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Bank of America and Wells Fargo Mortgage Violations Draw State AG’s Ire

Last year, officials with Bank of America and Wells Fargo were among several others that shook hands with attorneys general from 49 states, agreeing to pay a total of $26 billion and enact certain measures in response to egregious violations of consumer rights amid the national foreclosure crisis.

Now, as our Miami foreclosure defense lawyers understand it, the New York Attorney General’s Office has announced its intention to file a lawsuit against the financial giants, saying neither has fully upheld its end of the bargain.

Both banks are accused of attempting to thwart the home loan modification process for a long list of borrowers, instead pushing the cases into foreclosure by way of missing key deadlines or “losing” important paperwork or saying certain documentation was never received.

In just one example offered up by the AG’s office, a family has battled for 20 months with Bank of America to hammer out a loan modification after the family fell behind on mortgage payments when they were overwhelmed with funeral expenses for the family matriarch. The bank had filed a foreclosure action while the family was seeking a loan modification. Over the course of more than a year-and-a-half, there have reportedly been countless delays. The bank has repeatedly requested paperwork that’s already been submitted. The bank has been unresponsive to requests from the borrower. The more time goes by, the more that outstanding balance swells and the less likely it is that the family will be able to save their home through the process of loan modification.

As it stood, the $26 billion deal was widely criticized as weak. But the banks have proven themselves unwilling to honor even these minor concessions.

The New York AG’s office had wanted to take action immediately. However, the terms of the settlement required that his office wait and allow the national monitor of the settlement an opportunity to address those complaints. So far, no action has been taken.

New York Attorney General Eric Schneiderman has said there are at least 210 documented instances of violation of the settlement by Wells Fargo and another nearly 130 instances noted against Bank of America.

If Schneiderman’s office forges ahead with this litigation, it will be the first legal enforcement claim to be filed under the settlement. Many other states are watching closely because these issues haven’t been isolated to New York. It’s likely this action will serve as a template for other state attorneys general.

Schneiderman was quoted as saying that time and again, banks are given a long leash and time and again, they violate that trust by breaking the rules and putting homeowners at grave risk of foreclosure. Many are pushed over the edge.

The suit would follow whistle-blower allegations made last month by a host of Bank of America employees, who alleged that the bank systematically made efforts to deny and delay home loan modification applications, rewarding employees who instead steered cases toward foreclosures and away from the Home Affordable Modification Program.

The bank has vehemently denied these allegations, but the evidence appears to match the testimonies of the former workers, which were given under oath.

If you’re battling foreclosure 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 from 5 p.m. to 6 p.m. on “Mortgage Wars,” discussing foreclosure topics that matter to YOU.

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