Bank of America Faces Homeowner Class Action For Withholding Federal Bailout Funds

March 24 2010

Seattle, WA: Washington homeowners are suing Bank of America claiming the lending giant is intentionally withholding government funds intended to save homeowners from foreclosure.

The case, filed in U.S. District Court, claims that Bank of America systematically slows or thwarts Washington homeowners' access to Troubled Asset Relief Program (TARP) funds by ignoring homeowners' requests to make reasonable mortgage adjustments or other alternative solutions that would prevent homes from being foreclosed.

Bank of America accepted more than $25 billion in government bailout money financed by taxpayer dollars earmarked to help struggling homeowners avoid foreclosure. One in eight mortgages in the United State is currently in foreclosure or default.

Bank of America, like other TARP-funded financial institutions, is obligated to offer alternatives to foreclosure and permanently reduce mortgage payments for eligible borrowers struck by financial hardship but, according to the lawsuit, hasn't lived up to its obligation.

Bank of America services more than 1 million mortgages that qualify for financial relief, but have granted only 12,761 of them permanent modification, reported the U.S. Treasury Department.

According to the TARP regulations, banks must gather information from the homeowner, and offer a revised three-month payment plan for the borrower. If the homeowner makes all three payments under the trial plan, and provides the necessary documentation, the lender must offer a permanent modification.

Bank of America continues to ignore TARP regulations and instead creates more financial pressure on homeowners, the court filing states.

The lawsuit charges that Bank of America intentionally postpones homeowners' requests to modify mortgages, depriving borrowers of federal bailout funds that could save them from foreclosure. The bank ends up reaping the financial benefits provided by taxpayer dollars financing TARP-funds and also collects higher fees and interest rates associated with stressed home loans.

If you received an inadequate response from Bank of America for a home loan modification request after April 13, 2009, you are encouraged to join the suit.

BoFA Homeowner Bailout Funding Class Action Legal Help

If you or a loved one has suffered damages in this case, please fill in the form to the right and your complaint will be sent to a lawyer who may evaluate your claim at no cost or obligation.