Thousands and thousands of Americans are trying to hang onto their homes using the new loan-modification program. However, in the case of Friscia's clients, although their applications had been approved, they proceeded to foreclosure anyway.
"This is indicative of a process that is severely screwed-up," says Friscia. "Any process that is not dysfunctional wouldn't have resulted in this problem—or been cured quickly."
Friscia has filed what he believes is the first class action of this kind against Bank of America and two subsidiaries, LaSalle Bank and BAC Home Loan Servicing, for pursing fraudulent and procedurally defective foreclosure actions against a number of homeowners in New Jersey.
"Many thousands of foreclosures are plainly void under statute and settled New Jersey case law. Many borrowers never obtain statutorily required notices, and many foreclosure suits are filed based entirely on inaccurate recitations concerning ownership of the mortgage, the note or the assignment," according to the documents.
Friscia says that the action against the lead plaintiffs never should have been taken. Although they are still in their homes, they live with the threat of foreclosure daily—even though they believed that they were protected by the loan-modification program.
The suit mentions recent admissions by a Bank of America employee that she robo-signed thousands of foreclosure documents without reading or knowing what the circumstances were.
As Friscia describes the situation, the banks participated in "an undisciplined rush to seize homes" with "a pervasive and willful disregard of knowledge, facts and statutes."
"We will see how the Bank of America will respond to this," says Friscia. "This is a game of tennis and the ball is in their court."
The homeowners are asking that the foreclosure claims be dismissed and are demanding compensation for emotional distress, damage to their credit scores, attorneys' fees, lost time from work and punitive damages.
Lawrence Friscia is based in Newark, New Jersey. The firm handles foreclosure defense, bankruptcy and real estate transactions, including information and strategies for the complex area of short sale transactions.