Posted on Monday, December 20, 2010
Arizona Attorney General Terry Goddard announced Friday that his office has filed a lawsuit against North Carolina-based Bank of America (BofA) and its affiliated companies for alleged fraudulent acts committed after a March 2009 lawsuit.
In March 2009, a judgment was entered into in order to resolve Goddard’s allegations that Countrywide, which Bank of America bought in 2008, had engaged in widespread consumer fraud in both originating and marketing mortgage loans. In the judgment, BofA agreed to develop and enforce a loan modification program for certain Arizona customers.
But according to Goddard, since the judgment was established, BofA has repeatedly violated the judgment’s provisions related to loan modifications, by failing to make timely decisions on modification requests and proceeding with foreclosures when modification requests were still pending.
Goddard also alleges that BofA has violated the Consumer Fraud Act by misleading Arizona consumers about its loss mitigation processes and programs.
“I am filing this lawsuit today because, after years of delay and broken promises, Arizonans should not have to wait any longer to seek redress,” Goddard said.
According to the complaint, BofA customers were misled on matters including:
• Whether homeowners must be delinquent on their mortgage payments to be considered for a loan modification.
• How much time it would take to receive a decision from Bank of America on a modification or short sale request.
• Whether foreclosure would proceed while a modification or short sale request was pending, or while a homeowner was making trial payments.
• Whether the homeowner had been approved for a loan modification, and failure to provide valid reasons why the homeowner was denied a modification.
• Whether the homeowner would be approved for a permanent modification if the consumer successfully made all trial modification payments.
Goddard said,“Our homeowners and communities need and deserve relief. Bank of America must be held accountable for its deceptive conduct and failed commitments.”
Dan Frahm, SVP at Bank of America Home Loans, issued the following statement regarding the Arizona lawsuit: “We are disappointed that the suit [was] filed at this time…because we and other major servicers are currently engaged in multi-state discussions led by Attorney General Miller in Iowa to try to address foreclosure related issues more comprehensively.”
Frahm continued, “Bank of America has been a cooperative partner with the attorneys general, and has worked with state leaders to evolve programs and resources to broaden assistance to distressed customers. We are already underway with further improvements to our processes and programs for Bank of America customers.”
DSnewsBy: Joy Leopold