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State of Arizona sues Bank of America

By
Real Estate Agent with Tierra Antigua

 

State of Arizona sues Bank of America

Arizona's Attorney General, Terry Goddard, challenged Bank of America with a lawsuit about mortgage fraud on Friday, December 17, 2010. He alleged the bank had mistreated customers in their loan modification program. Charges were filed in Maricopa County Superior Court.

Terry Goddard stated, "The evidence we have amassed in a year-long investigation shows a systematic disregard for their borrowers." Bank of America is accused of fraud in its business practices with consumers who were formerly with Countrywide. BOA is the largest home loan provider in the state of Arizona and acquired Countrywide as a subsidiary.

BOA is also being viewed by a national committee because of its mortgage practices. Terry Goddard is a part of that committee.

Many customers in the mortgage modification process were led to believe their request was being processed. Instead BOA had started foreclosure proceedings or did not respond. Due to this many customers lost their homes.

In 2009, BOA promised to treat former customers of Countrywide Financial Corporation fairly. Terry Goddard states, "What they have done in these cases is not done what they said they would do."

The lawsuit charges state that BOA was guilty of the following:

Rejected loan modification requests without reason.

Gave conflicting information to consumers about their loans.

Scrambled customer service from one department to another instead of one source.

 

Goddard says "Deceptively, Bank of America, on many, many occasions, continued to accept mortgage payments while they continued to process individuals for foreclosure and, in fact, were ready to sell the house."

BOA's own website boasts a 90 day mortgage modification response. "We've had people in the process for over a year" states Goddard.

Arizona's Consumer Fraud Act has been violated by Bank of America according to the lawsuit. Requested is $10,000 per violation of this act and $25,000 per victim. Hundreds of complaints have been filed.

Goddard's attitude towards BOA is stern. "It has shown callous disregard for the devastating effects its servicing practices have had on individual borrowers and on the economy as a whole."

BOA vice president, Dan Frahm, responded by email to the allegations. "We are disappointed that the suits were filed at this time, however, because we and other major servicers are currently engaged in multistate discussions led by Attorney General (Tom) Miller in Iowa to try to address foreclosure related issues more comprehensively. Bank of America has been a cooperative partner with the attorneys general, has worked with state leaders to evolve programs and resources to broaden assistance to distressed customers, and we are already underway with further improvements to our processes and programs for Bank of America customers."

Terry Goddard's call for accountability for Bank of America will continue until all settlements are complete.

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