Everyone has had the experience of thinking that something just is not right. Ok, we know that something is wrong. We know it is rotten. It may have been the time your teenager was going to a study group on Saturday night or maybe you got passed over for a job even after your boss tells you that everyone is being treated equitably. We have all been there.
We knew that things were rotten with the Home Affordable Modification Program (“HAMP”). How many times could the Bank lose the paperwork, pay stubs? How long could a modification be in underwriting? The Trial Payment Plan (“TPP”) said it was 3 months, but it had been 12 months. How could the Bank not have received the Trial Payments when they had received all of the regular monthly payments prior to HAMP? How could a loan modification be approved and then denied 6 months later?
Well in the case of Bank of America and BAC Home Loan Servicing, the facts are starting to come to light. In a Second Amended Consolidated Class Action Complaint filed in Massachusetts, the Plaintiffs allege that Bank of America systematically failed to comply with the terms of HAMP. It alleges that the Bank had financial incentive to avoid modifying home loans and to continue to keep a mortgage in a state of default or distress and to push loans toward foreclosure. According the Compliant, this was especially true when the loans were owned by a third party investor and the Bank was merely servicing the loan.
Recently, a declaration filed in the case by a former Bank of America employee alleges that employees were told “to lie to customers and claim that Bank of America had not received documents it had requested, and that it had not received trial payment(when in fact it had). We were told that admitting that the Bank received documents would “open a can of worms” since the Bank was required to underwrite the loan modification within 30 days of receiving those documents, and it did not have sufficient underwriting staff to complete the underwriting in that time.” In addition, the employee alleges “Employees were rewarded by meeting a quota of placing a specific number of accounts into foreclosure, including accounts in which the borrower fulfilled a HAMP Trial Period Plan.”
If you applied for a loan modification with Bank of America or any other HAMP servicer and you think you should have been approved, you should complain to the Bank, the California Attorney General and you should try to join a class action lawsuit. If you are still in the house, apply again for a loan modification and put in the hardship letter all evidence you have that you were wrongly denied before.
Character counts. At the end of the day, what we do matters. If your house is a big deal to you, then act like it is a big deal. If you should have received a loan modification, you need to speak up. If you don’t, they win.
This is a complicated area of the law and I recommend you to seek legal counsel prior to taking any action on a loan modification or proceeding with a short sale or foreclosure. There may be personal and tax liability. I provide a free 30 minute consultation at all of my offices located in Walnut Creek and Brentwood.
WE ARE A DEBT RELIEF AGENCY. WE HELP PEOPLE FILE BANKRUPTCY RELIEF UNDER THE BANKRUPTCY CODE. THIS INFORMATION IS NOT PROVIDED AS LEGAL ADVICE AND SHOULD NOT BE RELIED UPON IN MAKING ANY DECISION REGARDING A VOLUNTARY DEFAULT, SHORT SALE, FORECLOSURE OR BANKRUPTCY. THIS INFORMATION IS NOT A SUBSTITUTE FOR OBTAINING TAX & LEGAL ADVICE REGARDING AN INDIVIDUAL SITUATION. © 2013 Joan M. Grimes. (925) 939-1680 Grimesbklaw.com