California Real Estate Fraud Report

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06
Jul

Borrowers Plan to Sue Bank of America for Loan Modification Fraud

It was just a matter of time: banks being sued for violating the terms of their own loan modification agreements.

Testing the theory of “we can do whatever we like, to hell with contracts”, mega-banks have been twiddling consumers on the end of a proverbial stick (or shaft) ever since loan modifications began.

Now Bank of America NA and subsidiary BAC Home Loans Servicing LP are the focus of a proposed lawsuit by borrowers alleging breach of contract after the banking giant ignored the terms of its own loan modification agreement with borrowers and proceeded with aggressive foreclosure tactics.

This lawsuit is in relation to permanent modifications of residential mortgages through the U.S. Treasury-administered Home Affordable Modification Program (HAMP). HAMP offers financial incentives to loan servicers who complete modifications. The Treasury also offers incentives for “proprietary modifications, which banks offer independently of the government guidelines,” according to the Daily News.

The picture for these accusations gets very complicated: some of the allegations are that the monies the banks received under the Treasury Departments TARP (Troubled Asset Relief Program) were a quid pro quo for working with consumers to prevent foreclosures. In light of that agreement, the Daily News reported in the same article that U.S. Treasury officials was withholding incentives from Wells Fargo & Co., Bank of America Corp. and JPMorgan Chase & Co. for claiming that many borrowers were not eligible for HAMP modifications. The banks deny this practice.

Bank of America comes out at the top of paid Google searches for “HAMP Home Affordable Modification Program.”

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The information and notices contained on The California Real Estate Fraud Report are intended to summarize recent developments in real estate fraud, mortgage fraud, short sale fraud, REO fraud, appraisal fraud, loan modification scams, loan modification fraud and other real estate related crimes occurring in Los Angeles and California. The posts on this site are presented as general research and information and are expressly not intended, and should not be regarded, as legal advice. Much of the information on this site concerns allegations made in civil lawsuits and in criminal indictments. All persons are presumed innocent until convicted of a crime. Readers who have particular questions about real estate fraud, mortgage fraud and appraisal fraud matters or who believe they require legal counsel should seek the advice of an attorney.

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