More frustrated homeowners turned to federal court this week for help with their mortgages, saying Bank of America and Wells Fargo failed to provide promised payment modifications.
The two cases, filed Tuesday in Massachusetts, seek class action status.
Three specific families are identified, one with a loan serviced by Bank of America and two by Wells Fargo - the nation's two largest mortgage servicers. They were granted trial modifications, according to court documents, but haven't received long-term modifications despite having submitted all required documents and made timely payments for more than three months.
The claims are simple, the two filings say: "When a large financial institution promises to modify an eligible loan to prevent foreclosure, homeowners who live up to their end of the bargain expect that promise to be kept."
The Home Affordable Modification Program (HAMP) is the main federal plan for reducing mortgage payments, part of a $75 billion plan to stem the national foreclosure crisis. HAMP calls for a three-month trial period, intended to give time for the homeowner to demonstrate an ability to keep up with the lower payments. However, there are growing reports of homeowners in trial plans ultimately being rejected for modifications despite making their trial payments or even being foreclosed on during the process.
The modification process has generated so many complaints that regulators and lawmakers are pressuring lenders to improve.
The Massachusetts cases, which are not open to borrowers in other states, say homeowners are "living in limbo" and spending scarce resources on payments that might ultimately not save their homes.
"Some are in fact continuing to receive foreclosure notices," said Stuart Rossman, a lawyer with the National Consumer Law Center in Boston, which brought the lawsuit along with a law firm and another advocacy group.
Bank of America didn't immediately respond to a request for comment this afternoon. The Charlotte bank may not yet have been served. The bank has said it is taking "extraordinary measures," including sending workers to borrowers' homes, to help customers fulfill requirements for long-term modifications
A Wells Fargo spokeswoman said the company "will respond to the lawsuit once we have a chance to review it."
The San Francisco bank, which bought Wachovia late in 2008, has been "diligently working to convert - from trial to completed modifications - customers who meet the HAMP guidelines," Debora Blume said in an e-mail. "Unfortunately, not all customers who enter a HAMP trial do ultimately qualify for the program. In these instances, we work to determine if another foreclosure prevention option is available to them. "
Earlier this month, 10 Ohio homeowners filed a civil case in federal court against Bank of America, also saying the bank broke promises to modify their payments.
The circumstances differ in that the Ohio homeowners say they were promised modifications during a federally sponsored event last year. As of the filing date, they hadn't received documents or had their payments reduced, meaning they are not as far along in the process as the Massachusetts families.
Are you struggling to get a loan modification? Please e-mail me, shopkins@charlotteobserver.com, or call direct, 704-358-5173.
Wednesday, February 24, 2010
Homeowners sue BofA, Wells Fargo
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31 comments:
Let's see... They are suing because the bank is failing to provide them with an easier way to default on their original agreement. Makes sense to me
let them default and live on the street. the reason the banks have no reason to re-finance the loan is because they all have a guarantee from the US government that the fed will cover 100% of all mortgage loan losses.
so the bank can either choose to get 100% of their money back from the US government (taxpayers) or they can refinance the loan and MAYBE get 1/2 of their money back. which do you think most banks will choose?
I hope when the banks win these suits because the borrower's claims are found to be false that you will provide equal print space to the result.
So which bank do you work for? BofA or Wells Fargo? I suggest that you try walking in their shoes before you cast judgment.
no what is so bad is when you have a 13% interest rate and BOA still does not work with you, I have made 9 trial payments and still waiting for modification and i have to send documents over and over and over, in July it will be 1 year of this mess... 13% interest rate and still waiting.... so what about all of us that are getting taken advantage of thru sub-prime loans???????
all we read about are the poor people that lost there jobs and i feel sorry for them, i really do...but yes what about writing about all the sub prime lending that has done on that NO ONE has written about?? 13%,14%15% interest rates,, don't tell me that BOA and Wells Fargo are still not making money on those people..... we are caught in just a big a trap as those who lost there jobs.......BOA and Wells Fargo just continue to drag there feet.....
"...13% interest rate and still waiting.... so what about all of us that are getting taken advantage of thru sub-prime loans???????"
~~~~~~~~
What was your FICO Score?
How much of YOUR money did you put down on the property?
Did you ever consider, for a moment, that you had no business buying a home if all you could get was a 13% loan?
Typical Obama mush
BIG promises little action
Anonymous Anonymous said...
no what is so bad is when you have a 13% interest rate and BOA still does not work with you, I have made 9 trial payments and still waiting for modification and i have to send documents over and over and over, in July it will be 1 year of this mess... 13% interest rate and still waiting.... so what about all of us that are getting taken advantage of thru sub-prime loans???????
So you were aware it was a sub-prime loan? Did anyone explain why you needed a sub-prime loan?
If you do not qualify, as do the majority of those seeking to buy do, then you get a higher rate and often a higher down payment.
That means you have had problems in the past and most likely you may have them in the future.
And my understanding is that people who are in foreclosure have missed a certain number of payments.
So if the Bank is allowing you to live in the home with out requiring the late payments, and your only concern is that they have not sent you some paperwork to verify a work out, then to punish them with a lawsuit does not seem to be the best route.
I assume you are paying the newly negotiated payment and have been doing so since July as you say.
So perhaps you are not getting taken, but are getting taken care of by BOA, due to your apparent loss of value in your home due to the declining market.
After all, imagine if the market had soared and your house was now worth three times what you paid for it. Would it be unfair for BOA to force you to move and take the appreciation due to your current circumstances?
It seems to me that a lot of people need to stop being the victim and realize they may have painted the backdrop to this play they call their tragic life.
I wish you all the best and hope your road is easier in the future as I do for all of us.
"When a large financial institution promises to modify an eligible loan to prevent foreclosure, homeowners who live up to their end of the bargain expect that promise to be kept."
If the homeowners had lived up to "their end of the bargain" on the original mortgage then there would be no issue. If you get a mortgage you agree to pay it back. And the house is the assurance that you will, period.
i do not own a home, but i can say that if i dont qualify for a loan, then why give it to me? that IS being greedy and abusive of power. Everyone wants to own their own home, so its no wonder people take the sub-prime loans. But if a college educated loan officer cant see anything but making the deal, then i would call that abusive bank practices.
"I believe that banking institutions are more dangerous to our liberties than standing armies."
-- Thomas Jefferson
Yay, free stuff for irresponsible home"owners"! This is why America is going down the toilet.
Moses said
It is not your home until the loan is paid off it is the banks. So why does every headline talk about people losing their home?
Thomas Jefferson said "
The democracy will cease to exist when you take away from those who are willing to work and give to those who would not."
Why should the banks modify their loans? They owe the money. Then why shouldn't they modify mine.
I fell sorry for those who cannot pay due to loss of job etc. But get real. Even though Obama wants socialism it is not here yet.
I worked as a modification negotiator and I promise you the banks lied to almost every person they promised a solution to. I saw it happen to disabled police officers, disabled veterans, widows, senior citizens. I owuld sit there and the bank reps refused to put anything in writing and then they would tell these people to wait for the offer they discussed in the mail the next day from Fed Ex. Nothing would ever come. Other people got it in writing only to have the bank rejectt their payments and claim they weren't eligible.
I had one disabled vet who was a single father who got his offer in writing. He mailed in the final paperwork with his next payment and they sent back the money and said he didn't send in the paperwork. But when he called to inquire they told him why he was rejected and they were looking at his paper work on the computer. but they still wouldn't honor the terms.
The banks would "lose" the peoples applications and documents as many as 5 times. The banks refuse registered mail so the applicants can't prove they mailed requested documents. It's sad. The vast majority of people were so honest and decent. They really are. I have sat with thousands of people and picked apart their lives. Most made mistakes but most of the time there was something unethical on the originator or the lenders part. ike the one guy who had $525 in MI every month and the bank wouldn't drop the MI at all. He was in foreclosure just because of the MI. He could affor his $1500 mortgage payment
Most of the Banks are Greedy and Bankers are Scum. Why would the banks make those high interest loans? Oh, because they had to? No, because they're a bunch of greedy scum wanting to exploit the uninformed with 13, 14 and 15% interest rates and when they closed got 3,4,5 points origination $$ in their pockets.
All of these Banker post say "didn't you know you got a subprime loan?" You're the idiots because now the chickens have come home to roost and Big Banks are having to deal with the huge mess that THEY made. Give me a break!
7:06 you pretty much took my answer. To 7:00: were you unaware that you signed onto a loan that either was or could be 13%? Is this a first mortgage or a second?
What is the reason it was a sub-prime? Down-payment amount? Debt to income ratio? Credit? Evil loan officer?
Anonymous said...
i do not own a home, but i can say that if i dont qualify for a loan, then why give it to me? that IS being greedy and abusive of power. Everyone wants to own their own home, so its no wonder people take the sub-prime loans. But if a college educated loan officer cant see anything but making the deal, then i would call that abusive bank practices.
February 24, 2010 7:50 PM
You may have contradicted yourself?
People take sub-prime loans because they have tried other venues and have been turned down by college educated people, several times.
But they want something so bad they keep looking. Keep in mind that perhaps this is a pattern they repeat, as they may also have overpaid for other items instead of waiting for a better credit climate once their iffy credit has cycled off their credit report.
This is America and we all are responsible for our own lives. We all normally trust that we will not need or become a nanny state.
Keep in mind the Government established the Sub-Prime market rules, and expects the financial industry to adhere to them.
So there are no bad guys here, just a bad decision by an individual which spirals out of control with the help of a, somewhat, well intentioned government program.
Yes Financial Organizations make more money off of the loans say 6 percent versus 13. But when you start paying more, that should be the stumbling bloc that says, I am not willing to pay this much, and will wait for a few years until my credit is in better shape.
Plus even at 13 percent, what good is the one year old loan in foreclosure, with no income stream, and in most cases a sub-prime is located in an area which has minimal growth, to anyone including the abusive bank you mention.
So take some time before you buy. You may lose a few years of living in a house, but it is better than losing the house in a year or so.
All the best.
So many of these posts suggest that only people who didn't deserve a mortgage are now in trouble - and I have seen lots of those people and agree they need to take some responsibility. But there are lots of people like me. I paid $200k cash against a $400k house 10 years ago. I made every payment in timely fashion. I did qualify for a good rate. The house increased in value to $600k + and through remodel and other, I increased my mortgage to about $325k, still a huge equity stake. Then I lost my job and the home value nose dived. I have it listed now (for 18 months and counting), keep dropping my price, I am now asking less than I actually put into it and still cannot sell it. I have a lease lined up, but the lease will only pay the mortgage if my mortgage gets modified. I'm not asking the bank to forget that money, just asking them to push it out further until things improve. Their practices led to this collapse, I shouldn't get sucked down with it.
why dont we all try living within our means, not overspending, not being overly in debt or over mortgaged, not buy homes above our means, se our own brains and financial sensibilities instead of loan officers.. I am a little tired of hearing everyone blame their financial mishaps on the banks.
As an insider in one of these large institutions, it is my opinion that not only are they "too big to fail" they are also "too big to function". Too many layers of management with no one wanting to take responsibility to make decisions. Everyone just seems to go about their business like robots. For those who keep placing the blame on big banks and Wall Street, there is enough blame to go around for everyone involved in this mess. If we don't wake up and do something constructive to fix this mess, our economy will never heal.
The reality is that a foreclosed home is now used as a comparable when your home value is considered for sale in the future or refinance. This hurts all of us, not just those who cannot make their payments. It is my understanding that the same sleazy underwriters who approved these loans are now working in the modification departments at the same banks...they have have not been accountable at all for what essentially mortgage fraud by approving subprime borrowers. Interesting how some still have their jobs. Oh, and thank you Barney Frank for starting this whole disaster...read up people, this has been brewing for years!
I wish Bank of America would just die and fade into the depths with the other thieves and crooks in this world. I would love to see them disappear.
Thieves, crooks and liars.....that's what Bank of America stands for. I hope they get sued by every client they have and lose.
The sad part here is that all these people blaming the banks and calling them "scum" are complete idiots! Banks are in the business of making money like any other business. The problem is that we have stupid consumers that want to live outside there means! If the "scum" bank and loan officer hands you your paperwork and you see your interest rate is high....here's a thought....DONT SIGN THE PAPERWORK...its not like the bankers are holding a gun to your head to sign anything. It's your choice as to whether or not you want to move forward. I agree that everyone wants to own a home, but if you cant afford one...DONT BUY IT! And if it wasnt for the "scum" banks then you wouldnt be able to purchase a home, lets a face it...how many people can honestly pay cash for there homes??? And to the previous comment...completely agree....THIS IS NOT YOUR HOME! IT BELONGS TO THE BANK UNTIL YOU PAY IT OFF!! So you aren't losing your home, you are being evicted out of the bank owned home!!! These piece of crap "sub prime" consumers need to get over it....this is the reason you are "sub prime" in the first place cause of YOUR irresponsibilty...and if the banks can take advantage of you....so be it...good for the banks! I feel bad for the Prime consumer who has to suffer cause of your stupidity!
The whole Making Home Affordable plan seems to have been a massive failure. I have yet to hear of anyone I know facing foreclosure who has had success with this...
Anonymous wrote, "But if a college educated loan officer cant see anything but making the deal, then i would call that abusive bank practices." - this is a very good point.. banks are mostly to blame!
http://blog.wellsfargo.com/wachovia/2009/08/a_hamp_loan_modification_updat.html
Stella, read the comments at the end of that Wells fargo blog for some good insight into what IS really going on with the modification process. Heck, you could almost get a class just from the blog commentators alone!!
I think these santimonious folks who are calling others "piece of crap subprime consumers" are right. We should just walk away from "the banks" house, let them foreclose on hundreds of thousands of home and then try to sell them and watch the santimonious folks whine then about " my values are going down". Stupid. I would walk away from these homes as fast as possible. That's fulfilling the contract, I don't pay, so they get "their home" back.
I'm dumbfounded by the hostility of the comments here. Sanctimonious is correct. Arrogance and luck are the only thinks that separate the secure home owner from the foreclosed borrower. All it takes is the loss of a job or an illness. I didn't get a sub-prime loan - I did it all by the book. I still lost my job of 7 yrs and was replaced by a pregnant unwed teenager who was the bosses niece. I took the first job offered to me at 35% less than I was previously living on and never ONCE collected an unemployment payment or ANY public assistance. I have not missed a single payment on my home or my credit cards. My bank can't touch my house so instead, because my income fell, they raised my cc rate from 5.9%FIXED to 22.9% ADJUSTABLE even though I have never missed a payment and have a good FICO score of 760. This same bank took 250M from all of us as part of the bail out and turned around a few days later and bought another bank for - hold on - wait for it - 250M dollars. OUR MONEY.
You negative arrogant people here are dogging the wrong people. The banks who TOOK YOUR MONEY to save these homeowners DIDN'T SPEND IT FOR THE INTENDED PURPOSE. YOU SHOULD BE LIVID WITH THE BANKS and the CONGRESS WHO DIDN'T POLICE THE DISTRIBUTION OF THE MONEYS. Instead, you blame the borrower when you have NO IDEA what's really going on or WHY they need help with loan modification.
Wow. I am glad I can finally see the light about my own stupidity. I suppose when my son was born I should have refused the Intensive Care Unit and the subsequent home treatments that were needed. After all, had I refused, surely that would have led to his death and then 10 months later I wouldn't have had to worry about his 8 week icu stay (3 of those weeks on different respirators)and the bills that followed. And how stupid was it for my husband to work for a 30 year old company and assume that he would be given notice if they had to downsize? Instead of getting a paycheck he got an email with a bankruptcy announcement. I guess when you behave as foolishly as he and I have we should expect our bank to lie to us when we call and say "we are having a little trouble this month and will probably not be making the payment until after the 15th." I mean, after all, what proof is 12 years of perfect payment history? I would like to thank all of you that have commented here telling us what idiots we are as consumers. Go big banks! You're the best!
If you're unclear, this is sarcasm. Thanks to Wells Fargo and their guarantee that we were pre-approved for the Fannie Mae Homesavers program but then switched to a different modification without our knowledge -a modification that is more than half of my husband's monthly salary & an increase of $600/month- we have no choice but to sell our home or inevitably face foreclosure. And by the way, it isn't because our mortgage was typically unaffordable. Our savings went to medical bills (because we aren't "freeloaders") and we had to replace the HVAC and the stove in the month of September. Oh, and we didn't call so that we could skip the payment. We merely wanted to do the right thing and let them know the payment would be made, albeit late. What a price we have had to pay for that one phone call.
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