Matthew Lickona 4 p.m., May 26
Local Couple Sues Bank of America Over Improper Penalties
San Diegans Rick and Susan Dolfo have launched a class action suit against Bank of America, claiming breach of contract, unfair competition, violation of the Rosenthal Fair Debt Collection Practices Act, and violation of the Consumer Credit Reporting Agencies Act.
“This is yet another tale of Bank of America cheating its customers,” says the complaint filed by the Dolfos’ counsel, Timothy Blood.
The Dolfos did not have an impound account, where the lender collects property taxes and hazard insurance payments in monthly increments, then pays the bills on the customer’s behalf. Though the borrowers claim they were not delinquent on either taxes or insurance, Bank of America set up an impound account on their behalf and began deducting sums from their monthly payment without notifying the Dolfos.
Because the remaining money they sent each month was no longer enough to cover the mortgage payment, B of A declared the borrowers to be in default and began assessing late charges and penalties to their account. Their insurance company and the county assessor began receiving double payments, both from the Dolfos and the bank. The Dolfos further allege that B of A began falsely reporting their account as delinquent to credit bureaus, damaging their credit score.
“Prior to filing this suit, plaintiffs spent months trying to work with Bank of America to solve the problems created by Bank of America: to close the impound account, stop the double payment of homeowner's insurance and property taxes, stop the improper deduction from the monthly mortgage payments, reverse the improper default and have Bank of America correct the improper credit reporting. But, just like millions of other Americans who have tried to work with Bank of America, plaintiffs made no progress, and were constantly put off by Bank of America, mislead and ignored,” the complaint continues.
The suit claims that B of A and its loan servicing arm, BAC Home Loans Servicing (also named as a defendant) have done this to other borrowers as well, sometimes even beginning non-judicial foreclosures on borrowers who have never missed or made a short payment. Such a practice, which does not require court approval of a foreclosure and thus expedites the process, is common in states such as California that use trust deeds instead of mortgages as security instruments for home loans. The Dolfos are seeking class damages as well as punitive damages for the violations listed in the opening paragraph.
More like this:
- Misreporting of Income Could Cost Customers, Benefit B of A Billions — July 16, 2012
- S.D. Realtor Says Bank Failed to Follow Federal Assistance Program Guidelines — March 19, 2012
- FICO to Help Banks Target Strategic Defaulters — Oct. 13, 2011
- Risky Mortgages Hurt Borrowers, Investors — Dec. 28, 2006
- Red October — Sept. 22, 2005