Hagens Berman has filed suit against Bank of America claiming the lending giant is intentionally withholding government funds intended to save homeowners from foreclosure. The case, filed in U.S. District Court, claims that Bank of America systematically slows or thwarts Washington homeowners' access to Troubled Asset Relief Program (TARP) funds by ignoring homeowners' requests to make reasonable mortgage adjustments or other alternative solutions that would prevent homes from being foreclosed.
Bank of America accepted more than $25 billion in government bailout money financed by taxpayer dollars earmarked to help struggling homeowners avoid foreclosure.
Bank of America, like other TARP-funded financial institutions, is obligated to offer alternatives to foreclosure and permanently reduce mortgage payments for eligible borrowers struck by financial hardship but, according to the lawsuit, hasn't lived up to its obligation.
According to the TARP regulations, banks must gather information from the homeowner, and offer a revised three-month payment plan for the borrower. If the homeowner makes all three payments under the trial plan, and provides the necessary documentation, the lender must offer a permanent modification.
Bank of America continues to ignore TARP regulations and instead creates more financial pressure on homeowners, the court filing states.
The lawsuit charges that Bank of America intentionally postpones homeowners' requests to modify mortgages, depriving borrowers of federal bailout funds that could save them from foreclosure. The bank ends up reaping the financial benefits provided by taxpayer dollars financing TARP-funds and also collects higher fees and interest rates associated with stressed home loans.
If you received an inadequate response from Bank of America for a home loan modification request after April 13, 2009, you are encouraged to submit information regarding the suit.
Aug. 26, 2013 - Hagens Berman has filed an amended complaint in the case.
June 18, 2013 – Newly filed declarations in the case from several former Bank of America employees spell out in detail how Bank of America intentionally delayed granting modifications. Specifically, employees claim the bank instructed its personnel to lie about documents or payments it had received and intentionally hold documents for more than 30 days to force homeowners to re-apply for a modification.
They also claim the company would hold a “blitz” twice a month in which any file with documents older than 60 days was denied and offered performance bonuses to employees who exceeded a quota of total accounts put into foreclosure.
Steve Berman, Hagens Berman managing partner and an attorney working on the lawsuit filed against Bank of America, noted, “We have heard from hundreds of homeowners who have experienced these delaying tactics firsthand. These documents show that our worst fears were true; Bank of America took more than $25 billion from taxpayers and rather than helping homeowners, exploited their hopes.”
August 8, 2011 - Hagens Berman filed a consolidated complaint in the United States District Court for the District of Massachusetts. The complaint consolidates more than 25 different actions.
July 6, 2011 - A federal judge has partially rejected Bank of America's motion to dismiss the case.
April 6, 2010 - Hagens Berman filed a similar complaint against Bank of America on behalf of all residents in California. Californa residents who believe they were wrongfully declined of a HAMP loan are encouraged to share information regarding the suit.
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