Class action lawsuit charges Bank Of America broke the law by denying loan modifications under federal HAMP program.
NEW YORK, N.Y., NOVEMBER 19, 2010—A class action lawsuit filed today charges that Bank of America broke the law by failing to carry through on contractual promises to permanently modify mortgage payments for New York homeowners who successfully completed the trial modification period under the federal government’s Make Home Affordable Modification Program (HAMP).
The suit, filed on behalf of Marie Freeman, a Staten Island homeowner, and others by MFY Legal Services, Inc. and Abbey Spanier Rodd & Abrams LLP, alleges that Bank of America routinely enticed homeowners into making trial payments then aggressively pursued foreclosure lawsuits in violation of HAMP rules, which require that permanent modifications be made once homeowners fulfill their obligations under trial period plans.
“Bank of America is making a mockery of the federal HAMP program, which was designed to help homeowners keep their homes,” said Adam Cohen, an attorney with MFY Legal Services, a non-profit organization. “The banks collect hefty payments from homeowners, then turn around and initiate foreclosure proceedings. Homeowners lose, investors lose, and taxpayers who own many of the mortgage-backed securities lose, but the banks make money.”
Stephen Rodd, a private attorney providing pro bono services, said, “Our client did everything by the book only to have her modification improperly denied after her file was transferred from one Bank of America servicing subsidiary to another. We believe she may be one of thousands of homeowners across the United States who have fallen victim to Bank of America’s deceptive practices.”
At least 12 class action cases have been filed against Bank of America across the country alleging similar claims. The suit seeks to force Bank of America loan servicing subsidiaries to play by the government mandated rules.
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