Hagens Berman Sobol Shapiro LLP, a national consumer-protection law firm, has filed a class action lawsuit alleging that Bank of America (NYSE:BAC) created and headed an illegal enterprise designed to defraud homeowners seeking loan modifications as part of the government’s Home Affordable Modification Program, or “HAMP.”
The complaint, filed in U.S. District Court in Colorado on July 10, alleges that Bank of America masterminded a scheme which allowed it to deny help it had promised to give thousands of its customers in exchange for $45 billion it took in bailout funds.
“We believe that Bank of America gamed the system, perpetrating a fraud on both its customers and American taxpayers,” said Steve Berman, managing partner of Hagens Berman and one of the attorneys who filed the lawsuit. “BofA promised that it would work with homeowners to modify their mortgages under the HAMP program. Instead it took $45 billion in taxpayer money and fought as hard as it could to avoid granting modifications, squeezing every last dollar from its customers and wrongfully foreclosing thousands of people’s homes in the process.”
For the past three years, Hagens Berman has been pursuing claims on behalf of homeowners who were not given loan modifications that the firm believes Bank of America contractually promised them. As the firm litigated these issues, it uncovered evidence resulting in yesterday’s new lawsuit. According to the complaint, Bank of America’s failure to grant loan modifications was not merely the result of honest mistakes or even widespread incompetence, but a deliberate and coordinated plan orchestrated by the bank.
The lawsuit alleges that Bank of America employed contractors, including co-defendant Urban Lending Solutions (“Urban”), who repeatedly lied to Bank of America’s customers. For instance, the suit claims that Urban employees answered the phone, “Bank of America – Office of the President,” when they did not work directly for Bank of America.