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Lawsuit Accusing Bank of America of Defrauding Borrowers Stays in Arizona Court

March 29, 2011

Our Rubidoux predatory lending lawyers routinely sue banks for misleading and defrauding our clients by not seriously considering them for loan modifications. So we were very interested to read that the state of Arizona is making the same allegations and has already scored an early victory in court. The Arizona Republic reported March 22 that a judge has declined to move the case to federal court as Bank of America had requested. Arizona Attorney General Tom Horne, a Republican who took over the case from Democrat Terry Goddard, said the case would be heard more quickly in state court, ultimately benefiting Arizonans hurt by the alleged practices. The case parallels a similar one filed by the state of Nevada against Bank of America.

Arizona alleges the bank violated its Arizona Consumer Fraud Act with multiple deceptive acts against borrowers seeking a loan modification. These include allegations that the bank started foreclosure proceedings before deciding whether to grant a loan modification; not responding to applications and requests; and rejecting applications without a good reason. The Nevada lawsuit, which like the Arizona suit was filed in mid-December, makes similar allegations and also accuses the bank of reporting false information to credit bureaus, incorrectly telling borrowers they needed to be in default before they could get a modification, and failing to convert trial modifications to permanent ones. No trial date was reported for either suit. Bank of America said the cases were "hasty."

As Garden Grove predatory lending attorneys, we think the suits are actually coming far too late in the mortgage crisis. Homeowners have been losing their homes to preventable foreclosures for more than two years, and the kinds of behaviors Bank of America is accused of have been well reported since at least 2009. That's one of the reasons we've started filing similar lawsuits on behalf of individuals with the same kinds of problems. Under the Home Affordable Modification Program, lenders are supposed to grant modifications or convert trial modifications into permanent ones when the borrower meets the criteria -- period. When banks fail to do this for no reason or for spurious reasons, we believe it's a form of predatory lending and defend our clients vigorously.

If you've been fighting for months to get a fair hearing on a loan modification for your home, you should call Howard Law PC to see how we can help. We are experienced Oceanside predatory lending lawyers who understand the rights of borrowers -- and how to enforce them. HAMP has rules intended to get borrowers a timely decision on loan workouts, but it doesn't provide any way to enforce those rules. As a result, Californians who believe they are being foreclosed unnecessarily or incorrectly can only file lawsuits in order to get a second opinion from an unbiased observer, in this case a judge. We also handle lawsuits from borrowers who believe their lenders never contacted them to discuss foreclosure alternatives, as California law requires.

Howard Law offers free, confidential consultations, which allows you to tell us your story and get an experienced attorney's opinion at no further cost or obligation. To learn more or set up a free consultation, send us a message online or call us toll-free at 1-800-872-5925 today.