Bank Of America Loses Bid To Dimiss Mortgage Modification Lawsuit

NEW YORK (Jonathan Stempel) - Bank of America Corp lost its bid to dismiss a lawsuit accusing it of reneging on promises to help borrowers modify their mortgage loans under a much-criticized federal program.

The bank, however, claimed a partial victory, citing District Judge Rya Zobel's decision to dismiss claims by borrowers who sought to participate in the two-year-old Home Affordable Modification Program, or HAMP.

Zobel nonetheless ruled that homeowners who contend they did not get modifications for which they qualified under HAMP, to avoid foreclosures, could pursue claims against Bank of America.

The complaint "meticulously" detailed each of these plaintiffs' compliance with loan modification conditions, but said the bank "willfully failed" to modify the loans, either in bad faith or for its own economic benefit, Zobel wrote. Such allegations are "sufficient" to let the lawsuit go forward, she added.

Zobel rejected claims by borrowers who claimed they were "intended beneficiaries" of HAMP but never entered the program, saying they had no contractual right to relief.

She also rejected a request to block Bank of America while the lawsuit is pending from foreclosing on 37 borrowers said to be in "imminent danger" of losing their homes.

In a statement, Bank of America spokeswoman Shirley Norton said the company is pleased that four of the eight counts in the complaint were dismissed.

The lawsuit combines 26 cases that had been brought in 19 states, and sought class-action status for various plaintiffs.

"The Court's conclusions will likely help hundreds of thousands of families to convert temporary mortgage modification plans into permanently lower monthly payments. Tens of thousands of foreclosures are likely to be prevented," said Gary Klein, a lawyer for the plaintiffs, adding that he expects the case to get class certification quickly.

Last week, Bank of America said it would take $20 billion of charges for various mortgage matters, including over its 2008 purchase of Countrywide Financial Corp.

Like several rivals, the Charlotte, North Carolina-based bank has also been in talks with state and federal regulators to resolve claims over alleged foreclosure abuses.

HAMP was created in 2009 as a centerpiece of efforts by the Obama administration to boost the nation's housing sector.

While it provides incentives to loan servicers to encourage modifications, HAMP has been widely derided as ineffective.

Through May, 731,451 borrowers had received permanent loan modifications, far below the original goal of 3 million to 4 million.

The Republican-controlled House of Representatives voted in March to wind down the program, though the Democrat-controlled Senate is not expected to follow.

Bank of America, JPMorgan Chase and Wells Fargo & Co are the largest servicers participating in HAMP.

The case is In re: Bank of America Home Affordable Modification Program (HAMP) Contract Litigation, U.S. District Court, District of Massachusetts, No. 10-md-02193.

(Reporting by Jonathan Stempel; editing by Carol Bishopric)

Copyright 2011 Thomson Reuters. Click for Restrictions.

Comments

[wright4ulg]

04:28 PM on 07/22/2011

When I think of Brian Moynihan or Barabra Desoer, I think of the song by John Lennon called Piggies:.
So if it walks like a piggy, talks like a piggy, by golly it’s a PIGGY!.

WHERE IS MY LOAN MODIFICATION BANK OF DESTROYING AMERICA!.
http://www.youtube.com/watch?v=ovD9rTzs2q4&feature=player_embedded.
Please stand with me and Brookstone Law Firm, and send an email to Bank of Abusing America that states that we will no longer tolerate their potentially illegal, fraudulent, irregular and abusive business methods. .
So please send your email directly to Bank of America and include the following:.
1. Your name
2. Your complaint concerning your experience with Bank of America.
3. Please end your email “I support John Wright vs. BofA Lawsuit!”
4. Please send a copy of your email to [e-mail]
5. Please send your email to BofA CEO Brian Moynihan:
[e-mail].
I HAVE HAD ENOUGH AND I AM FIGHTING BACK! .
I have created piggybankblog.com for all of those who have been abused by Bank of Destroying Americas potentially irregular, fraudulent and simply abusive home loan modification process. .
Divided we might have fell America. UNITED WE MUST STAND!.
http://www.youtube.com/watch?v=PoOJMr7OJ0s.
My name is John Wright AND I AM FIGHTING BACK!.
John Wright
piggybankblog.com

[Gwendolyn Brown]

12:20 PM on 07/21/2011

I have been working w/BoA thru NACA for the past 2 years...Resubmitted the same info so many times, the last time 99 pages of info (proof). What more can they want??? I am really losing it...my mind & my house!!!

[james denton]

02:31 PM on 07/08/2011

"The Criminal Liability of Corporations statute, enacted in 1975, establishes that: 'Every corporation, whether foreign or domestic, which shall violate any provision of RCW 9A.28.040, shall forfeit every right and franchise to do business in this state. The attoney general shall begin and conduct all actions and proceeding necessary to enforce the provisions of this subsection.' (RCW 9A.08.030(5)). The referenced statute, 9A.28.040, prohibits agreement between two or more persons, including directors or officers of a corporation, 'with intent that conduct constituting a crime be performed.' Thus, if a corporation engages in a criminal conspiracy, the attorney general is required by law to seek dissolution of the corporation. Furthermore, it is no defense if the person(s) (including the corporation) '(a) has not been prosecuted or convicted; (b) has been convicted of a different offense; or (c) has been acquitted.'" (William Sherlock, Memorandum to Richard Grossman and Richard Gwynallen, Re: Oregon and Washington Corporate Charters, June 27, 1995).

[james denton]

02:23 PM on 07/08/2011

The States' should dissolve these corporations for their violations, dissolve one bank and watch all the others fall in line or arrest one bankster

[Jobu54]

10:49 PM on 07/07/2011

B of A will appeal and appeal until it reaches the Supreme Court where the Chief Enablers of the Wealthy will exonerate the bank of any wrong doing.

[JerseyExit4]

05:17 PM on 07/07/2011

I used to have a BOA account for years until i got FED UP with their customer services (a.k.a. NONE AT ALL!)

I've split up my money between a Credit Union and a local bank!

CRASH AND BURN BANK OF AMERICA!, CRASH AND BURN!!!

[rnl52]

08:12 PM on 07/07/2011

Agreed. BofA burned my Father on a business loan 39 long years ago and I have never forgot that. I talk smak about them whenever I have the chance. Credit unions period. Add my voice, crash and burn BofA.

[JerseyExit4]

05:13 PM on 07/07/2011

Take these BAZZDARDS down to the lint in their pockets!

[giwel7]

05:00 PM on 07/07/2011

somewhat off topic but ken lewis of bank of america was voted "banker of the year" for 2009 who was voted for 2010? what qualifications are looked for to recieve this coveted title?

[cats530]

05:13 PM on 07/07/2011

I don't know, but maybe some of the qualifications are: Who can lose the most money? Who is the most incompetent? Who is the biggest cr00k? Who can pay the regulators and CONgress the most money?

[giwel7]

05:48 PM on 07/07/2011

i think those do fit mr lewis.

[JustABriefThought]

04:46 PM on 07/07/2011

I used to have four accounts at Bank of America. I closed them all and moved my $$$ to a local bank. They really appreciate my business and treat me much better. If lots and lots of people supported LOCAL businesses and banks instead of huge international corporations and banks, then these mega-banks would not have the power to treat US citizens so poorly.

[cats530]

05:57 PM on 07/07/2011

Me too. I had Wells Fraudgo for 25 years, don't know why I didn't make the switch to the small bank MUCH sooner. I don't miss the nickel-and-diming, the high fees, the phoney-baloney account manipulations, the "floating" of my deposits and charges, sometimes for 5 days at a time (hoping to overdraw me if I don't watch my balance) and BEST OF ALL - I am no longer supporting a Too Big To Fail entity or one who played games with their borrowers so they could collect on the corporate welfare HAMP payment handouts, yet put their hapless borrowers into a dual-track foreclosure.

[joni brit]

04:12 PM on 07/10/2011

F&F per usual. perfectly put, and glad to see Wells Fargo is not seeking immunity under coattails of Warren Buffet. Very very serious business here. HAMP was never meant to help the most needy, who are still are paying the highest cost. Paying with our next generation, 14 million children plus, going to school hungry and homeless. We need jobs, not publicity for handouts that never happen. There are so many empty houses and so many washrroms in public malls being used for morning ritual of teeth brushing before heading off to a day of school with no breakfast, and the prospect of returning home, to the front seat of a car, to do your homework. Next time you drive by an empty house, where once a family dreamed of a future, think, at what price did the Bank fraudulently collect default insurance?

[cats530]

04:17 PM on 07/07/2011

"Now homeowners have a cause of action for damages and other relief for this predatory behavior. Like the JPM employee reported, the banks consider themselves in the foreclosure business not the modification business. Why? Because they want the house. If they had any money in the deal they would want the modification inasmuch as they could salvage more of the loan, and escape the necessity of maintenance, taxes and insurance. But they don’t have any money in the deal, and they never did. What they want is a free house, using trickery, fraud, forgery, fabrication of documents and outright lying to both the homeowners and the courts — and their lawyers know it. "

http://livinglies.wordpress.com/2011/07/07/finally-boa-faces-claims-for-bogus-modification-actions/

[Karma2U]

03:35 PM on 07/07/2011

"Oh what a tangled web we weave...."

[homeownersfightingback]

03:31 PM on 07/07/2011

We all know about the fraud here. We talk amongst ourselves and complain. What are YOU doing to share your knowledge? Start a protest at your County Registry of Deeds? Make t-shirts?
Call into your local stations and inform your neighbors what is happening?
Do you have bumper stickers that make a statement about the fraud?
We have power in numbers. GET THE WORD OUT

[cats530]

03:43 PM on 07/07/2011

How about suing? That's what I'm doing personally and I made sure my county registrar is already involved/on board in the MERS quai tam suit. I've made repeated complaints to the fed officials and local government. Our state AG is supposedly not going to accept the banksters low-ball AG settlement and for that I am glad.

[GetRealSoon]

12:54 PM on 07/07/2011

What modifications offered? Beginning of 2009, a two minute call to Hope for Homeowners, "Sorry, you don't qualify. You need to foreclose. I am a professional"

A two minute call to HUD, "Sorry you need to foreclose. I am a professional."

Yes, the lost paper work game and the added late fees after default, only to get the letter from the lender seven months latter after the 1st call trying to communicate stating, " No modification for you."

There can't be that many in the B of A's lawsuit.

[cats530]

01:45 PM on 07/07/2011

"Today, Bryan Moynihan is known for an uncanny ability to put a positive spin on any situation, which I find a lovely euphemism for saying he lies well, assuming such a thing is possible. He’s driving a financial institution that required TWO federal bailouts totaling $45 BILLION in cash, to say nothing of the federal guarantees, and is today being sued by so many consumers and investors that I can’t even keep up anymore."

http://mandelman.ml-implode.com/2011/04/bank-of-americas-tasmanian-devil-says-we-shouldnt-be-thinking-of-our-homes-as-assets/

[dkmkc2000]

08:16 PM on 08/09/2011

Yup been there.

[tempist771]

12:18 PM on 07/07/2011

It goes further than just not enrolling people

step 1 - homeowner calls the bank to talk about a loan modification. They have a phone interview with a representative who tells them that they are eligible

step 2 - the representative calculates the modified payment and tells the homeowner that they need to pay this during a "trial period" while all of the paperwork is processed.

step 3 - the homeowner is placated while the bank uses the foreclosure crisis as an excuse for the lack of paperwork

step 4 - the homeowner is contacted and informed that they were not eligible, and ordered to pay all of the back mortgage for the time that the loan was "modified" immediately to avoid foreclosure.

At best this was a tool for the banks to continue to collect some money from homeowners until it was convenient to foreclose. At worst it is predatory. A friend of mine was up to date on his mortgage,had equity, and a solid job (surgeon) and was was contacted by Chase. He was told that he was eligible for a modification. They offered him an $800/ month payment reduction which he accepted (who wouldn't) He contacted them several times about the lack of paperwork and was strung along. About a year after the modification they demanded about 10k to avoid immediate foreclosure proceedings. Luckily he had the means to pay it , but others in his position may not have been so lucky.

[cats530]

12:41 PM on 07/07/2011

Here's why:

http://mandelman.ml-implode.com/2010/09/inside-chase-and-the-perfect-foreclosure/

[tempist771]

01:09 PM on 07/07/2011

interesting

[Huff Fan 64]

02:12 PM on 07/07/2011

Yo hit the nail right on the head, this same thing happened to my now ex-brother in-law when my sister and him divorced. BofA told him he was eligible and to make the new payments, then 6 months later (opps) the paper work was missing and not filed and now you are not eligible and need to make up back payments.. That's when he told them to pick up the keys for the house, interesting that a week later BofA came back and said oh maybe we can get you into the program.. Luck???

[tempist771]

04:31 PM on 07/07/2011

They probably were not ready to foreclose -- it is beneficial to them to collect payments until they are ready to handle that case. Another seed for thought -- on a lot of the loans made right before the mortgage crisis the banks traded the loans, repackaged them etc. but did not keep up with the paper trail. This means that the banks do not have a legitimate legal claim on a lot of the mortgages. There are some cases that the judges have ruled in favor of the homeowner on these and the bank was no longer legally able to collect, foreclose etc on the homes. Bof A just made a record settlement to it's investors in part because they sold a product they did not own in the first place. Time for mortgage holders to stand up and hold them accountable.

[cats530]

11:52 AM on 07/07/2011

"...but said the bank "willfully failed" to modify the loans, either in bad faith or for its own economic benefit."

Oh, yes, that's EXACTLY what went down. Good for the judge. Scroo u BOA.