Monday, May 21, 2012

Suit: BofA Charges Homeowner In Foreclosure For Court Costs, Then Fails To Give Refunds Despite Subsequent Receipt Of Reimbursement For Unused Amount

In Hamilton County, Ohio, the Cincinnati Enquirer reports:

  • A Madisonville woman sued Bank of America [...] for pocketing court fees from foreclosure cases that she says belong to homeowners. Kathleen Collins accused the bank of fraud, breach of contract, unjust enrichment and other violations in a class-action lawsuit filed in Hamilton County Common Pleas Court.

  • Collins’ attorney, Robert Newman, said the bank’s practice of keeping the fees could impact thousands of homeowners who should have been reimbursed money when their cases were resolved.
  • The lawsuit’s accusations revolve around court fees, typically about $550, which the bank is required to pay when filing a foreclosure action. Depending on the length and outcome of the litigation, a portion of those fees often is reimbursed to the bank when the case is over. The suit says that’s what happened in Collins’ case when the bank was repaid $29 of its original court costs.

  • The problem, according to the lawsuit, is that the bank added all of the original court costs into Collins’ new loan, so she would pay the costs instead of the bank. And when the court reimbursed the $29 in Collins’ case, the bank collected it and left the full original costs in Collins’ loan.

  • Newman said the bank essentially is double-dipping: Collecting the full amount of the court costs from homeowners and then keeping the reimbursement of unused court costs for itself.

  • The refund goes to the bank and the bank doesn’t fork it over,” Newman said. “There is a substantial amount of money owing to the class.” He said it’s impossible to know how much money is involved at this time, since individual reimbursements are relatively small, usually no more than a few hundred dollars.

  • The lawsuit asks the court to bar Bank of America from such practices and to repay any reimbursed court costs to Collins and, potentially, to thousands of other borrowers. The suit also seeks unspecified damages.

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