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Friday, January 14, 2011

Why Bank Of America Fired Me



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Bank of America Sued by Arizona, Nevada Over Loan Modifications
December 18, 2010, 12:02 AM EST
MORE FROM BUSINESSWEEK

http://www.businessweek.com/news/2010-12-18/bank-of-america-sued-by-arizona-nevada-over-loan-modifications.html

Dec. 18 (Bloomberg) -- Bank of America Corp. was sued by Arizona and Nevada over home-loan modification programs intended to keep homeowners who borrowed from its Countrywide mortgage unit out of foreclosure.

Instead of working to modify loans on a timely basis, Bank of America proceeded with foreclosures while borrowers’ requests for modifications were pending, a violation of a 2009 agreement with Arizona to help borrowers facing the loss of their homes, Terry Goddard, the state’s attorney general, said yesterday in a statement.

“We are disappointed that the suit was filed at this time,” Dan Frahm, a Bank of America spokesman, said in an e-mail, referring to the Arizona suit. “We and other major servicers are currently engaged in multistate discussions led by Attorney General Miller in Iowa to try to address foreclosure related issues more comprehensively.”

All 50 U.S. states are investigating whether banks and loan servicers used false documents and signatures to justify hundreds of thousands of foreclosures. The probe, announced Oct. 13, came after JPMorgan Chase & Co. and Ally Financial Inc.’s GMAC mortgage unit said they would stop repossessions in 23 states where courts supervise home seizures, and Bank of America, the largest U.S. lender, froze foreclosures nationwide.

Misleading Consumers

The bank is accused in the Arizona and Nevada lawsuits filed yesterday of misleading consumers about requirements for the modification program and how long it would take for requests to be decided. The bank provided inaccurate and deceptive reasons for denying modification requests, according to the suits.

A consent judgment in March 2009 to resolve an Arizona lawsuit alleging Countrywide engaged in fraud while originating and marketing loans required the company to create a loan modification program for some former Countrywide borrowers in Arizona. Bank of America, which acquired Countrywide in July 2008, assumed responsibility for Countrywide’s compliance with the consent judgment, Goddard said.

Bank of America has completed 750,000 loan modifications nationwide, including 30,000 in Arizona and 20,000 in Nevada, Frahm said. He said the company has built four assistance centers in those states, held numerous outreach events, and developed special programs to address the hardest-hit populations.

The Arizona lawsuit, filed in state court in Phoenix, seeks a court order holding the Charlotte, North Carolina-based bank in contempt for violating the agreement and requiring it to pay as much as $25,000 for each violation of the accord plus as much as $10,000 for each violation of the state’s consumer-fraud law.

Nevada’s complaint seeks unspecified civil penalties and restitution.

The Arizona case is Arizona v Bank of America, CV2010- 33580, Maricopa County Superior Court (Phoenix). The Nevada case is Nevada v. Bank of America, Eighth Judicial District Court, Clark County (Las Vegas).

--Editors: Andrew Dunn, Michael Hytha.

To contact the reporter on this story: Karen Gullo in San Francisco at kgullo@bloomberg.net.

To contact the editor responsible for this story: David E. Rovella at drovella@bloomberg.net.

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