Mortgage Servicer Threatens Foreclosure, Initiates Debt Collection Proceedings Despite Valid Loan Mod Being In Effect, Says Ohio Homeowner In Lawsuit

In Hamilton County, Ohio, The Cincinnati Enquirer reports:

• Carolyn S. Cable thought she had worked out a deal with her mortgage company to save her home from foreclosure after she had multiple brain surgeries and suffered a stroke that made her unable to work. But in a lawsuit filed in Hamilton County Common Pleas Court Friday, the Colerain Township woman alleges that Bank of America reneged on the deal and threatened foreclosure - even sending debt collectors after her. [...] In [her] case, she said a Bank of America representative told her that her loan modification was lost in the computer system.

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• When she fell behind on her payments in 2008, Countrywide Home Loans - under pressure from the Ohio Attorney General to offer loan modifications - lowered her interest rate and extended the loan term. Her payment went from $524 a month to $401 a month - which Cable said she paid. But then Countrywide went out of business, and Bank of America bought its mortgages. Cable's lawsuit says Bank of America told her the loan modification agreement was still in effect, but then initiated debt collection proceedings against her anyway.

• Cable is represented by the Legal Aid Society of Southwest Ohio. Lawyer Noel M. Morgan also represents a Clinton County couple in an almost identical situation, and said Bank of America's actions have become part of a growing practice by the bank to breach its agreements.

For the story, see Lawsuits: Bank reneged on loan deals.