BANK OF AMERICA/COUNTRYWIDE SLAMMED WITH HAMP CLASS ACTION BY ST. LOUIS HOMEOWNER FOR BREACH OF CONTRACT, UNJUST ENRICHMENT, FRAUD, AND NEGLIGENCE

Bank Slammed With Another Class Action
By JOE HARRIS
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ST. LOUIS (CN) – The seemingly endless string of class actions against Bank of America’s foreclosure policies continued here in Federal Court. The class claims that BofA and BAC Home Loans Servicing refuse to participate in foreclosure prevention programs despite taking $25 billion in Troubled Asset Relief Program money.
Lead plaintiff Susan Fraser says Bank of America, by accepting the TARP money, agreed to participate in at least one TARP-authorized program to minimize foreclosures. The complaint echoes similar complaints filed last week by the attorneys general of Arizona and Nevada. BAC Home Loans Servicing is also named as a defendant in the St. Louis complaint.
Bank of America signed a contract with the U.S. Treasury on April 17, 2009 agreeing to comply with the Home Affordable Modification Program (HAMP) to perform loan modifications and other foreclosure prevention services, the St. Louis complaint states.
The class claims the HAMP program requires Bank of America to identify loans that are subject to modification; collect financial and other personal information from the homeowners to evaluate whether the homeowner is eligible for modification; institute a modified loan with a reduced payment amount as per a mandated formula that is effective for a three-month trial period; and provide a permanently modified loan to those homeowners who comply with the requirements during the trial period.
“Though Bank of America accepted $25 billion in TARP funds and entered into a contract obligating itself to comply with the HAMP directives and to extend loan modifications for the benefit of distressed homeowners, Bank of America has systematically failed to comply with the terms of the HAMP directives and has regularly and repeatedly violated several of its prohibitions,” the complaint states.
“Under HAMP, the federal government incentivizes participating servicers to make adjustments to existing mortgage obligations in order to make the monthly payments more affordable. Servicers receive $1,000 for each HAMP modification. However, this incentive is countered by a number of financial factors that make it more profitable for a mortgage for a mortgage servicer such as Bank of America to avoid modification and to continue to keep a mortgage in a state of default or distress and to push loans towards foreclosure. This is especially true in cases where the mortgage is owned by a third-party investor and is merely serviced by the servicer such as Bank of America. On information and belief, Bank of America does not own a significant majority of the loans on which it functions as a servicer.”
Fraser says the financial factors that discourage Bank of America from fully participating in HAMP include having to repurchase loans to modify the loan and its collection of default fees.
“Rather than allocating adequate resources and working diligently to reduce the number of loans in danger of default by establishing permanent modifications, Bank of America has serially strung out, delayed, and otherwise hindered the modification processes that it contractually undertook to facilitate when it accepted billions of dollars from the United States,” the complaint states. “Bank of America’s delay and obstruction tactics have taken various forms with the common result that homeowners with loans serviced by Bank of America, who are eligible for permanent loan modifications, and who have met the requirements for participation in the HAMP program, have not received permanent loan modifications to which they are entitled.”
The class consists of all eligible homeowners who have been serviced by one or both defendants who have not received a permanent modified loan. The class seeks an injunction and damages. It is represented by Michael Flannery with Carey Danis & Lowe.

Complaint Here……..

21 Responses

  1. http://www.pbs.org/newshour/bb/business/july-dec10/mortgage_10-25.html

    here is the link to the PBS documentary on the HAMP frustrations ….

    hope my HAMP goes through, but without it being quicksand

  2. Joyce

    I have a letter from their accountants from a few years back addressed to FASB board. (I used to be one of them and it’s sad to believe)

    The Mortgage Bankers Association “MBA” is a strange “pro lender and bank” support organization (obviously) that carries on conventions that rank in the “monster” category taking up an entire convention center and covering nearly every Hotel in cities like New York and Chicago.

    They publish quite a bit and have a huge lobbying focus. its intended to continually expand and promote lesser government interference and rules controls on the lending community.

    The MBA serves lenders of all kind’s with a high aversion to consumers. Its busness is done in the sprit of circumventing the borrower’s rights if thise rights get in the lenders way.

    to be assured of protection from any abuses.

    The particular correspondence I speak of here is a serious example of what the accounting rules are so important. In the letter they appeal to FASB for the reason that the banks selling onto a trust cannot service the loans under SFAS 140-3.

    MBA is always whining and crying about a greater need for lessening the rigid controls set forth on the pass through structure and for removing constraints that limit the ability to control assets sold into a trust mortgage backed investment.

    FOR EXAMPLE – The Mortgage Action Alliance

    Take Action

    The Mortgage Action Alliance (MAA) is a voluntary, non-partisan and free nationwide grassroots lobbying network of real estate finance industry professionals, affiliated with the Mortgage Bankers Association.

    MAA is dedicated to strengthening the industry’s voice and lobbying power in Washington, DC and state capitals across America.

    Get involved with MAA to play an active role in how laws and regulations that affect the industry and consumers are created and carried out by lobbying and building relationships with policymakers.

    It only takes a moment to get started, and you do not have to be a member of MBA to enroll. View the simple step-by-step overview of how to join and how to participate.

    M..Soliman
    expert.witness@live.com

  3. Hey Phil …
    (this is your new IM Messenger )

  4. HAMP program is a token for use by a free society to demonstate willingness in spite of the determination made in the interest of the nation.

    THE LIQUIDATION OF ASSETS ARE NOT SUBJECT TO A RECEIVERS DETERMINATION WHERE THE TITLE HOLDER HAS NO INVOLVMENT WITH THE PURPOSE AND CAUSE FOR THE LIQUIDATION ..

    Beware and hold on to your hat as we approach year end.

    THERE CANNOT BE A NON JUDICIAL FOR CLOSURE WHERE THE CLAIMS CONTESTED BY SECURITES HOLDERS AND THRIFTS HOLDING DEPOSITOR’S FUNDS HAVE NO EFFECT ON THE TITLE HOLDER TO THE ASSET.

    Things shall be made more even more difficult for title holders that seek to honestly defend title from claims that belong in another jurisdiciton.

    ONE ACTION STATE CANNOT PROVIDE THE RECEIVERSHIP THE ABILITY TO EXERT ITS WILL TO CLAIM ASSETS WHERE NO CREDITORS EXIST

    The presense of a goverment actor is an argument that defeats the lender parties authority to foreclose under a simple procedure.

    A DEBT COLLECTOR IS MOTIVATED TO PURSUE SETTLEMENT OFFER’S . . .OF ANYKIND –
    The controversy is not heard in the proper jurisdiciton and requires a judgement be first entered; before a debt collector is entitled to a writ (possesson)..

    Entitled parties in a receivership are woefully mis interpreting the liquidation process or allowed to pursue a worse case scenario contra to economic sense and burdening tax payers.

    A RECEIVER WHO GRANTS A DEBT COLLECTOR THE ENTITLEMENT OF AN OFFICER OF THE COURT CANNOT AVOID OFFERS MADE IN EARNEST BY THE TRUE TITLE HOLDER TO THE ASSET (AS WITH MODIFCATIONS) . . OR BY
    BY ANYONE SO ENTITLED TO OFFER ALTERNATIVES . .

    MSoliman
    expert.witness@live.com

  5. M. Soliman has it right, “I think”. It appears that The President of the MBA in 2008 quoted to one newspaper reporter “we can’t dictate to them what kind of loans they can make.” That may be true, but the MBA could have damn sure made it known to the American citizens and home buyers of this nation that they should not acccept these dangerous loan programs which could only destroy the housing industry and our economy to such an extent. This group did not do their job and made it clear they are there to advise the banks. Well if that is the case, why are taxpayers contributing millions to their organizations – so they can help the banks victimize the very hand that feeds them? In fact, this very issue begs the question, what were all of the non profits doing this past seven years other than taking handlouts from the government for their non performance and assistance on behalf of the homeowner. I see no evidence of anything that they have done that would have prevented this fallout. Along with everyone else, they participated from the top setting themselves up as agencies that would eventually be needed to portray themselves helper of the victimized homeowners.

  6. THIS IS UNTRUE,
    Soooooooooo UNTRUE!
    M Soliman

    The MBA is working closely with the Department of Housing and Urban Development (HUD), the Department of the Treasury, the Federal Reserve Board and the Federal Deposit Insurance Corporation (FDIC) (collectively known as the Oversight Board).

    The purpose is to garner significant support for the HFH program from all constituents, including borrowers, originators, servicers, investors and insurers.

    MBA has already submitted many comments and suggestions on how to implement the program.

    Here is the highest contributing source of lobbying cash and their involvement in this might appear propaganda… It’s not as I believe the effort is sincere for participation reasons where the MBA remains active.

    It’s called sprinkle a few million for token efforts and seek to infiltrate the effort at a grass roots level. It’s called cut off the Joe LunchBucket drama at the head – and draw in support of more MBA discriminatory lendeing inititatives that give credit to the work done to date to ensure every American, Black or White, is entitled to recive a high cost predatory loan from a lender of thier choice.

    The orgaization is home to membership having caused the great collapse tothe US economy in the last 100 years. It’s resources and controls need to protect lenders from losing any future acces to highly proftable “predatory borrowers.”

    T’is a Joke.

  7. did anyone see the “PBS Newshour” two nights ago?

    an excellent feature on how the HAMP program has only provided a solution for a tiny percentage of those needing help. it showed that “MHA” has been a failure to the vast majority of those needing help.

    the article by “joe harris” has few misinformative bits but i think we get the jest of the situation he writes about.

  8. Anonymous

    THANK YOU

  9. Administrations and Congress — all – have “sold” America.

    Began with trade agreements — so that America was left with nothing but financial services and restaurants. Congress/Administration gave financial services/institutions — whatever they asked for — to keep the 70% Consumption oriented GDP going. Did not matter that fraud was utilized — did not matter that CEOs made out like bandits — did not matter that middle-income America was evaporating. Wealth was siphoned from middle America to — the top. And, we had no say.

    And, now — they do not NOT know what to do about it — to fix it. And, yet you still have people like Bill Rhodes pushing trade agreements — only the CEOs benefit from such one-sided trade agreements. Middle America dies.

    Congress/Administration has sold America — it will take decades to recover –if ever.

    All that was left for financial institutions to earn profits was the home you live in. YOU were the source of ongoing profit.

    Politics gone bad — very bad.

    Again, in the words of THE A MAN — NEVER AGAIN.

  10. Bill Clinton’s presidency ended up being very very complicated.

    First off, Clinton defeated a standing president who had a 92% approval rating just a year earlier ! This was such a humiliation to the republican politicians that the Clintons were already hated before they even stepped foot into the white house.

    Every time the Republicans put their foot on Bill Clinton’s neck to destroy his presidency, the president escaped, many times by simply using the BEST IDEAS from BOTH PARTIES. This just incensed the Republicans that much more, because Clinton had the “gall” to use the best bipartisan ideas, how dare he!

    As Bill Clinton gained popularity during his time in office, the Republicans politicians just went nutso.

    The republican politicians went so nutso they actually proceeded with impeachment charges even though of the original 12 republican members of the impeachment tribunal, HALF were having their own affairs.

    And that does not even count Newt Gingrich, who was having an affair with his own intern and who wanted NO PART of the impeachment of Bill Clinton.

    Near the end of Bill Clinton’s second term in office. I think what happened was this. The Bill Clinton presidency had succeeded in LOWERING the yearly operating budget deficit EACH AND EVERY YEAR Bill Clinton was in office. So the banksters were like, look how good the economy is going, you’ve shown budgetary discipline for the past 8 years, lets now kick things up a notch.

    Both the Republicans and the banksters offered the Glass Steagall ammendent as a peace offering among all the enemy combatants of the past 8 years.

    It might have also been a quid pro quo because Bill Clinton also gave presidential pardons to a boatload of people and it could have even been a tradeoff for that, but that is just a guess on my part.

    I absolutely don’t believe that Bill Clinton meant any harm or malfeasance from signing that bill. What then trapped George Bush in regards to fixing the Bill Clinton mistake was that he was going to be accused of being a racist for stopping “affordable” low cost housing employment opportunities for minorities. Bush actually bragged before the 2004 election that his term had produced the MOST low income housing in the history of the U.S. ! If you can’t beat em, join em.

    The problem now is, Barack Obama is way more in the pockets of Wall Street than either Bush or Clinton was. And yet, it is also Barack Obama led ACORN troops leading the charge against the banksters with their foreclosure protests around the country.

    However, this tends to ignore the middle class to some degree, which I think is how Barack Obama plans to get re-elected. He’s going to continue to crush the middle class and the elderly so their voting base is reduced, while catering to the richest of the rich to fund his re-election campaign, and the poorer groups in society which is growing at an alarming rate and may soon be able to afford the foreclosed houses as prices continue to drop.

    In summation, Barack Obama in the fall of 2008 promised a 90 day foreclosure moratorium, it never happened, and instead we got healthcare reform that may be overturned by the courts, and now the democrats may use foreclosure moratorium to bash over the republicans heads in 2012, even though it was SUPPOSED to have happened in 2008 while a real solution was supposed to be created.

  11. HAMP to me is a trap. The banks actually cannot prove that you owe them anything since they have lost the documents and are now busy forging new ones.

    HAMP is just another refinance gimmick to establish once again that you owe the banks mortgage payments. If you push the banks for validation of the debt and they are unable to do so, that approach seems brighter than pushing the banks to refinance the debt.

    How about you?

  12. BSE – Yes!!!!!

  13. I smell many more class actions against pretender/lenders including BofA, WFB, JPMorgan Chase, CitiBank and lots of servicers such as AHMSI and Litton. The more lawsuits the better. If you have enought lawsuits, you can put them out of business. I am fascinated to see how the Republicans are going to deal with the “spending” issue. When these banks start freaking out, is the Federal Reserve and Bernanke going to bail them out? I hope the Republicans in Congress are not going to cave and give them more money. But I am not taking a bet on that. I am a betting woman, but that bet looks bad. Giving banks huge amounts of money and not making them tow the line with a contract is either stupid or criminal, or maybe both. http://www.challengingforeclosure.com Sirak@challengingforeclosure.com

  14. Call H.O.P.E they will suggest that you trim back your food budget.
    Call H.A.M.P. , you will find you are .1% from qualification.
    Call Consumer Credit Counseling, they will refer you to web sites for free legal advice.

    If you voted for Clinton, Bush, or Obama then you owe me an apology. Phil Graham should be tarred and feathered. Greenspan and Bernake need to be shipped to Nigeria with nothing but food and water for the next 5 yrs.
    Meanwhile Sarah Palin’s daughter just purchased a stolen home and Chelsee Clinton is still celebrating her 3 million dollar wedding.

    These people have no clue nor give a rats a$$
    about the US Home owner and tax payer.

  15. Debi J.

    In the “seller-servicer” agreement which we have to sign with every bank that loans are sold to, it is a requirement that the seller buy the loan back from the company they sold it to, For example, Wells Fargo or its affiliates, originate loans, fund the loans and then sells them to Fannie. If there are misrepresentations or cause, Fannie may require that Wells Fargo repurchase the loans. In doing so, Fannie takes that money and repurchases it from the securitized pool if applicable, if not, just pays off their own portfolio loan and therefore, the loan is not a problem for Fannie because they made the bank repurchase it.

    That is why B of A is up in arms because they have been asked to repurchase those loans which will clean up part of the Fannie portfolio of which they are taking big losses because they have to guarantee the monthly payments to the investors in the pool.

    Anybody got 300 Billion dollars to start repurchasing their loans.

    What irks me is that even though Fannie had, but did not use, proper due diligence of the loans they purchased, they still allowed the servicers to intentionally fail to service the loans properly which of course was sheer negligence on both parties.

    I told you already about those new construction homes that were sold by the builders and financed by B of A and everyone else since the Congress (Barney Frank wanted Fannie to keep buying), set up those loans so the borrower could not possibly pay for the home even though they initially qualified.

    Will someone just take a look at the per centage of new builder home loans that were made across this nation whereby loans were not set up properly and homeowners victimized beyond anything one could imagine. So, B of A should have to buy them back, modify them if they haven’t already foreclosed and/or pay restitution to the homeowner if he fits in this group. I have a few of them right here on my desk. The builders knew what was going on because they had their own people originate and fund through mortgage companies they owned. The homeowner never had a chance if he had not been knowledgeable of what was going on. I have a few of those on my desk as well.

  16. Its definitely bait and switch. This has been going on since the program was launched. That money should have all gone into a separate escrow acct and not on their balance sheets. Greed is everywhere. Beware…its all about the $ its all about the power…finally some law suits, but the gamble is the judge. How many judges are going to pretend this is all okay. What have they received in order to cast a blind eye. To have a closed mind, as if we were still in the 90’s. This is fraud. This is fraud upon america. Where are all the Florida lawsuits? Why is Palm Beach County business as usual? Stealinf is a crime, fraud is a crime, racketeering is a crime. I have one case where the family ( shapiro- stern and diaz) all worked together to steal a house and gave the writ to stern- he paid 90k for a 330k mortgage….I thinks that about sums it all up don’t u?? Thank u for all of your hard work and dedication- do NOT quit! 2011 is going to be very interesting — ps. How can these banks modify the loans they don’t own?? That’s insanity too. They can’t.
    Debi. 561-389-9339

  17. To continue what I had previously written, for those loans that were considered portfolio loans and not securitized, then those loans could be modified without issue.

    So you see, it was far better for the servicer to simply foreclose rather than try to go the route of the MBS repurchase and then modify the loan.

    Knowing that the economy was going to suffer big time on the employment scene, that even if the servicer did modify the loan, they were not sure the borrower would be able to make even that payment. And it is true, a substantial percentage did not honor their modification agreements.

    What is really going to make everyone so outraged is the fact that even if Wall Street made off with billions, this whole thing could have been resolved even though the government (the regulatory and the Congress) was stupid enough to allow it to happen in the first place. Yes, I say stupid because they knew they were allowing it to happen to a degree, but never did they realize for one second, to what degree it would destroy America and its economy both domestically and foreign. Thanks to the Congress. In 2007, the opportunity to begin MOP UP of this mess began and we did nothing more than throw more dirt on the floor like the vacuum dealer that once to prove he can clean up any mess.

  18. This unfortunately is not anything new. Anytime and we have been saying this since 2007 that in order to modify the loan (a securitized loan), the servicer has to repurchase the loan, then modify it and if it fits in the scheme of things, can put it back into the pool or some other pool. This is standard operating procedure and has been out there since the cows came home. Why is it coming across as something new.

    Fannie and Freddie have been doing it for years and it has worked out when it was allowed to modify the loan due to hardships or whatever. However, now because of the yields and investor expectations that purchased those securities, the modified loan is not going to fit in the scheme of things and that is just the way it is.

    Secondly, because of the credit crunch and the fall back from the subprime business, there are no loans being originating with which a service or trustee or whoever, could rightfully substitute the loan for one that they intended to modify. Therefore, substitution of collateral does not work. I have to tell you, everyone in the business knows that this is sop.

    This is the reason I tried to deal with the FDIC on what it is they thought they were doing trying to modify the loans in the first place. They would have had to buy them back and then modify the loans. Did they do that on the INdyMAC deal, most surely they had to and if not, then those investors lost. I am checking on how Bair handled that deal as no one ever answered the question. Maybe she was able to pull it off through other means because lo and behold, the HAMP program was developed and was of course a “complete” failure.

    The powers that be knew all the time that the HAMP program could not work and as such, they backed these lenders into a corner for – you guess it – REPURCHASE OF JUST ABOUT EVERY FORECLOSURE THAT IS GOING TO HAPPEN.

    I could have sworn that several years ago, late 2008 and 2009, that the gov. purchased 1 Trillion in Fannie and Freddie securities back but I could never figure out how they were going to pay for them. In doing so, that is why they were able to offer the HAMP program to some degree because I thought the gov now owned those loans. No other agency was modifying unless the loan was only 2 to 4 months deliquent, or there abouts.

    But now I think I know how the 1 Trillion is going to be repaid, the banks are going to have to buy them back from the Fannie and Freddie (the gov). Where did the 1 Trillion come from anyway? How was it booked? and which MBS packages were repurchased? Never could find out anything about this so perhaps none of it came about.

    Like I said, this is the way the MBS works, but up until 2002 or thereabouts, Fannie and Freddie sold “a paper loans”, not junk.

    Thanks for writing this article. Just when I think I knew something about mortgages, someone prints a different side.

  19. My comments were response to put back post. I never got past the modification scam so hamp wasn’t an option, was it an option.

  20. The unjust enrichment make that just take thr yaughts in the south of France take their personal assets see how they like it I actually wonder how such greedy people would cope bring poor with no home no peace no credit score left being treated like a lepor when trying to get a good insurance on so much as a vehicle despite a great history of paying all your working life and bring descriminated against because you have now Been ” profiled” promotion in your job is not going to happen if you work for a large corporation let’s see how those people who were unjustly enriched cope with that well it’s time they learned it will be character building….preferrably…. would orange jumpsuits be out if the question…. Thought so

  21. Its not just that HAMP for HAMPSTERS left homeowners spinning in their cages, but that while they were spinning in their cages, the banksters were implementing parallel foreclosure.

    As soon as the HAMP is rejected, the homeowner is subjected to all penalties, fees and the differential between the lower trial payments and their original mortgage loan payment.

    Sounds like Parallel Foreclosure is Bait and Switch.

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