Bank of America N.A. and its wholly owned subsidiary, BAC Home Loans Servicing LP, have been sued by 15 homeowners and the Texas Housing Justice League for abusive servicing practices. The Texas suit alleges:
This lawsuit complains … of a systematic home loan servicing scheme that includes hours of telephone runaround, misleading and inconsistent information, lost correspondence, verbal abuse, and extensive delay, all of which have documented costs not only in terms of money, but in health. The facts in this case reveal the harsh reality that underlies the loan servicer’s press statements about loan modifications and forbearance agreements following collapse of the U.S. housing market.
Harryman, et al., v. Bank of America N.A., and BAC Home Loans Servicing LP, US District Court, Southern District of Texas, Victoria Division, 6:10-cv-51, Original Complaint at 1 here.
It would be hard to imagine that Bank of America and BAC will fight the facts of the case; the question will likely be whether they can get away with it. The servicer will likely claim that poor “customer service” is something that must be accepted like a slow waiter or a bad movie. The difference is of course that homeowners are not merely customers that should expect to be mistreated and lied to — homeowners have a contract with the holder of their home loan and these servicers are the agents for the holder — and moreover, servicing a home loan is not in the realm of someone forgetting your fries or being tricked into seeing Gigli.
Many of the Plaintiffs were told that they were eligible for loan modifications or other workout assistance, only to spend months being shuffled through Defendant BAC’s “Home Retention,” “HOPE”, “Foreclosure,” “Bankruptcy” and “Collections” departments with no resolution. Others simply wanted to know that they had been reviewed accurately for eligibility in any available programs, that a denial of assistance was final, and that their arrearage had been correctly calculated. Instead of providing Plaintiffs with basic information about the servicing of their loans and providing timely screenings for workout assistance, however, Defendant BAC misrepresented material information to the Plaintiffs about their loans, and forced them into a scheme of operation so dysfunctional that the constant barrage of misinformation, misdirection, and deliberate inactivity amounted to abuse and harassment.
Plaintiffs describe feeling “harassed,” “like a yo-yo,” and “blocked at every turn.” When Plaintiffs called Defendant BAC the information they received over the telephone often conflicted with written statements or prior telephone conversations. In many of the telephone calls Defendant BAC spun Plaintiffs in a labyrinth of transfers from one department to another and back again. Plaintiffs spent hundreds of hours on the telephone, explaining their stories to a different person each time they called; often they were transferred between departments, knowing they would never speak to the same person again, and wondering if the information being provided would be contradicted by the next person they spoke with. Often, it was.
Harryman, et al., v. Bank of America N.A., and BAC Home Loans Servicing LP, US District Court, Southern District of Texas, Victoria Division, 6:10-cv-51, Original Complaint at 5-6 here.
While servicers will likely complain about the heavy caseloads and large number of loans in default that require attention — one thing is certain, the foreclosure arm of these servicers and their contractors have managed to deal with the heavy caseloads quite well. If servicers can foreclose on behalf of these lenders at a record pace, they can provide accurate, helpful, timely information to the other party to the contract — the homeowners.
The Texas suit does not merely seek monetary relief, it also seeks injunctive relief as well in an effort to actually encourage or force servicers to make real changes and eliminate these complaints:
Requests to speak with supervisors or managers were met with resistance. During the course of telephone calls to Defendant BAC, Plaintiffs often found themselves disconnected after waiting on hold to speak to a supervisor, or were told that no supervisors were available. Some Plaintiffs sought out face-to-face interviews by contacting Bank of America branch offices, but simply found themselves on speakerphones with the same unaccountable departments that had previously been providing them with misinformation by telephone. Written communications did not fare better. Plaintiffs’ written submissions were often lost or misplaced. Plaintiffs were asked to sign the same documents three, four or even five times, and were asked to provide the same information repeatedly. Many of the Plaintiffs were assigned multiple “negotiators” who would not return telephone calls, or provide timely information to Plaintiffs.
Plaintiffs’ experiences are not isolated incidents, but instead reveal a pattern and practice by Defendant BAC of deliberately misinforming borrowers in default or at risk of default, and refusing to respond to Plaintiffs’ legitimate, written and oral requests for information.
Harryman, et al., v. Bank of America N.A., and BAC Home Loans Servicing LP, US District Court, Southern District of Texas, Victoria Division, 6:10-cv-51, Original Complaint at 5-6 here.
If servicers treated lenders the same way that they treat homeowners, their businesses would disappear. Let’s hope this reform effort catches on, and servicers make changes without the necessity of litigation or a magician.
Filed under: Advice for Borrowers, National Foreclosure News, Ohio, Texas
I’m glad to see that the borrowers are standing up for themselves! Unfortunately the abuses the plaintiffs allege are not news to anyone who has worked on either side of this industry. I really do believe that it didn’t start out to be a strategy to avoid helping their customers, it was most likely borne out of the crushing workloads the loss mitigation departments were under at the beginning of this ‘mod madness’. In my experience it seems that as the servicers tried to work their way out from under the mountain of mod applications they saw that this three stooges act of ‘we lost your documents’, ‘no one is available to talk to you’, ‘it takes up to 30 days to assign you a loss mitigation rep’ was actually deterring people from reapplying for loan mods. Some borrowers, exhausted with the process just let their homes go to sale because they couldn’t get anybody to stop it. Some borrowers filed for bankruptcy out of desperation to get someone at the servicer to listen… around and around it goes.. where it stops, nobody knows….
Dawn R. VanHorn
VanHorn Legal
I was amazed to read about this lawsuit after spending several more hours on the phone and writing more letters to BOA. For almost 2 years, I have been passed around by 25+BOA representatives. I have visited local branches, the main branch in Houston,(for 3 hours one day, and 2+ hours another day), out of town branches, and have the same story as those in the lawsuit. I attempted assistance with a loan modification after my home was severely damaged by hurricane IKe. I finally gave up on this when I was told I had to be at least 3 months behind, and started receiving foreclosure notices. I began making my mortgage payment, and I finally received insurace money to repair my home. I attempted to pay off my mortgage to escape BOA’s deceptive practices. BOA lost my insurance funds, refused to give me the pay off amount for my mortgage, refused to provide information about disposition of insurance funds, refused to allow me to deposit insurance funds into my account (that exceed amount owed on mortgage),put my house in foreclosure 4 times in less than a year, but they still have my insurance proceeds that exceed what is owed. In addition, they have added over $20,000 to the original amount of my mortgage since I requested to pay it off. They have now requested I send a signed document to pay off my mortgage with insurance funds, yet refuse to give me the payoff amount.
I have sent certified letters to the COO, the board, the foreclosure attorneys, and have been ignored.
I have countless hours of recorded telephone conversations with all of BOA’s intentional deception.
This has disrupted every aspect of my life!
Where can one find an attorney that has the skill, and is not afraid to take on BOA.
I left a message for one of the attorneys with this lawsuit, but I am not certain if I qualify for this kind of help.
Any information is greatly appreciated
We are going through the same thing with CitiMortgage. Our first payment was due on April 1, 2010 to be put in with the paperwork when sent. I called 3 times to make sure they had everything and was told they did.. I called on April 8 to find out why my check hadn’t cleared and was told they hold them, contrary to my contract.
I make my May payment and it goes right through my bank. I again call and am told that I never sent the April payment and was being removed from the program. They supervisor opened a case to find the lost check, but he told me that people lie to them all of the time and it won’t matter.
I immediately sent a replacement check and talked later to a supervisor who told me that it shouldn’t have been dropped and reopened my case. That the computer said my first payment was due on March 1 and after reading the paperwork that it was an error and it started April 1, but still nothing on the lost payment. I was also extended to June 25 to make my third payment, which I made over the phone on June 8 and as advised called loss mitigation so they could put a rush on it.
I had been contacted by the outside agency that goes over the paperwork for the government and it was all passed.
I call again, several times in June and July to check on the modification and was told that it was in underwriting but hadn’t been opened yet.
I continued to call and was advised by another supervisor in mid July that I had been removed from the program in June, due to not sending timely payments, including the April payment. I believe it is the same Supervisor that accused me of lying and not sending the first payment. That my June payment was late, and I read him the letter word for word telling me I had until June 25.
I finally talked to a couple of supervisors who said they would request a reopening. The woman I talked to kept asking why I would enclose the check with the paperwork? I read to her the instructions and the check list that both told me each item that needed to be included in the envelope provided to me and #2 is my first trial payment.
I talked to another supervisor this week and was told that it had been reopened July 23 and they were reviewing it again. Hopefully this will end soon, in our favor. I was told to call back on Tuesday to see if they needed anything else.
No wonder the wanted money from the government, they call you 4 or 5 times a day looking for money even when you have made arrangements etc. The phone calls finally stopped but the letters haven’t. They have probably spend $5000 just paying people to call us and mailing us multiple letters. Not to mention all of the time they spend on the phone going back and forth and not one person I have talked to has told me the same thing.
Only deal with supervisors, I learned that half way through this, I won’t even talk to the people who answer the phone, they have no idea and I end up with a supervisor anyway. I too have the problem that they give me a name, one gave me an employee number but they can’t provide an extension number so i can never talk to the same supervisor twice.
Similar experiences on my part. Keep up the fight. and join a class action lawsuit.
Faithfully, John
I am very interested in this suit. My husband and I have been treated the same way. It took over a year to go thru the retention program only to have the whole thing go wrong. We don’t know what to do. We have spent hours on the phone being shuffled from retention to customer service and back again. Any advice?
I need help trying to find out how to file a lawsuit for these same reasons, no lawyers I have talked to know anybody willing to sue BOA.
We were in the ending steps of a short sale when all of a sudden we received a call from a home inspector that was to do what we thought was a final inspection before we were to close, and was told our home was taken by Fannie Mae. Fannie Mae stated that BOA had foreclosed and they were taking possession of our home, but when we called BOA they had no idea it was foreclosed by Fannie Mae. In fact BOA still thought like us that we were in the middle to end of our short sale. But because Fannie Mae and their Real Estate Agent refused to allow the inspector access to the property the short sale fell through. Here a year later when we are getting ready to do our taxes, we noticed that we never received a 1099 on the second lein also held by BOA. When I called them they told me it was still in process, I asked them how it could be in process when the house has since been foreclosed and sold they were confused and just ended up dropping my call.
Please help me get in touch with somebody that can help me with this issue. thanks
July 7, 2011
We have had the same experience with BOA. They do not care about anyone. Our situtation has been going on for 2 1/2 yrs. We would like to join a class action suit as well.