States accuse Bank of America of ‘widespread fraud’ on homeowners

[Elmore Furth]

Source: NY Times

That's the Boschian hell that one family in Chino Valley, Ariz., was put through by Bank of America, according to a lawsuit (PDF) filed last week against the firm by the state's attorney general, Terry Goddard. It's just one of numerous equally nightmarish tales detailed in the complaint, and in a similar one filed by Goddard's Nevada counterpart, Catherine Cortez Masto.

The twin lawsuits, from two of the states hardest hit by the bursting of the housing bubble, accuse Bank of America of "widespread fraud" and outright deception in dealing with loan modification applications -- the procedure that is supposed to enable struggling borrowers to request a change in the terms of their loan. The allegations indicate that the extent of the foreclosure mess that's been making headlines since this fall goes far beyond banks cutting corners on paperwork, as it has sometimes been portrayed. Rather, the abuses also appear to involve banks routinely misleading borrowers about the modification process, and making that process as time-consuming and confusing as possible. And the lawsuits offer evidence suggesting that of all the bad actors in the mortgage market, BofA may have been the worst.

The AGs charge that, among other deceptions, Bank of America falsely told borrowers that:

They had to be delinquent on their mortgage payments to be considered for a loan modification.

• A foreclosure wouldn't proceed while a modification request was pending, or while payments were being made.



Read more: http://www.nytimes.com/2010/12/18/business/18mortgage.html?_r=2&nl=todaysheadlines&emc=a25

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Simon Legree, you bad man!

[redirish28]

1. These banks need to be taken out to the Shed and taught a lesson.

I hope a state brings a case and convicts BofA

[fascisthunter]

2. Damn right they Defrauded this Country

can't earn their money the honest way, so they use fraud instead... more sociopaths with no merit.

[Cleita]

3. These banks should have been nationalized when

the problems first surfaced before our government threw a lot of money at them. Then they could have been cleaned up by federal regulators and sold back to the private sector once they were operational. Wasn't that what FDR did? Also, banks need to be chartered by one state and one state only, the one they operate in, like they used to be. It keeps them from getting to big to handle and engaging in corrupt practices because state regulators keep them honest.