Wells Fargo, BofA Stiffed Homeowners On Permanent Loan Modification Promises, Say Suits Seeking Class Action Status

In Boston, Massachusetts, The Boston Globe reports:

• Two lawsuits filed [] in US District Court in Boston claim Wells Fargo and Bank of America have not followed federal rules for mortgage loan modifications, leaving some homeowners stuck in foreclosure “limbo.’’

• According to one of the lawsuits, Wells Fargo Bank North America did not honor agreements with Wilfredo and Odalid Bosque of Leominster and Germano DePina of Roxbury that would have made their temporary loan modifications permanent through the US Treasury’s Home Affordable Modification Program. In a second suit, Patricia Johnson of Salem alleged Bank of America Corp. did not abide by a similar arrangement that was intended to reduce her mortgage payments.

• “When a large financial institution promises to modify an eligible loan to prevent foreclosure, homeowners who live up to their end of the bargain expect that promise to be kept,’’ lawyer Gary Klein wrote in the complaints.(1) [...] The suits said both banks received $1,000 for every successful loan modification through the federal program. According to the suits, if the homeowners made three successive payments under temporarily modified loan terms, it would trigger a second stage “in which the homeowner is offered a permanent modification.’’ [...] Klein said he would ask a judge to give the lawsuits class-action status.

For the story, see Banks violated mortgage rules, lawsuits allege (Plaintiffs say they’re stuck in loan-modification limbo).

In a related story, see ProPublica: Chase and Other Servicers Leave Many in Loan Mod Limbo; Treasury Threatens Penalties.

For the lawsuits, see:

• Bosque et al. v. Wells Fargo Bank, N.A.,
• Johnson v. BAC Home Loans Servicing, LP.

(1) Co-counsel in the Bosque case are: National Consumer Law Center, Boston, and Neighborhood Legal Services, Lawrence, MA.