Mortgage modification lawsuits filed by state attorney generals against Bank of America

Mortgage modification lawsuits filed against Bank of America

The state attorney generals of Nevada and Arizona have filed lawsuits against Bank of America regarding mortgage modification practices. The suits allege that Bank of America went ahead with foreclosures despite the fact that homeowners' requests for mortgage modifications were still pending. Arizona attorney general Terry Goddard said in a statement that what Bank of America did violates a 2009 deal with the state to help homeowners with looming foreclosures. An investigation on whether lenders prepared dubious foreclosure filings to kick people out of their homes was started on October 13 by all 50 states. At that time, Bank of America suspended foreclosure filings. JPMorgan Chase & Co. and GMAC mortgage unit owned by Ally Financial Inc. stopped foreclosures in 23 states.

The Arizona lawsuit alleges that Bank of America misled clients regarding the requirements for the mortgage modification program, including the duration of a resolution for requests. The state attorney generals state that the bank used deceptive basis for denying requests. The Arizona suit seeks to get $25,000 for each instance of a breach of the deal with Bank of America. Another $10,000 should also be paid for violating Arizona's consumer fraud law, the suit said. In an e-mail to Bloomberg, Bank of America spokesman Dan Frahm said that the filing of the suit was ill-timed. "We are disappointed that the suit was filed at this time. We and other major servicers are currently engaged in multistate discussions led by Attorney General Miller in Iowa to try to address foreclosure related issues more comprehensively." The mortgage modification program lawsuit filed by Nevada seeks an undetermined amount of civic penalties.

Posted by James Fried on Sunday December 19 2010, 12:51 AM EST. Ref: Bloomberg. All trademarks acknowledged. Filed under Featured News, Finance. Comments and Trackbacks closed. Follow responses: RSS 2.0