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Florida Mortgage Settlement Compliance Questioned by AG Bondi

Florida Attorney General Pam Bondi put Bank of America on notice recently in a five-page letter addressed to the company’s legal team.

Bondi is very, very late to the party, but better late protecting the Florida consumer than never.

Our Miami foreclosure lawyers understand the letter was drafted in anticipation of a Monitoring Committee meeting with BofA representatives over issues of alleged non-compliance with the terms of the national, multi-billion dollar mortgage settlement announced last year. Bondi said she was advancing a laundry list of issues to the company’s lawyers so that they could consider not only how they would explain the alleged lapses, but also how they would act to address them in a timely fashion.

The letter specifically outlines problems in two key areas:

  • The bank’s practice of sending litigation letters to state officials;
  • Failure to modify mortgages in an efficient manner.

Bondi said the possibility of a lawsuit against the firm had not been taken off the table.

The threat came just one month after New York’s Attorney General Eric Schneiderman, threatened both BofA and Wells Fargo over noncompliance issues linked to that same $25 billion settlement, which was agreed upon by five of the nation’s largest banks and 49 attorneys general in the midst of the housing crisis fallout and subsequent robo-signing scandal.

Bondi said she wasn’t going to jump to any conclusions about a lawsuit, but she warned the bank it is on shaky legal ground in terms of overstepping the guidelines as issued by the settlement. Among those guidelines were promises on the part of the banks not to dual-track mortgages by simultaneously working on loan modifications and foreclosures, as well as requirements to provide a single point of contact for struggling homeowners.

However, many homeowners have contacted the state attorney general’s office in the wake of that settlement to complain that the banks aren’t holding up their end of the bargain. While the homeowner is doing everything possible he or she can to avoid foreclosure, the bank is sending out misinformation, losing documents and dual-tracking cases, say the accusers.

With regard to the litigation letters, Bondi outlines how the bank has systematically attempted to block her staff from intervening on behalf of homeowners in foreclosure when the cases are in foreclosure, instead referring the state to its attorneys. However, Bondi said this is in clear violation of both the spirit and terms of the settlement.

Further, Bondi’s office wrote that applications for loan modifications are being delayed in some cases by a year or more. In many cases, borrowers are repeatedly asked to supply the same documentation over and over again. While the bank drags its feet, the borrower may be falling further and further behind and racking up even more fees.

As of May 1, Bondi’s office has received some 300 complaints alleging settlement violations. Of those, nearly 115 are Bank of America loans. The vast majority involve customer service issues.

Among the examples of this was that of an 88-year-old Miami woman who applied for a loan modification last December. However, she received no response for her application and the loan instead went into foreclosure. The woman’s representative contacted the attorney general’s office, which attempted to get a response from the bank about why it had failed to respond to her loan modification application. The bank responded to Bondi’s office by saying it was in the midst of foreclosure litigation with the borrower, and couldn’t respond to any outside inquiries. The attorney general’s office pressed further and continued to be stonewalled. The lack of response was ultimately reported to the settlement liaison. It wasn’t until then that the bank responded and offered the requested loan modification.

Situations like this abound. If you are looking for a legal representative in your loan modification or foreclosure case, call us today to learn more about how we can help.

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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