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Bank of America settles lawsuit with state over mortgage redos
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LAS VEGAS REVIEW-JOURNAL
Bank of America Corp., aside from the nationwide foreclosure deal, has settled a separate lawsuit over mortgage modifications brought by Nevada for almost $800 million, state Attorney General Catherine Cortez Masto said Friday.
The case is not part of the $25 billion multistate accord that Bank of America and four other large banks reached with the federal government, Nevada and 48 other states regarding abusive foreclosure practices stemming from the housing collapse.
Masto said the agreement requires the nation's second-largest bank to set aside $750 million for lien reductions and short sales. The bank will pay $30 million to the state for consumer protection efforts.
At a news conference in Las Vegas, Masto said the deal also mandates that the bank suspend foreclosure sales for any borrower eligible for a mortgage loan modification program.
Masto's office sued Bank of America in December 2010 to undo an agreement over home loan modifications tied to the bank's Countrywide Financial Corp. unit, alleging the lender failed to meet its obligations. The case was being litigated in federal court in Reno.
"We believe this settlement will help provide additional support for homeowners who need assistance, brings more certainty to the housing market and aligns to our ongoing commitment to help rebuild our neighborhoods and get the housing market back on track," Bank of America spokesman Rick Simon said in a statement.
In October 2008, Masto reached an agreement with Countrywide Financial to settle allegations of fraud in mortgage origination and servicing.
In August, Masto's office filed an amended complaint seeking to terminate the settlement, arguing the bank and its subsidiary violated the agreement by failing to modify loans for eligible homeowners.
Contact reporter Chris Sieroty at csieroty@reviewjournal.com or 702-477-3893.
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Principle reduction to current market value, straight across the board on all properties bought during the falsely inflated market values and corrupt loan origination period, makes the most sence to me.
CLASS ACTION! Borrowers who: (1) obtained conservative mortgages (<80% LTV) and (2) stayed current (never defaulted) despite being increasingly upside down due to the Borrowers who defaulted are the ONLY people damaged (lost money)!
Borrowers who: (1) obtained conservative mortgages (<80% LTV) and (2) stayed current (never defaulted) despite being increasingly upside down due to the Borrowers who defaulted are the ONLY people damaged (lost money), yet are still ignored. REFINANCING? Even with refinancing of debt that exceeds property value, the borrowers who defaulted may still win in the end as they are not upside down! To make matters worse, Government refinancing programs, such as HARP1, is financially HARMFUL to borrowers who must pay upfront FEES (non-refundable) and pay tens of thousands of dollars to resolve any gap btwn existing loan balance and refinance amount. HARP2 removes refinance limit, but the honorable borrower is still upside down (loan > property value)! GOVERNMENT GETTING RICH. In regard to the AG settlements, the States might keep most of the shakedown money for themselves, and will give a little to those who defaulted. REAL SOLUTION IGNORED. Years ago, Govt programs should have reduced Principal in phases to borrowers who stayed Current (never defaulted). That would have avoided most or all defaults and real estate values would have been more stable and thus the economy. ADS. radio ads now offer "credit restoration" to those with foreclosure or short sale on record. So the FICO system has no integrity? TV ads say STOP paying your mortgage if upside down. Those who pay their mortgages are mocked as fools.