Bank Of America’s Foreclosure Problems Increase With Threat Of Lawsuit From Investors

October 19, 2010
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Bank of America, which is trying to unfreeze its suspension of foreclosures, is now being threatened by investors, including the New York Fed, with possible legal action in the way it packaged mortgages into bonds.

The investors, who hold $16.5 billion of BofA mortgage bonds, took a step toward a possible suit against the bank, according to Reuters news service.

“The investors said that some mortgages should never have been included in the bonds in the first place, and that the Bank of America unit, Countrywide Home Loan Servicing, should force the original lender to buy them back,” said the article. “The salvo is the latest effort from investors to push losses from mortgage securities back onto banks that made the original loans. Investors say the loans did not meet the standards that bondholders were promised when they bought the securities. Countrywide Home Loan Servicing, now part of Bank of America, works on behalf of mortgage bond holders to collect payments on mortgages and work out bad loans.”

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One Response to Bank Of America’s Foreclosure Problems Increase With Threat Of Lawsuit From Investors

  1. H. M. Madden on May 29, 2011 at 1:44 pm

    Bank of America are some serious crooked people. Now that some of the foreclosures are frozen they are going after other people to foreclose on. Our mortgage was thru Franklin Bank to begin with. We had a payment arrangement with the Vestal, NY tax office to make payment on 5/1/09. They paid the taxes for 08 & 09 before that then told us we had to pay a much higher monthly payment. We went into a modification with them 6/9/09. We sent back the paperwork and, conviently, they lost it so we had to resend it 3 months later. Bank of America bought our mortgage from them in October 2010 and wanted $1800 a month for the mortgage. We applied for a modification with them and then in February 2011 they told us we were ineligible for that. We sent it in again in March 2011 Now, we just got a letter stating we didn’t qualify for any modifications but we could do a ‘short sale’. The letter date was 5/12/11 and it said we had to respond by 5/26/11, however, we didn’t even get it till 5/28/11 so how do they expect anyone to respond. We find it hard to believe it took 2 weeks for the letter to be typed up and processed thru Bank of America’s mail room. Now we don’t know what to do. They won’t work with us to lower the payments or at least keep them what they were or anything else. They have decided they want this house and that is all that matters. We don’t know what to do or who to talk to. There are so many houses for sale in this area I don’t know what they think they are going to get for this, but just around here there are 6 houses for sale that haven’t sold in a long time. We have 4 children and 1 income. My husband is an owner/operator of his own truck but the thing has cost us over
    $25,000 in repairs so far this year. With the truck being broken more than 1/2 the time and all the money going to repairs we can barely stay afloat and Bank of America refuses to work with us they just refuse everything we try and tell us they are going to foreclose. What a sad state this country is in when banks like this one will refuse to work with families who are trying to pay for their house and would rather take the house and let it sit empty than work with people to help them keep their homes. This is how greedy our society and banks like Bank of America has become.

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