BofA Sued for Alleged Contract Breach in Loan Modification
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- By Stacey Bumpus
- July 5, 2011
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.