Sunday, October 23, 2011

Suit: 'Successful' Loan Modifcations No Guarantee Against Subsequent Mortgage Servicer Abuse; Homeowners Target BofA In Action Seeking Class Status

The Boston Globe reports:

  • Property owners in Massachusetts and across the United States say they are being threatened with foreclosure and assessed unfair fees by lenders even after signing agreements with those companies to make lower mortgage payments and stay in their homes.

  • Eight Bank of America borrowers - including two from Massachusetts - have filed a lawsuit against the nation’s largest bank, alleging it violated loan modification contracts, wrongly attempted to collect money from them, damaged their credit, and initiated wrongful foreclosure actions. They expect others to join the suit and are seeking class-action status.


  • [K]athleen Day, spokeswoman for the nonprofit Center for Responsible Lending, based in North Carolina, said the problem is widespread. “It is all too common for banks to enter a loan mod and then try to foreclose on people and try to harangue them for money,’’ Day said. “All the evidence shows that servicing procedures and record keeping are just a mess. It ranges from disarray to out-and-out fraud.’’


  • Shennan Kavanagh, a lawyer with the Boston law firm Roddy Klein & Ryan - which filed the suit - said it is especially traumatic for homeowners who have gone through the stressful monthslong modification process to find they could still be at risk of losing their properties. “There is complete and utter chaos in the servicing industry,’’ Kavanagh said. “These are supposed to be the lucky folks.’’


  • Roddy Klein & Ryan filed its suit this spring in US District Court in California, the site of the offices of BAC Home Loans Servicing LP, a Bank of America Corp. subsidiary that once administered home mortgages for the company. Earlier this year, BAC Home Loans was consolidated with Bank of America.

For more, see Abuses alleged in retooled loans (Despite deals, threats of foreclosure reported).

No comments: