Lawsuit accuses Bank of America of violating trade practices act
Attorney Matthew Callister says he has a deal for Nevada homeowners struggling to avoid foreclosure on mortgages serviced by Bank of America: join a pending federal lawsuit, and Bank of America might freeze your home foreclosure until the lawsuit is resolved.
There are no guarantees, however, according to a letter the bank's attorney, Jacob Bundick, sent to Callister on May 10.
In the letter, Bank of America agreed to stay or delay foreclosure sales of some plaintiffs' homes. The bank and other defendants also "will review additional plaintiffs who are properly added to the (lawsuit) for the purpose of determining whether to stay foreclosure sales on a case-by-case basis."
In other words, Bank of America stopped short of a blanket promise to stop foreclosures on the houses of 50 clients represented by Callister. The bank will consider the same approach for any more plaintiffs added to the lawsuit.
Callister filed the lawsuit in Clark County District Court in April, accusing the bank of violating the Nevada Deceptive Trade Practices Act in dealing with homeowners who sought mortgage modifications.
Transferred to federal court, the lawsuit names Bank of America Corp., the similarly named national bank, BAC Home Loans Servicing, ReconTrust Co., and the Federal Home Loan Mortgage Corp. as defendants.
The litigation focuses on homeowner requests for modification of interest rates, mortgage terms, monthly payments and other measures aimed at forestalling foreclosure.
The civil complaint alleges the defendants falsely promised consumers that temporary modifications would be made permanent if the borrower successfully completed a trial period. The defendants falsely assured consumers their homes wouldn't be foreclosed while modifications were pending, but then sent foreclosure notices and sold homes while they waited for loan modification decisions, the lawsuit said.
"Because of Bank of America's false promises, many Nevada consumers continued to make mortgage payments they could not afford, running through their savings, their retirement funds and their children's education funds," the lawsuit states.
Bank spokeswoman Jumana Bauwens in an email said the bank "is committed to helping our customers avoid foreclosures through extensive home retention programs as well as foreclosure avoidance initiatives."
She said Callister also filed two other lawsuits, seeking class action status for Nevada borrowers. The other lawsuits were dismissed with prejudice, Bauwens said.
The lawsuit has been consolidated with a large multistate lawsuit pending in Boston federal court, which Callister said he favored. Bauwens said Bank of America asked for the consolidation and also filed a motion to dismiss the consolidated lawsuit.
Contact reporter John G. Edwards at jedwards@reviewjournal.com or 702-383-0420.
