threatened to foreclose on a local Bank of America office because that location tried to foreclose on a home that had been paid for in cash. The bank was convinced that the couple had taken out a mortgage loan and had not made payments.

The couple was forced to fight the allegations in court. Ultimately, the couple won the fight and BofA was ordered to pay over $2,500 in attorney’s fees, which it did not willingly do. It was at this point that the couple, accompanied by a sheriff, decided to pay the office a visit, threatening to take its furniture for auction to repay its debt.

The bank quickly decided to cut the couple a check for $5,772.88 to settle the debt.

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  • dennis mason

    freddy mac bought my house from bofa while in modification.i learned this from a realtor who came by to tell me to move out.freddy is suppose to be on our side.i would like to join or start action against bofa.we need to stop them.please call 707 768 1729 dennis.dennismason38@yahoo.com

  • Jose De Santiago


    First, let me start by saying thank you for taking the time to read my story.  I will try and keep it short.  My name is Jose De Santiago and I had a home at 23292 La Mar # C, Mission Viejo, Ca.  92691.  All supporting documentation will be attached bellow. 

    For approximately a year and a half I have been applying to try and get a loan modification with Bank of America. The process was really tough because in the beginning you didn’t have an assigned case manager so it was tough to get any updates from them.   I recall that I had to resubmit paperwork several times  because I was told that after 30 days the paperwork got old.  

    After several phone calls and pleading with Bank of of America, I received a personal case manager, Angela Davis.  She told me that Bank of America changed the way they do business and that now I will have her as a contact person to get me through the process. 

    Everything appeared to be going well. She told me that as long I was in the process that my home would not get sold.  Per her request, I faxed over the last of the documents that she wanted on October 24, 2011.  

    Angela Davis told me that all my documents were in on time and that they were being sent to the underwriter.

    On the same day, October 24th, I was notified that my house apparently had been sold at an auction.  I quickly notified Angela Davis at Bank of America and when she did respond, she told me to disregard the notices because my paperwork was in on time.

    Angela Davis wrote :  

    ” I was trying to get you an answer on the notice you received. I showed it to my manager and she said disregard the notice because you got all of your documents in on time. Sorry for the delay. ”

    During this process, I kept getting phone calls and notices from an REO Broker, MICHELLE MAHZARI who is the representative of Alton Holdings Inc., the company who apprantly purchased my house.   

    Because I did not want to lose my house, I filed a complaint with the OCC-Treasury Division of the Federal Government requesting that they look into my case because I didn’t think Bank of America was handling my situation properly. 

    Shortly after filing my complaint with the OCC-Treasury Division of the federal government, I received a call from Tammy Yancey who told me that she will be my new Case Manager and she worked out of the Office of the President of Bank of America.  

    Tammy Yancey and I had several telephone conversations where I was assured that the sale of my property was a mistake and that Bank of America Rescinded/cancelled the sale.  Tammy even gave me the number to the Recon Trust Company who apparently were instrumental in the sale of my property and the information I received from them through a recording was the same information that Tammy Yancey received; the sale of my house was rescinded/ cancelled. 

    Tammy Yancey wrote :

    ” To: Rensing, Joy A

    LOAN 155108462
    Can you please provide me an update on Jose De Santiago, recession appeared to be approved, I was proceeding with the modification. He received an email from Michelle Mahzari  714.832-8989 saying that it was rejected. I’d appreciate any updates you may have. Mr. De Santiago is extremely upset. Recon is saying the sale was cancelled. ”

    Tammy Yancey reassured me that everything was fine and that she was proceeding with my loan modification.  She told me that I should be receive my loan documents soon. She went on to tell me how the loan modification program was going to work for me. She said I would have a 3 month trial period to make sure I could make my payments and then the loan would be permanent.  I was really looking forward to getting the help I needed. 

    Shortly there after, my communication with Tammy Yancey stopped. As you will read in my supporting documentation below, I have been trying vigorously to make contact with Tammy Yancey and her co-workers to try and get answers only to have my request be ignored. 

    On December 22, 2011,  I found a notice on my door telling that I need to be out of my house by Wednesday, December 28th by 6am or I will be forced out by the Sheriff’s Department.  The plaintiff on the notice is Alton Holdings, inc and I, Jose De Santiago was named the defendant. 

    As you might imagine, this was very upsetting to me. On December 27, 2011, I sent everyone involved with my case the following email that really sums up my whole situation to this point. 

    It’s December 27, 2011 and just a few hours ago, I was paid a visit by the Orange County Sheriff’s Department reminding me that I needed to be out of my house by 6am, tomorrow. 

    I told the officer that I would be out and that I was trying to clean as much as possible. 

    As you probably know, I am as disappointed in the whole process as one could be.  I was lied to, mislead and all by the same people who were entrusted to help me.  To all the employees at Bank of America, the system has apparently failed yet another United States Citizen, me Jose De Santiago.  I did everything that was asked of me in the time that was allotted and I still apparently lost my home.  As far as I know, I am still in the Loan Modification Process and there is no valid reason for me to get denied because before this hardship my credit was impeccable. 

    Tammy Yancey, you promised to communicate with me on a daily basis and you as you can see you failed to keep your promise.  Why you would lie to me is unknown at this time.

    I have requested help from the Federal Government, The Office of Congresswoman Loretta Sanchez and tomorrow I will be contacting Senator Lou Correa.  I will also be meeting with my Attorneys to discuss how to proceed.  

    Michelle, I will be leaving the key under the doormat unless you would like to pick it up.  For unknown reasons, Bank of America Reps told me that you were lying to me and just were out to make a profit. As you know they assured me that the sale of my home was Rescinded, apparently not. 

    Everyone at Bank of America has apparently abandoned me and they won’t even return my emails or calls.

    As a Citizen of this great Nation one that I support and fought so hard for, keeping the peace and enforcing it’s laws, I am saddened that I was treated this way.  

    I hope at the very least all of you enjoyed your Christmas with your families.  Hopefully next year I will be able to enjoy mine.  I am saddened that I had to spend mine cleaning out my home.

    Respectfully Submitted,

    Jose De Santiago

    In closing, I did everything that was asked of me in order for me to save my home.  There were many options on the table for me, but I didn’t get a chance to exercise those options because Bank of America assured me that my loan modification was accepted, I was with the underwriters and I would be getting my new loan soon.  I was also assured that the mistake made when Bank of America sold my home was corrected.

    I am going on my 4th day that my 13 year old son and I were forced to leave our home and we are struggling greatly.  Bank of America continues to ignore my request for dialogue. 

    I respectfully ask for your assistance in this matter and I hope to hear from you soon.

    Respectfully Submitted,

    Jose De Santiago



  • Shanna neal

    I went through the loan mod with Back for 8 months. I had a lot of issues with it I had to contact attorney general, dealt with Back Co’s office. They lied several times. The Representative that I dealt with was written up removed from my case. The president of bac had to send a massive email about the documents that they must except. By the end of the loan mod they sent me a card apologizing to me for all the mistakes made. Collete from the ceos office told me that they were in the wrong. I had to send documents in seveiral times. I had to have an attorney notarize documents in the end. They told me that was not acceptable. That’s when the guy was written up and removed from case for fraudulent acts. I know what I went through. I hope you can win this case for the people that needs your help.

    • Tim

      Would you mind contacting me regarding this? I am currently dealing with BofA and they have gone off communication, I have even persued the help fo HUD and now at a dead end with them all claiming their agents lied and I’m without help. I need assistance ASAP

  • George

    Bank of America agreed on modification with me. Paper work was signed and delivered to B/A. We made 2 of the payments earlier to be on time and called in to make last payment and talk to CSR to see what modification payment would be. At that time we were told no modification would not be made unless all past due payments were brought current. I told her ‘have a nice day”. This is a ploy of B/A to see how much asset you have available in your savings and 401k more than helping homeowners. BIG QUESTION–why are banks taking homes that the default owner can pay 25-75K dollars more than what can be gotten from sale after foreclosure or short sale?