A federal bankruptcy court judge in California recently ordered Bank of America to pay a stunning $46 in damages after a years-long foreclosure nightmare that literally pushed one couple to the brink of death.
The bulk of that $46 million will go toward public law schools and consumer attorney organizations to help fight back against similar abuses in the future.
In the ruling, Bankruptcy Judge Christopher M. Klein admonishes the top brass at the bank – not lower-tier workers. Further, the ruling is being interpreted as a sharp condemnation of the failure of government to police these types of interactions and protect homeowners – even though banks should have been vulnerable to legal action on a massive scale for the actions leading to the foreclosure crisis and those that followed thereafter.
According to Vice, the couple purchased their home in 2008. But soon thereafter, they began to suffer financial struggles when the husband’s business began to slow due to the recession. They were advised by the bank’s mortgaging services unit to intentionally skip three payments so that they would be able to obtain loan modification qualification. The couple really did not want to do this – they had near-perfect credit at this point. But because of their financial situation, they decided they had no choice.
However, rather than extending that loan modification promised, he bank proceeded to lose or deem inadequate dozens of applications for loan modification submitted by the couple. Meanwhile, the bank engaged in “dual-tracking,” meaning that as it was supposedly trying to hammer out a loan modification agreement, it was also pursuing a foreclosure.
Eventually, the couple had to file for bankruptcy in 2010. That triggered an automatic stay, meaning the bank couldn’t complete that foreclosure until after the case was over. But despite the law, the bank sold the house anyway. The bank then ordered the couple evicted. Inspectors hired by the bank parked out in front of the home, knocked on the doors at all hours, followed the family in their vehicles and constantly watched the property.
It took the bank six months to correct this violation. Meanwhile, the couple moved out and into rental home, fearful for their safety. When the bank did finally rescind the sale, the couple’s name was put back on the title, which meant once again they were on the hook for paying the mortgage and fees for maintenance. When the couple finally returned, all their home furnishings and appliances were gone. The shrubs and trees on their property died. The homeowners’ association charged them $20,000 for substandard landscaping. Bank of America, of course, refused to take any responsibility on it. In fact, the bank instead charged the couple an additional $35,000 in unpaid interest.
Before all this happened, the couple were world-renowned athletes (she an Olympic ice skater and he a national soccer champion), nearly died from the stress. The husband attempted suicide. The wife suffered a heart attack and was diagnosed with PTSD. She also began cutting herself.
The pair won their case against the bank four years ago, but that violation of the bankruptcy stay had to be decided in federal bankruptcy court. This was Judge Klein’s ruling on it – a 107-page opinion that detailed all the wrong homeowners suffered as a result of the bank’s “intentional” conduct and wrongful foreclosure.
As the judge made clear, this was not a few bad employees. This was not accidental. It was intentional misconduct perpetuated by the very top brass in this organization – and it wasn’t isolated either. For this, the judge sanctioned the bank with $45 million in punitive damages.
Representatives for the bank say they plan to appeal.
If you’re battling debt collection in Miami or the surrounding areas contact Jacobs|Keeley 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 at 5 p.m. on “Debt Warriors with Bruce Jacobs and Court Keeley,” discussing foreclosure topics that matter to YOU.
How a Cruel Foreclosure Drove a Couple to the Brink of Death, March 31, 2017, By David Dayen, Vice
More Blog Entries:
Citibank Ordered to Pay for Illegal Debt Sales and Collection, March 22, 2017, Miami Foreclosure Lawyer Blog