Tuesday, September 26, 2023
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Bailed-Out BofA Keeps Foreclosing, Class Says

SAN FRANCISCO (CN) - Bank of America took $25 billion in bailouts, but refuses to follow federal rules and help homeowners having difficulty paying their mortgages, a class action claims in Federal Court. Though the bank gets $1,000 for each mortgage it modifies under the Home Affordable Modification Program, BofA often decides it is "more profitable for a mortgage servicer such as Bank of America to avoid modification and to continue to keep a mortgage in a state of default or distress and to push loans toward foreclosure," the complaint states.

As a recipient of Troubled Asset Relief Program money, Bank of America was required to enroll in the government's Home Affordable Modification Program, to provide homeowners with affordable mortgage payments.

Under HAMP, loan servicers must respond to homeowners' requests for loan modifications and are not allowed to foreclose on homes while their loans are being evaluated. But the class claims Bank of America has ducked its HAMP obligations, and has "regularly and repeatedly violated several of its prohibitions."

"Because Bank of America is not meeting its contractual obligations, at least hundreds of California homeowners are wrongfully being deprived of an opportunity to cure their delinquencies, pay their mortgage loans and save their homes," the complaint states.

Lead plaintiffs Suzanne and Greg Bayramian say they are forced to live in an apartment while their home sits vacant, unsure if it will be foreclosed on or if they will ever be accepted into the HAMP program.

Though Bank of America agreed to implement HAMP in April 2009, the Bayramians say they found out in September 2009 that the bank still did not have the HAMP program fully implemented. An employee "had no idea when the HAMP program would be available if at all for the Bayramians," the couple says.

The class wants Bank of America ordered to honor its contract with the government, and enjoined from continuing its policy of foreclosing on borrowers' homes and deliberately delaying the loan modification process.

It also seeks restitution and damages for breach of contract and violation of the business and professions code.

The class is represented by Jeff Friedman with Hagens Berman of Berkeley.

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