Huffington Post:
In a new lawsuit seeking class-action status, homeowners accuse Bank of America of systematically and deliberately failing to comply with the Obama administration's mortgage modification program by lying to borrowers about missing paperwork and fudging their financial information, among other things.
Under the Home Affordable Modification Program, loan servicers get $1,000 for every mortgage they modify on a "permanent" five-year basis. The modifications consist mainly of interest rate cuts and principal forbearance. A HAMP-eligible borrower is typically put in a temporary trial modification that reduces the monthly payment by $500.
From the beginning, HAMP has been beset by borrowers' stories of banks losing paperwork and otherwise not putting borrowers into permanent modifications after granting the initial three-month trial modification.
"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," says the complaint, filed in federal court in Arizona and first reported by Courthouse News.
The suit is similar to one filed in federal court in Seattle four months ago.
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