The states of Arizona and Nevada has sued Bank of America for alleged foreclosure fraud. The lawsuits are very similar in scope, and basically allege that Bank of America engaged in deceptive practices specifically with regard to mortgage servicing, loan modification, and foreclosure.
Arizona Attorney General Terry Goddard said in a press release:
“Bank of America has been the slowest of all the servicers to ramp up loss mitigation efforts in response to the housing crisis. It has shown callous disregard for the devastating effects its servicing practices have had on individual borrowers and on the economy as a whole”.
The Arizona complaint alleges that Bank of America committed fraud in Arizona, and mislead borrowers about foreclosure and loan modification programs in the following ways (quoted from the press release):
• Whether homeowners must be delinquent on their mortgage payments to be considered for a loan modification.
• How much time it would take to receive a decision from Bank of America on a modification request or a short sale request.
• Whether foreclosure would proceed while a modification or short sale request was pending, or while a homeowner was making trial payments.
• Whether the homeowner had been approved for a loan modification.
• Failure to provide valid reasons why the homeowner was declined for a modification.
• Whether the homeowner would be approved for a permanent modification if the consumer successfully made all trial modification payments.
The Nevada lawsuit has essentially similar allegations. Nevada Attorney General Catherine Masto said in a press release:
“We are holding Bank of America accountable for misleading and deceiving consumers. Nevadans who were trying desperately to save their homes were unable to get truthful information in order to make critical life decisions”.
