Arthur Delaney, Huffinghton Post
A federal judicial panel recently consolidated class-action lawsuits from across the country alleging that Bank of America treated homeowners with bad faith when they applied for mortgage modifications under the Obama administration’s Home Affordable Modification Program.
“What this demonstrates is that homeowners across this country have grown frustrated with Bank of America’s inability to comply with regulations put out by HAMP,” Ira Rheingold, director of the National Association of Consumer Advocates, told HuffPost.
Under HAMP, the Treasury Department gives mortgage servicers $1,000 incentive payments to reduce borrowers’ monthly payments, mostly by cutting interest rates. If an eligible borrower makes his or her reduced payments for three or four months during a trial period, the modification is supposed to become permanent. Often, trials drag on for much longer.
“Rather than allocating adequate resources and working diligently to reduce the number of loans in danger of default by establishing permanent modifications, Bank of America has serially strung out, delayed and otherwise hindered the modification processes that it contractually undertook to facilitate when it accepted billions of dollars from the United States,” says the complaint seeking class action filed in July by Teresa Follmer of Mesa, Ariz.
Follmer’s suit is one of eight putative class actions that will be consolidated as one case in federal court in Massachusetts. Bank of America supports the consolidation, according to ProPublica, which first reported the consolidation.
Read more here: http://www.huffingtonpost.com/2010/10/19/lawsuits-reflect-widespre_n_768368.html
