Arizona and Nevada Have Filed Suit Against Bank of America
The Los Angeles Times has reported that Arizona and Nevada have filed suit against Bank of America over loan modifications. Click here to read the full article. The Times reports that “troubled borrowers increasingly have accused banks of acting in bad faith by promising them permanent modifications that are never delivered.”
As a Georgia consumer bankruptcy attorney, I have heard many complaints from Georgia borrowers. The story usually begins with a mortgage company calling the Georgia borrower and telling them that they may qualify for loan modification. The borrower is then told that they may make half of the regular mortgage payment for the next six months while the bank considers the loan modification.
After the six month consideration period has passed, the Georgia borrower is then told that they do not qualify for the modification. No clear explanation is given as to why they didn’t qualify. Some borrowers are told its because they failed to fax in some important document that they were never told to fax.
The borrower is then hit with the pleasant surprise of the mortgage company demanding that they must make up for all of those half payments immediately. They are then told that if they don’t bring the loan current, they will face foreclosure.
The Times reports that Arizona Attorney General Terry Goddard accuses Bank of America of leaving many borrowers in her state in limbo as the bank failed to make timely decisions on the loan modification process and ultimately leaving the borrower in a worse condition when the modification is finally denied. “Goddard said Bank of America failed to provide justifications for denials of modifications, misled borrowers into thinking they had to miss payments to obtain modifications, and initiated foreclosure proceedings while trial loan modifications were in place — all in violation of its settlement with the state last year.”
What a mess! The good news in Georgia is that you can file Chapter 13 to stop a foreclosure of your home.