Bank of America to Pay $6M to Couple Bankrupted, Evicted
An eight-year dispute over allegations of debt harassment, illegal foreclosure and a resulting bankruptcy has been resolved, with Bank of America agreeing to pay $6 million to the couple affected. The proposed settlement has reportedly affected every aspect of the family’s life. While $6 million may sound like a lot, it’s far less than the $46 million originally ordered by a federal judge in March. At the time, the judge opined the mortgage modification process of the bank and the mistaken foreclosure on their home (in California) left them not only homeless, but bankrupt and battle-weary and demoralized.
It all started back in the spring of 2009. At the time, the bank issued statements indicating it wouldn’t consider loan modifications for its customers who were current on their payments. Based on this, the couple stopped making their mortgage payments, as they were underwater on their home and needed a loan modification. After they stopped payment, they made an estimated 20 requests for loan modification. However, the bank always declared the requests were insufficient, incomplete, stale, needed to be resubmitted, denied without reasonable explanation or lost.
In the summer of 2010, the couple filed for bankruptcy. This halted the foreclosure sale – or it should have, but the bank illegally took over the home anyway. The family received a three-day eviction notice. The couple, forced to move on such notice, suffered severe stress. The wife, in fact, was hospitalized for a heart attack, which doctors later characterized as stress-induced. The husband attempted suicide.
The bank later reversed the sale and the family was allowed to move back in. However, they were slapped with a $20,000 fine from the homeowners’ association for dead landscaping.
In the midst of all this, according to court rulings, the couple received numerous harassing visits from bank officials and others.
Foreclosure attorneys for the couple say the stress and the effects on their health continue, as they continue to live with uncertainty. Plaintiffs say a settlement is necessary in order to preserve their health and well-being. In exchange, the bank will agree not to pursue an appeal. The settlement also allows the bank to sidestep a $40 million donation the court had ordered to be paid to five law schools associated with national consumer non-profit advocacy groups. It’s not clear whether those groups would receive anything following the settlement.
At the time the judge ordered that compensation, legal experts lauded it, saying it resolved the issue of how to penalize corporate wrongdoers in a meaningful way without resulting in plaintiff overcompensation. Such high-end damage awards often trigger appeals for excessive damages, but that wouldn’t have been an issue here. The judge commented in his ruling that the fine was intended to be substantial enough not to be “laughed off in the boardroom.”
Plaintiffs said they fully supported the message the judge sought to send to the bank regarding its “cruel” and “heartless” treatment of them, but were concerned about the outcome of a lengthy appeal.
The bank, while not accepting full responsibility for this ordeal, did release a statement saying its performance in this case was “unsatisfactory.”
If you’re battling debt collection in Miami or the surrounding areas contact Jacobs Legal for a confidential appointment to discuss your rights. Call 305-358-7991. Also, don’t miss Miami Foreclosure Attorney Bruce Jacobs on 880AM/the Biz, every Wednesday at 5 p.m. on “Debt Warriors with Bruce Jacobs and Court Keeley,” discussing foreclosure topics that matter to YOU.