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BoA Faces Mod Lawsuits in Several States

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Mortgage Daily

                                                 March 30, 2010

Borrowers in California, Massachusetts Ohio and Washington have filed lawsuits against Bank of America Corp. because their loans haven’t been modified. One law firm that targets big lenders like BoA for litigation has already added 30 employees and is adding even more now.

A lawsuit announced on March 23 by Hagens Berman Sobol Shapiro accuses Bank of America of ignoring delinquent borrowers’ requests to “make reasonable mortgage adjustments.” The Charlotte, N.C.-based institution allegedly decided to slow the modification process because it was in its own best financial interests. The case was filed in U.S. District Court for the Western District of Washington.

A Seattle couple allegedly made a $1,400 up-front fee for BoA to modify their loan — a practice that is reportedly prohibited under the Home Assistance Modification Program, Hagens Berman said.

Ten Ohio borrowers sued Bank of America, N.A., and BAC Home Loans Servicing LP last month in U.S. District Court for the Southern District of Ohio, Western Division, according to case documents. At a borrower outreach event in Cincinnati sponsored by the U.S. Department of the Treasury in October 2009 and attended by multiple servicers, BoA allegedly offered the plaintiffs loan modifications and promised to follow-up with written modification documents within weeks — though the borrowers claim none were received.

Most of the associated loans were inherited with BoA’s acquisition of Countrywide Home Loans. The lawsuit described each of the borrower’s negative experience with the bank.

“Today, after months of agonizing worry and having experienced every manner of deception, confusion, avoidance, indifference and incompetence at the hands of BoA, plaintiffs are no closer to receiving the promised loan modifications,” the complaint says. “As a result, plaintiffs are living with the daily trauma of imminent foreclosure and loss of their homes, significant damaged credit and other serious and negative financial … consequences.”

In California, United Law Group announced that it filed a complaint on March 18 in the Superior Court of the State of California, County of Santa Clara, against BoA and Countrywide. The complaint alleges breaches of contractual obligations, violation of the Restatement (Second) of Contracts Section 205, emotional distress and violation of California Business and Professions Code Section 17200.

United Law — which itself is being sued by Ohio’s attorney general over its modification practices — cited one borrower who it claims has been trying to get a modification for 13 months.

Irvine, Calif.-based United Law claims it has been so successful filing class actions against big banks that it has had to boost its staff by 30 people during the past year and is in the process of increasing headcount by another 30 to 40 employees. Headcount currently stands at around 100.

BoA and Wells Fargo Bank, N.A., face Massachusetts lawsuits filed in U.S. District Court for the District of Massachusetts on Feb. 26, case documents indicate. The plaintiffs seek to stop an auction and obtain modifications from the two lenders.

The Charlotte Observer reported that two cases filed in Massachusetts against BoA and Wells seek class action status.

Ponder et al v. Bank of America, N.A. et al.

Case. No. 1:10-cv-00081-SJD, Feb. 10 (U.S. District Court for the Southern District of Ohio, Western Division).

In Re. Bank of America.

Case. No. 1-10-CV-166846, March 18, 2010 (Superior Court of the State of California).

Eveillard et al v. Wells Fargo, et al.

Case No. 1:10-cv-10351-RWZ, Feb. 26, 2010 (U.S. District Court for the District of Massachusetts).

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