Hagens Berman: New Lawsuit Filed for Bank of America Homeowners Seeking Modifications
Hagens Berman Sobol Shapiro LLP, a national consumer-protection law
firm, has filed a class action lawsuit alleging that Bank of America
(NYSE:BAC) created and headed an illegal enterprise designed to defraud
homeowners seeking loan modifications as part of the government’s Home
Affordable Modification Program, or “HAMP.”
The complaint, filed in U.S. District Court in Colorado on July 10,
alleges that Bank of America masterminded a scheme which allowed it to
deny help it had promised to give thousands of its customers in exchange
for $45 billion it took in bailout funds.
“We believe that Bank of America gamed the system, perpetrating a fraud
on both its customers and American taxpayers,” said Steve Berman,
managing partner of Hagens Berman and one of the attorneys who filed the
lawsuit. “BofA promised that it would work with homeowners to modify
their mortgages under the HAMP program. Instead it took $45 billion in
taxpayer money and fought as hard as it could to avoid granting
modifications, squeezing every last dollar from its customers and
wrongfully foreclosing thousands of people’s homes in the process.”
For the past three years, Hagens Berman has been pursuing claims on
behalf of homeowners who were not given loan modifications that the firm
believes Bank of America contractually promised them. As the firm
litigated these issues, it uncovered evidence resulting in yesterday’s
new lawsuit. According to the complaint, Bank of America’s failure to
grant loan modifications was not merely the result of honest mistakes or
even widespread incompetence, but a deliberate and coordinated plan
orchestrated by the bank.
The lawsuit alleges that Bank of America employed contractors, including
co-defendant Urban Lending Solutions (“Urban”), who repeatedly lied to
Bank of America’s customers. For instance, the suit claims that Urban
employees answered the phone, “Bank of America – Office of the
President,” when they did not work directly for Bank of America.
Former employees, according to the complaint, have confirmed that Bank
of America instructed its employees to delay modifications, claim that
it had not received paperwork and payments when it had received them,
and declined modifications en masse in periods known internally as
“blitzes.”
The complaint also alleges that Bank of America went to great lengths to
keep its employees silent about these issues. According to the suit,
employees who questioned the ethics of declining modifications for
fraudulent reasons, or of lying to customers, were subject to discipline
including termination.
“BofA’s efforts to keep its employees from exposing the scheme were
successful for far too long,” said Berman. “Now – some very courageous
former employees have come forward and shed light on this massive
injustice that has impacted hundreds of thousands of people across the
United States.”
The lawsuit claims that Bank of America is guilty of violating the
Racketeering Influenced Corrupt Organizations Act, or RICO. It asks for
damages to be awarded to a proposed class defined as:
“All individuals whose home mortgage loans have been serviced by BOA and
who, since April 13, 2009, (1) applied to BOA for a HAMP loan
modification, (2) fulfilled an FHA Trial Period Plan Agreement or any
other trial-payment agreement that was not issued pursuant to SD-09
(form 3156), (3) sent documents to, or received documents or other
communications from, Urban employees in connection with their attempts
to modify their home mortgage, and (4) did not receive, within 30 days
after making all required trial payments, a permanent loan modification
that complied with HAMP rules.”
Additional information about this case is available at http://www.hbsslaw.com/cases-and-investigations/cases/BankofAmericaHAMP.
About
Hagens Berman
Seattle-based Hagens Berman Sobol Shapiro LLP represents consumers,
whistleblowers, investors, workers and others in complex and
class-action litigation. The firm has offices in ten cities and has been
named to the National Law Journal’s Plaintiffs’ Hot List five times.
Founded in 1993, HBSS continues to successfully fight for consumer
rights in large, complex litigation against large corporations. More
about the law firm and its successes can be found at www.hbsslaw.com.
Visit the firm’s class-action law blog at www.classactionlawtoday.com.
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