Class of Homebuyers Claims BofA Found a New Dirty Trick
December 7th, 2011This one will take your breath away.
Via: Courthouse New Service:
Bank of America found a new way to illegally extract money from customers, according to a federal class action: deduct taxes and insurance from mortgage payments, even though the homebuyers make those payments themselves, then call the mortgage in default for the unauthorized deductions, and charge late fees and penalties.
Lead plaintiffs Rick and Susan Dolfo say that’s what Bank of America did to them.
“This is yet another tale of Bank of America cheating its customers,” the complaint states. “In 2005, plaintiffs obtained a residential mortgage loan. Bank of America subsequently bought the servicing rights to the loan. From the time the loan was issued, plaintiffs complied with their obligations under the loan agreement. They made their monthly payments, maintained the required homeowner’s insurance coverage and timely paid their property taxes. Nonetheless, in December 2009, plaintiffs noticed on their monthly mortgage statement that Bank of America paid their property taxes and homeowner’s insurance without the plaintiffs’ knowledge or consent, and even though plaintiffs also paid them. To fund the impound account, and without informing the plaintiffs, Bank of America took money from plaintiffs’ monthly mortgage payment, not leaving enough to cover plaintiffs’ monthly mortgage payment, throwing plaintiffs into default. Once in default, Bank of America, as the loan servicer, was ale to charge additional fees and penalties. Bank of America also falsely reported to credit agencies that plaintiffs were in default on their mortgage.”
Washington Mutual pulled this one on us years ago for the insurance. When contacted about it they replied with a form letter stating that they were too busy with all of the new mortgages to keep up with the insurance payments for the old mortgages. I think I still have that letter filed away somewhere.
Of course I used it as a way to pay the insurance by credit card for the points and then deposit the refund checks after bugging them about it.
Since the entire financial system is totally broken this really is the least of our problems. If you want to be really scared, take a look at all the crap that $4T in Money Market Funds are invested in.